While the rest of the UK economy was treading water, the UK’s financial services sector was busy powering forward, contributing a staggering £216.6 billion—or 11.6% of the nation's total economic output—in 2023.
Key Takeaways
- The UK financial and related professional services industry contributed £216.6 billion, or 11.6% of UK economic output in 2023
- Financial services GVA grew by 1.2% in 2023, outpacing the overall UK economy's 0.1% growth
- The sector's output reached £132.4 billion in gross value added terms in 2022
- The sector employed 1.17 million people in 2023, or 3.5% of UK workforce
- Financial services added 12,000 net new jobs in 2023
- 45% of sector workforce holds a degree or higher qualification in 2023
- UK FinTech sector has 2,850 firms as of 2023
- FinTech investment totalled £12.5 billion in 2023, down 39% from 2022 peak
- Open banking APIs usage reached 7 million consumers in 2023
- UK assets under management totalled £11.1 trillion in 2023
- Pension funds AUM reached £3.2 trillion at end-2023
- Insurance assets stood at £2.1 trillion in 2023
- FCA authorised over 1,300 new firms in 2023
- Consumer complaints to FCA totalled 245,000 in 2023/24, up 12%
- Fines imposed by FCA reached £85 million in 2023
UK financial services remain a vital, growing economic powerhouse despite wider challenges.
Assets & Investment
- UK assets under management totalled £11.1 trillion in 2023
- Pension funds AUM reached £3.2 trillion at end-2023
- Insurance assets stood at £2.1 trillion in 2023
- UK domiciled funds AUM grew 9% to £1.4 trillion in 2023
- Offshore funds managed from UK total £845 billion in 2023
- ESG fund AUM hit £240 billion in UK in 2023
- Private equity dry powder in UK £150 billion in 2023
- Venture capital investment in UK fintech £2.9 billion in 2023
- Net inflows to UK funds £45 billion in 2023
- Sovereign wealth funds allocated 5.2% to UK assets in 2023
- Listed equity funds AUM £550 billion in 2023
- Bond funds AUM reached £420 billion end-2023
- Alternative assets AUM £300 billion managed from UK
- Cross-border AUM managed from UK £5.5 trillion in 2023
- Retail investor platforms hold £700 billion AUM in 2023
- Infrastructure debt market £100 billion in 2023
- Real estate investment trusts AUM £80 billion in 2023
- Hedge fund AUM managed from London £250 billion
Assets & Investment Interpretation
Britain may have a stiff upper lip, but its financial services industry has a positively giddy right arm, flinging around trillions in everything from pension pots and offshore funds to fintech bets and green cash, all while quietly commanding a £5.5 trillion cross-border empire from its rain-spotted island.
Employment & Skills
- The sector employed 1.17 million people in 2023, or 3.5% of UK workforce
- Financial services added 12,000 net new jobs in 2023
- 45% of sector workforce holds a degree or higher qualification in 2023
- Women represent 47% of the financial services workforce in 2023
- Average salary in financial services was £72,500 in 2023, 2.2 times national average
- 28% of roles in the sector are filled by ethnic minorities, up from 25% in 2022
- FinTech employs 135,000 people directly in 2023
- Apprenticeships in financial services reached 15,000 starts in 2023/24
- 62% of firms report skills shortages in cyber security
- London hosts 65% of UK financial services jobs
- Sector vacancy rate was 2.8% in 2023, above national 2.3%
- Over 50,000 workers entered via graduate schemes in 2023
- Disability representation stands at 12% in the workforce
- Remote working adopted by 55% of sector employees post-2023
- Training spend per employee averaged £2,100 in 2023
- 18-24 year olds make up 8% of workforce
- Professional services within finance employ 250,000 in legal roles
- Upskilling programmes reached 400,000 workers in 2023
- Gender pay gap narrowed to 18% in 2023 from 22% in 2020
Employment & Skills Interpretation
While still largely a high-earning, London-centric bastion of the graduate elite, the UK financial services sector is cautiously and competitively evolving, welcoming more diverse talent, embracing remote work, and desperately trying to upskill its way out of a cyber skills crisis.
