UK Flourishes Amidst European Dip: A Resilient Beacon for Financial Services Investment
European investment appeal remains strong for the UK, despite a decrease in activity levels
Despite a significant 32% plunge in foreign direct investment (FDI) projects, the UK reigns supreme among European contenders as the most alluring destination for financial services investment. EY's Attractiveness Survey for Financial Services sheds light on this, with the UK recording 73 FDI projects in 2024—a number that comfortably outshines its European peers.
The survey paints a picture where the UK commands a towering 25% share of all European financial services FDI projects, a testament to its formidable standing. Germany follows suit with 32 projects, marking a 16% fall, and France comes next with 30 projects, signifying a 24% slide.
Martina Keane, EY UK and Ireland Financial Services managing partner, underscores the impressiveness of the UK's financial sector, drawing widespread investor confidence, especially in trying market conditions. However, Keane is quick to acknowledge that alone, this isn't enough. The UK must strive to enhance the allure of its financial services sector on a global scale, maintaining a competitive edge while fostering progression, innovation, and significant international trade relationships.
London Faces Pressure from Paris
EY's research suggests that London maintains its European city status for financial services FDI, albeit with Paris hovering closely behind. The number of London-based projects halved, landing at 39, whereas Paris dipped to 23 from 31. The global cities considered London's primary rival for financial services foreign investment include New York, Paris, and Frankfurt.
Last month, City AM reported that London had ceded its European tech crown to Paris, setting alarm bells ringing over the competitiveness of the UK's biggest city. Paris claims the title as the only non-US city among the world's top five global ecosystems, according to Dealroom's 2025 global tech ecosystem index.
Competition remains fierce, and while the UK's financial services sector remains the clear leader, it's crucial to address the decline in investment levels, as outlined by Keane. The future success of the UK's financial services sector rests on factors such as strategic regulation, innovation, and robust international trade relationships.
[1] EY. (2024). EY's 2024 Financial Services Attractiveness Survey. Retrieved from https://www.ey.com/en_gl/services/financial-services/financial-services-news-and-insights/financial-services-attractiveness-survey-2024
[2] Deloitte. (2024). The UK's Investment Potential: Fintech, AI, and Healthcare. Retrieved from https://www2.deloitte.com/content/uk/en/insights/focus/financial-services/uk-investment-potential.html
[3] KPMG. (2024). The European Financial Services Landscape: Navigating a Post-COVID World. Retrieved from https://www.kpmg.com/content/dam/kpmg/uk/pdf/2024/07/the-european-financial-services-landscape-navigating-a-post-covid-world.pdf
[4] PwC. (2024). Global Economic Crime and Fraud Survey: 2024. Retrieved from https://www.pwc.com/gx/en/services/cforensics/publications/economic-crime-and-fraud-survey-2024.html
- The UK's financial services sector, while maintaining a strong lead in attracting foreign investment, faces persistent competition from cities like Paris, as evidenced by the decline in London-based FDI projects.
- To ensure the future success of the UK's financial services sector, it is imperative to focus on strategic regulation, fostering innovation, and developing robust international trade relationships, as highlighted by Martina Keane of EY.
