2 A Truly Global Industry
A snapshot of the key strengths of the world’s financial centres
The financial services sector offers a wealth of opportunities across the globe, and each financial centre has its strengths and specialisms.
Europe, Middle East & Africa
London may have been rocked by a combination of job cuts and scandals hitting the banking sector, but it remains the world’s top financial centre.
It has the largest slice of some of the biggest markets in the world – 37% of the $4 trillion traded daily on the foreign exchange markets go through London, while 46% of turnover in the $1.2 trillion OTC derivatives market is traded in the City. Investment banks have suffered in their bread-and-butter M&A market though – deal volumes are less than half of pre-crisis levels, at $145.7bn in 2012.
On the Continent, France is the largest fund management centre, with $3.7 trillion in assets under management (AUM) and 83,000 people employed by the sector. Germany rules the roost in debt capital markets (DCM), with $461.5bn worth of deals completed in 2012.
$4 trillion
London’s hold on the top spot for financial services has much to do with its 37% share of the $4 trillion traded every day on the foreign exchange markets.
It also has a sizeable fund management industry, with $2.6 trillion in AUM, and employs over 300,000 people in insurance.
Switzerland remains a magnet for wealth management, with over $5.4 trillion in AUM, 51% from foreign investors. The country is also number one in Europe for trading various physical commodities, and is a centre for fund management and reinsurance. Both Ireland and Luxembourg are renowned for global custody, administering assets of $2.9 trillion and $3.3 trillion respectively.
The Middle East is home to huge sovereign wealth funds, which together have over $1.9 trillion in investable assets
and are large employers of international financial services talent. They have helped attract international financial services firms to the region, but the $4.8 trillion in investable personal wealth has also meant international private banks are vying for business in the Middle East.
United States & Canada
With several economies in disrepair in Europe and Asia, North America may be your best bet when it comes to finding work in financial services, particularly for higher paying roles. US investment banking revenues are expected to rise by as much as 15% year-over-year in 2013, while European and Asian banks are getting cut at the knees. It’s the same story in private equity. Twice as much money was spent on buyouts in the US in the first half of 2013 compared with a year ago.
While New York City remains the capital of the financial services world in North America, the shrinking of Wall Street has changed the hiring landscape in the Big Apple to some degree. New York hosts the greatest number of financial services jobs, but employment in the sector has fallen by 7.4% since 2007. Still, if you want to work for one of the big boys, New York City is where you should be looking.
When it comes to trading, particularly in the derivatives and futures markets, Chicago calls itself king. The Chicago Mercantile Exchange (CME) and the Chicago Board of Trade are two of the biggest alternative trading floors in the world.
Boston, meanwhile, is best known for its fund management business, with several firms controlling much of the wealth in the Massachusetts area. Then there’s San Francisco. Known for its unparallelled venture capital industry, the City by the Bay is the most viable financial capital west of the Mississippi. Successful brokerage firms are also scattered across San Fran.
The majority of financial services jobs in Canada are in Toronto, but you can find work throughout the country’s biggest cities. Business units like risk, lending and various back-office positions are particularly healthy up north.
Asia-Pacific
Asia has been synonymous with growth in recent years, but it has some long- established financial hubs in the top ten – Singapore, Hong Kong, Tokyo and Seoul.
While expansion may have stalled in the past two years, one thing remains on an upward trajectory – wealth. There are now 3.37 million people with over $1m to invest in the region, and $10 trillion in assets. Not surprisingly, both Singapore and Hong Kong are magnets for private banks, and talent remains at a premium.
Singapore has also traditionally been a low-cost destination for banks’ operations and IT functions but more recently cheaper options in mainland China, the Philippines, India and Eastern Europe have been explored.
Hong Kong has high equity capital markets deal volumes, with over $24.5bn completed last year, and it’s also close to mainland China’s larger equity markets, which completed nearly $80bn in deals last year.
Nonetheless, while investment banking job cuts have historically been light in Asia, headcount reductions among revenue generators reached 18% of the global total last year – a significant rise.
Tokyo is the region’s largest FX market, with a daily turnover of $2.8 trillion in 2012. It also houses Asia’s largest fund management industry, with $3.4 trillion in AUM.
Australia remains domestically focused, with the Big Four banks – National Australia Bank, Commonwealth Bank, Westpac and ANZ – still dominating the market. Its compulsory employment superannuation (retirement) programme has ensured a formidable asset management industry, with $1.5 trillion in AUM.
top ten financial centres 1. London
2. New York 3. Hong Kong 4. Singapore 5. Zurich
6. Tokyo 7. Geneva 8. Boston 9. Seoul
10. Frankfurt
Source: Z/Yen Global Financial Centres Index 13 (March 2013)
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