New York once again has bragging rights as the world’s leading financial center, having reclaimed the title from London where Brexit continues to cast a shadow of uncertainty over the UK economy.
However, the Big Apple ought to be worried about competition from Hong Kong if it plans on keeping the title.
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According to the latest Global Regulatory Outlook (GRO) survey of senior financial executives by advisor Duff & Phelps, 52% of the respondents view New York as the world’s financial center, a 10% increase from 2018. According to the results, 36% currently see London as the foremost global financial hub, a 17% decrease from last year.
Looking ahead five years, respondents’ confidence in New York maintaining its place fell to 44% and only 21% of respondents said that London would be the world’s financial center. Instead, 12% of respondents said that Hong Kong would take the title by 2024, a significant increase from the 3% who held this opinion in 2018.
The survey also found that the most pressing issues facing the global financial community this year with respect to regulatory compliance continue to involve anti-money laundering (AML) and whistleblowing. Technology and budgeting have also emerged as factors affecting firms’ compliance functions.
“Whether located in traditional financial centers or not, the finance executives responsible for governance, risk management and compliance are grappling with significant threats arising from increasing obligations relating to the anti-money laundering programs, data protection and privacy, cybersecurity defenses, whistleblowers and ‘big data’ and technology,” said Ken Joseph, managing director and head of the Disputes Consulting practice at Duff & Phelps.
Other insights from the GRO survey indicate that:
- 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.
- Three of the top four technology concerns for firms involve data: developing a holistic data strategy, having accurate and up-to-date data, and then having adequate cybersecurity to protect that data.
- While a vast majority of respondents agreed that whistleblowing programs should be mandatory, a quarter of the firms have yet to establish a whistleblower program.
Source: GRO survey