The City's new strategy for UK international financial services
August 2010: Much thought before, during, and, now after, the crisis has been going on within the UK on how best to preserve what's best and brightest in the UK's star export sector, finance, involving reports from influential city names such as Bob Wigley, Sir Win Bischoff, and Sir Michael Snyder. One of the outcomes has been the creation of TheCityUK, a fresh industry initiative to promote financial services not just from the City, but from the whole of the UK and that aims to forge a new relationship with the UK Government. JOHN INGAMELLS its director who recently set out the strategy at the Financial Centres International Global Financial Services Conference held in April 2010 gives a further up-date on progress.

There is no getting away from the fact that TheCityUK is an organisation born out of the crisis that has engulfed the financial and professional services industry over the past three years. But its creation was a key recommendation from two high-level Government-industry inquiries looking into the crisis and its potential impact. Moreover, with strong support from across the industry, the omens are favourable for its success.

Background in the financial crisis
When the financial crisis began in 2008, industry and government alike in the UK were quick to see the potential risk to the country's standing as the leading centre for financial and related professional business services. A number of initiatives were started to examine the risks and make recommendations with a view to charting a way out of the crisis that would preserve the UK's competitive edge.
John Ingamells

From the start there was an emphasis on government and industry working together. In mid 2008 the Mayor of London, Boris Johnson commissioned Bob Wigley, then at Merrill Lynch to examine the issues for London. At the same time, the then Chancellor, Alistair Darling asked Sir Win Bischoff, then chairman of CitiGroup to look at the challenges for the financial services industry across the country. He also asked Sir Michael Snyder, a former Policy Chairman at the City of London to look at the issues for the professional services sector.

All three projects involved groups of senior practitioners from across the respective industries coming together with Government to analyse the impact of the crisis. It is worth bearing in mind that much of this initial effort was focussed on the issue of competitiveness.

Bob Wigley was the first to report in December 2008. His analysis concluded that if the industry was to play its part in maintaining and enhancing London's international position it needed to improve significantly the way it promoted itself both at home and overseas. He called for the City of London Corporation to take the lead in setting up a single, strategic promotional body for the financial services industry. Crucially he called for the industry to take on the task of promoting itself to a domestic audience to improve understanding of the role it played in society as a whole.

Sir Win Bischoff's Financial Services Global Competitiveness Group reported in May 2009. He endorsed the recommendation made by Bob Wigley for the creation of a new promotional body for the industry. He called for it to be an independent body that was strategic, practitioner-led, permanent, politically neutral and cross-sectoral.

Setting up TheCityUK: Structure and agenda
Work to set up TheCityUK began in earnest just over a year ago. The City of London Corporation formed a Steering Group that evolved into a fully-fledged Board of Directors towards the end of 2009. The Board has now met seven times. We are also establishing a larger Advisory Council which will give senior industry representatives a forum to guide the overall strategy of the organisation. This will be meeting for the first time in the autumn.

The organisation’s structure has been designed to address the three threats to competitiveness that were identified in the various reviews:
1. International competition: a resurgent New York to the West, fierce competition from European centres nearer to home and the rise of the large financial hubs in the East: Mumbai, Singapore and Shanghai.
2. The Regulatory agenda: the industry’s concern that the inevitable regulatory response to the crisis might unduly affect their ability to do business.
3.The Domestic Agenda: a growing concern that the industry needs to make a better collective effort to communicate with the general public about what it does and the contribution that it makes to society.

To tackle the international agenda we have taken over the Financial Services Sector Advisory Board (FSSAB). This was a high-level industry committee set up by the UK Trade & Investment (UKTI) the main Government Department promoting the UK around the world. Renamed TheCityUK’s Overseas Promotion Committee (OPC) and with a new chairman and refreshed membership, the group will continue to bring together industry expertise to shape a new strategy for promoting the UK’s unique offering around the world. It will continue to work closely with UKTI which gives us the link out to the country’s diplomatic network of embassies around the world. To some extent, this is a continuation of existing work. But the shift of responsibility from Whitehall to the Industry itself marks an important change of emphasis. It puts industry practitioners more firmly in the driving seat on the strategy for promoting the UK’s offering around the world.

To tackle the seemingly never-ending wave of regulatory change TheCityUK will be working with an industry group set up some years ago by the City of London Corporation. The EU Advisory Group has been advising the City for the last 4 years on the key developments in Europe. In recognition of the broadening agenda it has recently expanded its remit and changed its name to the International Regulatory Strategy Group (IRSG). Like the OPC it brings together senior industry representatives from a wide variety of sectors to ensure that the UK industry is speaking with a single coherent voice on the regulatory agenda.
The international aspects of regulation are particularly important for the UK industry. As an international financial centre, we play host to a broad range of firms and business lines that, strictly speaking, have little or nothing to do with our domestic economy. It is international business that is based in the UK where it supports thousands of people who live, work, pay tax and contribute to the economy. The UK thus has a real interest in ensuring that the regulatory structure that emerges in international forums like the EU or G20 is one that continues to facilitate international trade and capital movement in a fair and consistent fashion.

For the domestic side, we are forming a new committee to drive strategy on a pan-industry effort to engage with the British public. For our International and Regulatory agendas we were able to rely on existing committees. But the fact that there simply was nothing happening on the domestic side is an indication of how little priority had been given to this area of work in the past. Of course, many individual firms have extensive marketing and advertising programmes and various trade associations run educational or information campaigns. But there was nothing spanning the entire industry with a goal of making a case for the sector as a whole. What has become very clear to us in our initial work on this area is that there is real appetite for it from many parts of the industry.

TheCityUK opened its new office in London on 1st June. On that day we incorporated staff and services from International Financial Services London (IFSL) and welcomed a number of new recruits at the same time.

To lead the charge, we have recently announced the appointment of Chris Cummings as our new Chief Executive. Chris has been Director General of the Association of Independent Financial Advisers (AIFA) and will be taking up his post at TheCityUK in mid September.

The vision
From the outset we have taken the Bischoff prescription as something of a mantra in that we are focussed on creating an independent organisation that is strategic, practitioner-led, permanent, politically neutral and cross-sectoral.

Our independence will come from being largely funded by the industry itself. We will work closely with government and UKTI have an observer on the Board of Directors. But there will be no funding from central government. We have seed funding from the City of London Corporation which the industry largely recognised as a not party political honest broker. The creation of TheCityUK is about the industry stepping up to the plate and seizing the initiative.

This will also be clear from the fact that we are determined to be practitioner-led. It is vital that the industry’s own leaders are now seen actively driving the promotional agenda for the industry.

It is worth also highlighting our ambition to the cross-sectoral. One of the clear strengths of the UK’s offering in financial services is that it extends way beyond what most people would actually define as purely financial. It includes a broad range of professional and other services that go to make up what we believe to be a unique proposition – for example: legal, accountancy, actuarial and, of course, the important Maritime sector will all feature in our work. And it is also important to emphasise that we will not just be representing the City of London. The Bischoff Report outlined in some detail the extent to which the financial and related professional services industry extends throughout the country. Of the million or so people who work in the industry over half are situated outside London and the South East of England. There are important regional centres of excellence such as Edinburgh, known for its asset management industry, Liverpool with its important maritime sector, Leeds as a centre of legal services and many others.

Perhaps the key part of our mantra is our aim to be strategic. We hope above all to be able to articulate a vision for the industry looking five or more years ahead and then work with government and others to chart a course that enables the industry to continue to be an engine of growth and prosperity in society.

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