Banking & Financial Services
Overview
Once the jewel in the crown of the UK’s economy with nearly 30 % of the economy’s output being derived from the banking and finance sector, this has probably been the hardest hit sector of all.
Until recent years, globalisation had ensured the profitability and dominance of the banking and finance industries: banking alone contributing over 50 billion pounds to the UK economy annually and accounting for ten percent of gross domestic product!
In 2007, however, the headlines focused not on rampant expansion and profits, but on the subprime crisis, reckless lending, trading scandals, write downs and divestitures. Many of the UK and global banks have made large staff cuts and been forced to sell off parts of their business for meagre amounts compared to previous market valuations.
However, in spite of all this change, many foreign companies still prefer to list on London’s capital markets. Even though they are currently suppressed, the Chinese, Indian and South American markets will make significant investments to London once they begin to recover, generating new services, profits and career opportunities.
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Geographical Centres
The City of London is where it’s at for banking and finance and is universally known as one of the world’s primary financial centres, if not the financial centre.
Employment Trends
This sector employs over one million people, with almost a third of them working in Greater London.
Over the past few years, the lines between traditional banking functions and other professional services are becoming blurred. Accounting firms and lawyers, for example, are increasingly moving into roles traditionally frequented by investment bankers advising on everything from mergers and acquisitions (M&A) to initial public offerings (IPOs).
Institutions such as hedge funds and private equity firms are now established as asset managers and investment tools, albeit for wealthy individuals and funds.
Many of the traditional back office banking functions, such as HR and IT, are being outsourced to India and the Far East. It is yet to be seen to how this outsourcing will pan out when overseas salaries begin to noticeably increase in the future.
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