Could a slice of the City be on its way to Belfast? Government urged to help turn capital into global player in financial services
Published 07/03/2014 | 04:52
The financial services sector in Northern Ireland could generate almost half a billion pounds of additional revenue for the economy with the help of focused direction from Government.
That's the message from a new report by business advisers Pricewaterhouse Cooper (PwC), which predicts around £400m of additional gross domestic product growth in Northern Ireland by 2020, equivalent to increasing the region's GDP by around 1.06%.
The figures include investments in areas such as IT, new buildings and research and development on new financial products in a sector which which already boasts homegrown talent like First Derivatives and global giants like the New York Stock Exchange.
GDP gains could also include an additional £23bn of exports by UK financial services institutions providing services to international clients such as insurance and investment banking.
All UK regions would potentially benefit from a growing financial services sector, the report says and, outside London, in percentage terms, the Scottish financial services sector would contribute the most to UK growth, followed by the North West and West Midlands.
Northern Ireland comes towards the bottom of the table.
Ian McConnell, PwC forensics partner in Belfast, said: "We are seeing many financial services institutions looking at ways to improve their UK regional footprint, so Government support in the form of incentives for financial services businesses seeking to locate activity outside of London would be welcomed.
"By encouraging more regional investment, the financial services industry will be able to access a wider pool of resources and at a lower cost than would be possible in London and the recent steady growth of financial and business services in Northern Ireland is just one example."
Last week, a senior Belfast-born banker has said she sees no reason why major financial institutions should not base themselves in Northern Ireland.
Suzanne Aquino from Swiss banking giant UBS was one of more than 20 USA-based business leaders and politicians taking part in the Opportunity Belfast Business Mission, endorsed by American Ireland Fund and organised by Belfast City Council.
Ms Aquino said that with banks under huge cost pressures, many are looking further afield to base their offices.
"I take people to India, China and Russia to look at locations, and I see no reason why I should not bring them to Belfast," she said.
"Belfast has a lot to offer, with firms like the New York Stock Exchange, Citi and the Chicago Mercantile Exchange already based here.
"We need to find what our niche is here, what we can do to be competitive and differential from other locations.
"Our education system and language base is an excellent start."
Firms involved in lending, investing, insuring and trading make up the bulk of the financial services sector. Over the last few years, Northern Ireland has developed its own specialism in this area with Citigroup setting up a base in Belfast, alongside NYSE Technologies. It's not just inward investors who dominate the scene, with indigenous companies such as Newry-head quartered First Derivatives surging ahead.