Urgent action must be taken to preserve the UK's position as a global financial centre, a City lobby group says today. In a warning against complacency, TheCityUK - a group set up to promote the financial and related professional services sector - says its members are vulnerable to geopolitical volatility and rising protectionism. Its report No time to lose* notes that the gap between the UK and other global financial centres has already narrowed sharply, with City output and productivity falling in real terms since 2014. 

At the same time, innovations such as artificial intelligence and distributed ledger technology are eroding long-standing advantages, it claims. 'Capital and talent can now move faster than ever, increasing the risk that activity migrates to financial centres acting with greater clarity, ambition and speed.'

The report identifies 'critical imperatives for industry, government and regulators to collectively deliver'. As well from streamlining regulation, these include embracing new technology - 'the defining battleground for global competitivenes'. The lobby group says the UK must 'lead the world in tokenised assets' and cryptocurrencies, adopt digital identities as 'the centre of a more accessible, faster and safer financial system' and 'fully digitise the UK’s highest friction processes, for example home purchasing and SME lending'.

Seizing these opportunities and others could generate up to £53bn in additional economic output by 2035, according to economic modelling by Big Four firm PwC - equivalent to an uplift of 1.6% in national wealth. 'This secures jobs across the country, strengthens household wealth creation, enhances access to capital for small businesses and supports growth in the sectors that depend on a competitive financial and related professional services system,' the report states. 

*No time to lose: reasserting UK leadership in financial and related professional services