European financial centres lose global standing amid ‘relentless pivot to Asia’
European financial centres suffered a decline in global rankings as the continent continued to lose ground to fast-growing Asian cities.
Centres across Europe saw their prominence erode, with several key cities tumbling in the latest rankings from Z/Yen’s 40th Global Financial Centres Index (GFCI 40).
European cities fell out of top 20, after only four centres made the list compared to seven the prior year. Paris, Amsterdam and Frankfurt were shoved out by Asian contenders.
London comfortably held on to its European crown, ranking second globally to New York and standing far ahead of European competitors Zurich and Geneva by nearly 30 points.
Europe’s faltering grip comes amid a rising tide of optimism for Asian financial and professional services centres as the region continues to become a key global financial hub.
Pulling in global capital
Six Asia Pacific centres featured in the world’s top ten, including South Korea’s capital Seoul. The country’s main stock exchange, the Kospi, has hit continuous record highs over the last twelve months, reaping the benefits of the AI boom.
China also helped Asia dominate the rankings as Hong Kong, Shenzhen, Shanghai and Beijing all featured in the top ten global cities analysed for human capital, expertise, capital markets, innovation and regulatory regimes.
The region also achieved the largest increase in average ratings, up 1.4 per cent, while countries which are beginning to grow their financial capabilities also caught the eye of respondents.
Dubai received over 150 mentions when respondents were asked about future significance of their domestic hubs, while Singapore secured 137. In comparison, London received just 29.
Professor Michael Mainelli, chairman of Z/Yen, credited Asia’s growth to its major cities becoming anchors for prominent asset and wealth managers, while emerging markets continue to pull global capital away from traditional players.
Mainelli said: “Over twenty years, the GFCI has watched… the relentless, and essential, financial pivot to Asia.
“The continued strength of Asian finance, and the strength of their technology and AI base is a challenge to traditional centres.”
London’s blues
Elsewhere, London failed to close the gap with the Big Apple, dropping four points out of reach, and leaving New York to once again top the rankings.
The UK capital had been within touching distance of surpassing New York last year, where just one point separated them.
While both cities retained their top spots, they dropped considerable points. New York lost six points and London lost nine.
London also suffered a further blow in the fintech rankings, falling from fifth to sixth place as Shanghai claimed its spot.
Hong Kong retained the top spot when it comes to fintech, while New York pushed Shenzhen into third, as the Square Mile struggles to catch up to the Big Apple’s rising fintech star and Asia’s tech darlings.
London’s relative decline comes as the UK’s public markets face intense scrutiny following a wave of delistings. Money transfer firm Wise ditched a London listing last year, while Klarna opted for Wall Street and other prominent firms ditched the UK market after private equity or M&A swoops.
The capital’s long-suffering stock exchange could potentially see a fintech IPO before the year is out as digital commerce service Airtel gears up to list, according to its parent company, Airtel Africa.
While London also ranked within the top five for competitiveness, UK respondents raised concerns it will become increasingly less competitive in the near future, compared to New York, Hong Kong and Singapore.