Finance is the fuel that powers the engine of global trade – and it's one of our top exports

Stephen Jones
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The UK financial services industry facilitates billions of pounds of international trade (Source: Getty)

This week marks the start of the second round of Brexit negotiations.

But regardless of the final shape of the deal, our local, national and global economies will remain intimately and irrevocably connected by ever more complex flows of goods, capital, labour and finance.

And this is nothing new.

Read more: The new voice of British banking: UK Finance board revealed on launch today

In fact, there’s evidence that the Mesopotamians practised a form of credit that laid the foundations for what is known today as invoice finance, and that the industry’s roots can certainly be traced back to supporting the international cloth trade in the Middle Ages.

Today, finished products, raw materials, services and components come to our shops and businesses from all around the world, and in turn, we export goods and services globally to the tune of around £50bn a month. Banks, financiers, and payment services providers supply the pipes and the products that facilitate this flow.

From working capital to making international payments, we support every stage of a transaction, and banks guarantee payment for around a fifth of world trade deals.

Of course, while finance supports UK businesses that export, it is one of the UK’s most successful exports in its own right. Financial services (FS) and insurance make up the largest proportion of the UK’s services trade, and the UK FS industry facilitates billions of pounds of international trade that never comes anywhere near our shores.

The creation of UK Finance offers a unique opportunity to champion the industry and support UK businesses to deliver the export-driven economy we need.

Bringing together six trade associations operating across 300 companies in finance, lending, banking, markets, fraud prevention and payments, I am proud to say there is a now a single organisation that can coordinate and leverage this expertise to the benefit of UK plc.

As chief executive of UK Finance, a key priority will be to ensure collaborative working across industry and with government. In particular its UK Export Finance (Ukef, a close friend, but no relation) agency is working closely with UK Finance’s own Export and Trade Finance group on its services, products, and reach.

The industry has just signed an agreement with the secretary of state for international trade that will pave the way for banks to receive applications directly from potential UK exporters under the Ukef Working Capital and Bond Support schemes. They will be able to draw down cover from Ukef, based on the finance provider’s own credit and due diligence processes. This will make it far quicker for small and mid-sized businesses to gain the cover they need to take advantage of fast-moving opportunities around the world.

The banking sector has a proud tradition of supporting growth. But the industry’s support goes far beyond providing finance. Many of UK Finance’s members are at the cutting edge of developing specialist products to help exporters, while traditional bank support is increasingly being complemented by networks of specialists that share expertise with growing businesses.

Whether in a supporting role, or as an export in its own right, it’s clear that the future of finance will be ever more integrated with the future of global trade.

Read more: Dublin has been the biggest Brexit winner (so far) in financial services

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