Cardiff Outpacing London for Growth of Financial Services Sector

• Number of financial services businesses in Cardiff jumps 11.2% in 2015
• Wales is now fastest growing UK region for financial services start-ups

Cardiff is outpacing London for the growth of the financial services sector, according to research by Nixon Williams, a specialist accountant for finance and banking contractors.

According to an analysis by Nixon Williams, the number of financial services businesses in Wales increased by 11.2% in 2015, compared to 9.7% in London. Wales is the fastest growing region of the UK for financial start-ups, with London trailing in joint third place after Scotland (10.9%).

The number of financial services businesses (which includes banking, insurance, fund management and auxiliary activities) in Wales jumped from 2,400 to 2,695 between 2014 and 2015. In London the number of financial services business, rose from 10,955 to 12,685.

According to Nixon Williams, in recent years Cardiff has emerged as the fastest growing city in the UK in terms of job creation, with the financial and professional services sectors being key drivers of that growth. The surge in new business creation in the financial services sector in Cardiff is fuelling the jobs boom, drawing more talent into the city.

Simon Curry, CEO of Nixon Williams, comments: “The financial services sector took a battering during the recession, but structural changes in the industry have played to the advantages of the UK regions. Many larger institutions are taking advantage of the lower cost base of regional cities, and for start-ups those same cost advantages can make an important difference in the critical early years.”

“In recent years the North West has been the best performing region for financial services start-ups, but Wales has accelerated ahead over the past year, with Cardiff establishing itself as one of the key financial centres outside London. The city, including the wider South Wales region, is cementing its position as a destination for back and middle office functions that do not need to be located in London.”

He adds: “With improvements in rail networks, particularly Crossrail, which will boost access between Cardiff and Canary Wharf in London, the symbiotic relationship between regional cities like Cardiff and the London hub will be further strengthened.”

Growth in number of financial services businesses, 2014-15

​In November last year, the South Wales Financial Centre of Excellence initiative was launched by the Economic Secretary to the Treasury, Harriett Baldwin, at the offices of the Admiral Group in Cardiff. A number of government agencies will come together to promote South Wales to foreign financial services businesses.

Simon Curry states: “Cardiff has a highly skilled workforce and with rents for commercial space often less than half that of London, is a very attractive business location. As more financial services businesses cluster there, we are starting to see a snowball effect.”

North West the fastest growing region for financial services businesses since 2009

According to Nixon Williams, between 2009 (the first full year of the recession) and 2015, the North West saw the greatest increase in the number of financial services enterprises in the country (Wales outpaced the North West between 2014 and 2015). The North West saw a 24.8% increase in financial services businesses between 2009 and 2015, from 4,500 to 5,985.

Simon Curry points out that the last few years have seen expansions and relocations from KPMG, Aldermore Bank, Bibby Financial Services and the Royal Bank of Scotland in the New West.

Curry continues: “The North West, particularly Manchester and Liverpool, have a diverse skills base with strength in financial and professional services. While London still monopolises front office functions, the presence of the middle and back office functions of large institutions in the North West is stimulating a start-up culture. Financial technology businesses are clustering in the region, feeding off the financial giants and each other.”

“We are seeing strong demand for contractors with compliance and regulatory expertise in the financial services sector in the North West, underscoring the extent to which institutions are buildings these teams in cities like Manchester as opposed to London, which would have been more likely pre-crisis.”