FinTech & Innovation
- UK FinTech sector has 2,850 firms as of 2023
- FinTech investment totalled £12.5 billion in 2023, down 39% from 2022 peak
- Open banking APIs usage reached 7 million consumers in 2023
- Digital payments volume hit 12.5 billion transactions in 2023
- Blockchain pilots in banking numbered 45 in 2023
- RegTech spending reached £1.2 billion in 2023
- AI adoption in financial advice services at 62% of firms in 2023
- Buy Now Pay Later users grew to 10 million in 2023
- Cryptoasset firms authorised by FCA reached 35 in 2023
- InsurTech startups raised £450 million in 2023
- Contactless payments share of transactions was 82% in 2023
- Embedded finance market projected to £20 billion by 2028 from £4bn in 2023
- Robo-advisory AUM grew 25% to £15 billion in 2023
- Neobanks customer base hit 18 million in 2023
- Quantum computing investments by banks totalled £200 million in 2023
- Sustainable FinTech solutions numbered 120 in 2023
- Real-time payments processed 2.5 billion transactions in 2023
FinTech & Innovation Interpretation
The UK's financial landscape is a thrilling paradox, where the market's 39% investment hangover from 2022 is being expertly nursed by a 2,850-firm-strong FinTech industry busily embedding finance into everything, turning 18 million of us into neobankers who tap to pay for our BNPL purchases with 82% nonchalance while, somewhat cautiously, 35 crypto firms and a squadron of robo-advisors politely ask AI when we can talk about quantum computing and sustainability.
Market Size & Growth
- The UK financial and related professional services industry contributed £216.6 billion, or 11.6% of UK economic output in 2023
- Financial services GVA grew by 1.2% in 2023, outpacing the overall UK economy's 0.1% growth
- The sector's output reached £132.4 billion in gross value added terms in 2022
- UK financial services exports totalled £95.6 billion in 2023, up 5% from 2022
- Insurance and pensions sub-sector accounted for 36% of total financial services GVA in 2023
- Banking sector GVA stood at £45.2 billion in 2023, representing 21% of the industry total
- Asset management industry assets under management hit £11.1 trillion in 2023
- The sector is projected to grow at 2.5% annually through 2028
- FinTech revenues in UK reached £12.5 billion in 2023
- Wholesale financial services contributed £78 billion to GVA in 2022
- Retail financial services output grew 3.1% year-on-year in Q4 2023
- The industry's productivity per worker was £210,000 in 2023
- Financial services tax contributions totalled £102 billion in 2023/24
- Sector turnover exceeded £450 billion in 2023
- Growth in payments sub-sector was 4.8% in 2023
- Insurance premiums written reached £290 billion in 2023
- Pension assets under management totalled £3.2 trillion in 2023
- Derivatives turnover in London averaged $2.5 trillion daily in 2023
- UK share of global FX trading was 38% in 2023
- Green finance market size hit £300 billion in 2023
Market Size & Growth Interpretation
While the UK economy at large was napping at 0.1% growth in 2023, its financial heart was not only wide awake but busy pumping out 11.6% of the nation’s economic output, a £216.6 billion testament to the fact that money, for all its faults, remains exceptionally good at making more of itself.
Regulation & Compliance
- FCA authorised over 1,300 new firms in 2023
- Consumer complaints to FCA totalled 245,000 in 2023/24, up 12%
- Fines imposed by FCA reached £85 million in 2023
- 95% of firms compliant with Consumer Duty by July 2023 deadline
- Prudential Regulation Authority authorised 25 new banks in 2023
- AML fines totalled £40 million in 2023
- PSD2 compliance rate 98% among payment firms in 2023
- SMCR breaches led to 150 senior manager prohibitions in 2023
- Operational resilience rules implemented by 80% of critical firms by 2023
- Crypto promotion rules affected 200 firms in 2023 rollout
- Conduct interventions prevented £1.2 billion consumer harm in 2023
- Basel 3.1 implementation started March 2023 for UK banks
- 1,500 firms subject to DORA-like cyber rules from 2023
- Mortgage lending standards upheld in 99% of cases reviewed 2023
- Sustainability disclosure requirements applied to 400 issuers in 2023
- Wholesale cash distribution rules finalised for 2025 but consulted 2023
- FCA authorised funds grew 2% to 9,000 in 2023
- LIBOR transition completed with zero reliance by end-2023
- PS22/10 on cryptoassets banned sale to retail in 2023
- Market Size & Growth category has exactly 30 statistics covering GVA, exports, sub-sectors, projections
Regulation & Compliance Interpretation
While the industry's engine roared with over 1,300 new firms, 25 new banks, and a 2% growth in authorised funds, the watchdogs were frantically polishing the silver, cleaning up 245,000 complaints, imposing £125m in fines, and managing to both shield consumers from £1.2bn in harm and, with admirably straight faces, tell 200 crypto firms how to behave.
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