Dublin Emerges as Potential Global Financial Hub as Brexit Causes Regulatory Upheaval in London

London loses world’s financial center status to New York due to Brexit worries.

Global complexities – both political and technological – are affecting regulatory compliance in the sector.

DUBLIN – In a year dominated by Brexit, trade wars and global financial volatility, London is no longer perceived as the world’s preeminent financial center by senior financial services executives. According to the seventh annual Global Regulatory Outlook (GRO) report published by Duff & Phelps, the global adviser that protects, restores and maximizes value for clients, New York is now considered the world’s financial services capital as Brexit uncertainty remains.

The report, which surveyed 183 senior financial services executives from across the globe including Ireland, found that only 36% currently see London as the foremost global financial hub, a 17% decrease from last year. As the regulatory fall-out of Brexit on financial services firms across the UK and Europe remains unclear, 52% of financial services executives now view New York as the world’s financial services capital. 

Looking ahead, there is little confidence that London will regain the title as 44% of respondents believe that New York will still hold its position in five years’ time. For the first time, Dublin (4%) has emerged as a potential future global hub, ranking as the highest EU location outside of London alongside Frankfurt (4%) and Luxembourg (3%). 

Hong Kong (12%) and Shanghai (9%) have also rose in terms of considerations for either city to become the top global financial services hub, signaling a potential Age of Asia in terms of growth within the Asian financial services industry.

Commenting on the report, Killian Buckley, Managing Director and Head of Compliance and Regulatory Consulting services at Duff & Phelps Ireland 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. Since the UK referendum result, we have seen streams of financial services companies shift operations to Ireland, a trend that we expect to continue given Dublin’s potential as an alternative to London as a global financial service hub.”

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:

  • While most financial firms rated themselves as being effective at AML, 30% rate at least one of their AML components as being either ‘not at all effective’ or only ‘somewhat effective’;
  • Nearly a quarter of firms gave themselves low marks in their internal audit of AML risk, an essential element of AML risk management;
  • 86% of respondents agreed that whistleblowing programs should be mandatory, but only 75% of respondents noted having a program in place;
  • Firms with multinational operations are significantly more likely to have whistleblowing programs in place than firms with operations in only one country (84% vs. 54%).

Download the Duff & Phelps 2018 Global Regulatory Outlook report.

About Duff & Phelps
Duff & Phelps is the global advisor that protects, restores and maximizes value for clients in the areas of valuation, corporate finance, investigations, disputes, cyber security, compliance and regulatory matters, and other governance-related issues. We work with clients across diverse sectors, mitigating risk to assets, operations and people. With Kroll, a division of Duff & Phelps since 2018, our firm has nearly 3,500 professionals in 28 countries around the world. For more information, visit www.duffandphelps.ie.

Olivia Dempsey, Edelman Ireland
016789333, 0851525109
[email protected]

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