Promoting global trade in financial services is vital to the UK’s economic recovery from the coronavirus crisis, according to UK Finance.

The banking body has set out proposals to place the financial services industry at the heart of the UK's post-pandemic recovery, which includes a strategy to boost UK exports of financial services.

In a new report published today, titled International Trade in Financial Services, UK Finance has provided analysis of international trade in financial services, the tools that can be used to promote it and the benefits it brings for businesses and consumers.

The UK is the world’s top net exporter of financial services, above the United States and Switzerland, with a financial services trade surplus of £60.3bn in 2019. The banking and finance industry currently employs over one million people across the UK, with over two-thirds of these jobs located outside of London.

UK Finance’s report has identified areas for the government and regulators to promote international trade in banking, payments and other related services. The banking body suggested the changes would not only benefit the financial services sector but “boost the economy as a whole” – by generating jobs across the country, lowering costs for consumers and helping firms in other sectors expand into overseas markets.

UK Finance chief executive, David Postings, commented: “The banking and finance sector is a significant contributor to the UK economy. The industry’s trade surplus is vital, and we are keen to work with the government and regulators to increase these benefits for the UK.

“We are setting out the tools available to policymakers to achieve this, from using regulatory agreements and free trade deals to open up new markets overseas to playing a leading role at global standard-setting bodies like the WTO and Basel Committee.

“This would deliver significant benefits for the wider economy as we recover from the impact of the COVID-19 pandemic, increasing exports in other sectors, generating jobs and driving down costs for consumers.”

The report is also calling for a comprehensive strategy on “regulatory diplomacy”, in which UK financial regulators such as the Bank of England and FCA work with their counterparts in other countries towards improved market access.

UK Finance believes this would encourage other countries to open their domestic markets to UK-based financial services providers and promote cooperation in innovative areas such as AI, cybersecurity and fintech.

“The UK should seize the opportunity to be a global champion for free trade in financial services, building on our strengths as the world’s most open and international financial centre,” Postings added.

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