European financial hubs lose ground to Asian rivals in global index

European financial centres have experienced a notable decline in their global standing, with several major cities falling out of the top twenty rankings as Asian counterparts continue to gain prominence. The latest data from the 40th Global Financial Centres Index indicates that only four European centres made the list, a reduction from seven in the previous year. Paris, Amsterdam and Frankfurt were displaced by competitors from Asia, highlighting a broader erosion of the continent’s influence in the global financial landscape. This shift occurs against a backdrop of growing optimism for Asian financial and professional services hubs, which are increasingly positioning themselves as key global players.

London remains the pre-eminent European financial centre, holding the second position globally behind New York. The UK capital maintains a significant lead over other European rivals, such as Zurich and Geneva, by nearly thirty points. However, London has failed to close the gap with New York, dropping four points in the latest assessment. Both leading cities saw their scores decrease, with New York losing six points and London losing nine. Last year, the two cities were separated by just one point, but the recent results see New York firmly back in the top spot. London also faced setbacks in the fintech sector, slipping from fifth to sixth place as Shanghai moved into the top five. Hong Kong retained the top position in fintech, while New York pushed Shenzhen into third place.

The rise of Asia is driven by strong performance in human capital, expertise, capital markets, innovation and regulatory regimes. Six Asia Pacific centres featured in the world’s top ten, including Seoul, which has benefited from record highs in its main stock exchange due to the artificial intelligence boom. Chinese cities, including Hong Kong, Shenzhen, Shanghai and Beijing, also secured top ten positions. The region recorded the largest increase in average ratings, rising by 1.4 per cent. Respondents also highlighted the future significance of hubs such as Dubai and Singapore, which received over 150 and 137 mentions respectively, compared to just 29 for London.

Professor Michael Mainelli, chairman of Z/Yen, attributed the shift to Asian cities becoming anchors for major asset and wealth managers, while emerging markets draw global capital away from traditional centres. He noted that the strength of Asian finance, technology and artificial intelligence presents a significant challenge to established players. In the UK, the decline of London’s relative standing coincides with intense scrutiny of public markets following a wave of delistings. Companies such as Wise and Klarna have moved their listings away from London, while other firms have exited the UK market following private equity or mergers and acquisitions activity. Despite these challenges, the London Stock Exchange may see a new fintech listing soon, as digital commerce service Airtel prepares to list, according to its parent company, Airtel Africa. UK respondents expressed concern that London’s competitiveness may continue to decline relative to New York, Hong Kong and Singapore.