Can London stay a world leader in financial training?
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London’s future as a financial centre is uncertain after the UK’s departure from the EU. Goldman Sachs, Morgan Stanley and JPMorgan have all moved bankers across the English Channel to maintain regulatory compliance.
And that presents a problem for the universities and business schools in the UK that supply big banks with graduates skilled in strategy, data analytics, marketing and management. If banking jobs move to other parts of Europe, will London be able to hold on to its status as a financial training hub?
Recent events have created “extraordinary opportunities” for business schools in Paris, Berlin, Amsterdam and Dublin, according to Tim Mescon, executive vice-president and chief officer for Europe, Middle East and Africa at AACSB, the business school accreditation body.
“London schools have had an exceptional running start for decades,” he says. “The key to maintaining their prominence will be predicated on their legacy relationships with the global banking players, internships, research by professors, and commitment to recruiting the very best students.”
Student numbers have grown in schools in continental Europe this year, but demand has also been increasing for UK courses specialising in finance. Those with the strongest brands that can offer connections both to London and beyond are doing best — both inside and outside the UK.
Applications for the masters in finance degree at Imperial College Business School are up 14 per cent for the 2021/22 academic year compared with the last intake — which, itself, was substantially higher than usual, as many chose to return to or remain in education during the Covid-19 pandemic, according to Lara Cathcart, the course’s academic director.
“London remains an attractive place to study and start your career,” she says. adding that what may have been lost in terms of jobs affected by Brexit is more than made up for by new employment opportunities. These include roles in financial services start-ups and even non-financial corporations — notably tech groups such as Amazon and Deliveroo, which want recruits with good data and numeracy skills.
Imperial’s MSc Finance programme has always been very international with more than 90 per cent of the 85 places filled every year by non-UK passport holders. This year’s intake has a slightly higher proportion of students from India than in previous years, but Cathcart attributes that to recent changes in student visa rules — which allow graduates to remain in the UK to work two years after completing the programme — rather than anything to do with the UK leaving the EU.
“We have a one-fee policy, which means there is no change in the cost of the course for EU citizens,” she says. “Imperial is a global institution. It is outward looking and it is European at heart. That has not changed this year.”
France’s ESCP Business School has a campus in London as well as Paris, Berlin, Turin, Warsaw and Madrid, and students on its masters in finance programme spent a term studying in the UK capital. The UK’s departure from the EU has created problems with visas and has made securing internships more of a challenge, but it has not reduced the attraction of the location, says Philippe Thomas, academic director for the degree programme. “As a deeply European school, we regret seeing our British friends outside the EU,” he says. “But objectively, the concrete consequences are limited.”
Brexit has even created new teaching opportunities and a chance for ESCP to capitalise on its presence on either side of the economic divide. “What is convenient is that the courses on the Paris campus deal with the EU context and the courses on the London campus with the UK context,” Thomas says. “As all the new rules are not yet known, we are adjusting the courses as we go along. Having our campus and staff on site makes things much easier.”
Among those who still see value in studying in London is Stefania Lai, who left her family in Sardinia to complete the MSc finance degree programme at Bayes Business School after completing her undergraduate degree in banking, finance and financial markets.
Her goal is to become a trader and one of the attractions of Bayes, which is part of City, University of London, is its location in the heart of the UK capital’s financial district, close to banks that could hire her, she says.
“London, for me, is a big, busy place, full of opportunities,” Lai says. “New York might have been the other place I could have studied, but it was never really feasible because it is so much more complicated from a visa point of view than the UK for a European — even after Brexit.”
Lai is confident about landing her ideal job when she graduates — and with good reason, according to EY analysis of the market post-Brexit. The consultancy’s report in March found that 43 per cent of companies had moved jobs and operations out of London due to the UK leaving the EU, resulting in a loss of about 7,600 jobs to other EU cities — but that is still a fraction of all the financial services jobs in the UK capital.
While this has helped training providers in other locations, by creating more local jobs for their students, it is a relatively small loss for London’s financial centre, says the AACSB’s Mescon.
“This is not an exodus at the scale of the City of London, which still employs over 300,000 people in the financial sector,” he says. “The future of London as a centre for financial training is unlikely to be disputed any time soon.”