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Tuesday, May 28, 2019 / 12.31 PM / By Mondo
Highlights
In
a year dominated by Brexit, trade wars and global
financial volatility, Duff & Phelps’ latest Global Regulatory
Outlook (GRO)report found that London is no longer
perceived as the world’s preeminent financial centre by financial
sector professionals. New York has taken back the title according to the
seventh annual GRO report released by Duff & Phelps, the global
adviser that protects, restores and maximizes value for clients, which
surveys senior professionals in financial institutions around the
world.
The
survey found that only 36% currently see London as the foremost
global financial hub, a 17% decrease from last year. New York is
now seen as the world’s financial centre by 52% of respondents, a 10% increase
from 2018.
Looking
ahead five years, respondents’ confidence in London returning to the top
spot does not improve either. Only 21% of respondents said that London would be
the world’s financial centre in 2024. Confidence in New York’s ability to
maintain its place falls slightly to 44%, with Hong Kong picked as the
number one city by 12%, signalling the beginning of the ‘Age of Asia’ combined
with reduced confidence in the outlook for the UK’s capital post-Brexit.
Monique
Melis, Managing Director, Compliance and
Regulatory Consulting at Duff & Phelps, said:
“Brexit
has cast a shadow of uncertainty over the UK’s world-class financial sector and
its ability to dominate other major financial hubs in the coming years. Looking
ahead, we see the combined effects of Brexit and the emergence of
Asia with respondents expecting Hong Kong to play a bigger role as a leading
global financial centre.”
The
survey also looked at how firms are coping with regulatory compliance
challenges. Some of the most pressing issues facing the global financial
community this year continue to involve anti-money
laundering (AML) and whistleblowing. These issues are
a telling indicator of the pressures shaping the global
financial landscape and are influencing activity in both
current and future global financial hubs.
Significant findings of the survey include:
Monique
Melis concludes:
“Regulatory
considerations continue to play a large role in strategic decision
making. Our survey found that there is a correlation between how firms
rate the components of their AML programs and how they rate their
whistleblowing programs. Effectiveness in one program correlates with
effectiveness in the other. However, while firms have become more
diligent and sophisticated in their compliance and risk management, there
is also a growing sense of regulatory fatigue that cannot be
overlooked. Excellence in compliance begins with a mindset that extends
over every aspect of the business. Without robust compliance the sector will be
vulnerable to risks that are only just emerging.”
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