Chris Cummings: It's essential that UK plc restores trust in our financial services
Benefits brought by the industry are frequently eclipsed by the mistakes it has made
Wednesday 24 October 2012
There is no doubt that financial and professional services make significant contributions to the UK economy and do much to facilitate our everyday lives. The industry employs two million people, two-thirds of whom are based outside London, and accounts for 13 per cent of UK GDP, contributing £63bn in tax revenue – enough to pay for every nurse in the country, and then make a significant contribution to the education budget.
Yet the benefits brought by the industry are frequently eclipsed by the mistakes that it has made. There has been a loss of faith among the public, businesses, the media and policymakers, not just in banks but in the whole industry. Cultural change is needed to put customers' needs back at the centre of what the industry does; to put the "service" element back into financial and professional services. This is essential to restoring trust at home, and it is also essential if the UK is to maintain its competitive position internationally.
The sector recognises the need for change, and it is making significant efforts to drive that change. While regulators have played a central role in designing frameworks intended to protect customers, there is increasing acknowledgement throughout the industry that a commitment to ethical behaviour is essential, over and above compliance to regulation; the message is spreading among employees that "doing the right thing" is as important as obeying the rules.
And I hope that as we restore trust in our industry, we can work with regulators to create the right conditions for it to thrive. Regulation should help in protecting customers, but we must ensure that it doesn't also stifle the economic recovery our nation needs, because our industry is highly successful in supporting sustainable, economic growth which creates jobs.
Financial and professional services don't just support the UK economy domestically, but are the country's leading export earner. The products and services we offer are in great demand around the world, and last year the nation's coffers received £47bn in export earnings from the sector's work.
The sector is a unique selling point for "UK plc", attracting international business and investment that locates not only in London but throughout the country. It represents a gold standard to our competitors and partners.
While the City is an international financial centre, it is also the UK's financial centre, supporting and serving British businesses and many millions of people. In Leeds, Manchester, Liverpool, Glasgow, Belfast and Cardiff, I have heard how local businesses are dependent on the sector's success, with new jobs being created across the UK, from Leith to Leeds and Llandudno to London.
JP Morgan is the biggest private-sector employer in Dorset, Deutsche Bank employs thousands in Birmingham, Citi is a major employer in Belfast, and the list goes on. The UK thus has many reasons to be proud of a financial and professional services sector that is a world-class asset, drawing in the best firms from around the globe to base themselves here.
While much hard work is being done, often behind the scenes, it is vital that the industry's efforts help to rebuild trust with the public and with policymakers. The UK cannot afford to take for granted its position as a global financial centre. With significant structural changes afoot in the eurozone, and with the economic rise of the East, the industry must make its voice heard, and regain permission to be successful. We must allow the UK to be proud of its financial and professional services industry to ensure that it can flourish in the years to come.
Chris Cummings, chief executive, TheCityUK
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