A better than expected outlook
The strategy we have set for the years ahead stands us in good stead to continue to help clients – and our firm – succeed and grow in a climate of significant change.
It has been another year of significant change for all businesses and, in particular, for Financial Services. From the US Tax Reforms to the introduction of Open Banking, the environment within which our clients operate keeps evolving at pace.
If I look back to the kinds of conversations we were having with clients 18 months ago and compare that to where we are now, the difference is real.
We were unsure if the industry would deliver ring fencing, meet Open Banking deadlines, few firms had announced their Brexit contingency plans in Europe, and many were still unsure when interest rates would start to rise.
This year, businesses are looking further out to future trading relationships, the specifics of Brexit in terms of operating models and immigration and at what it really means to be diverse and inclusive.
A positive year
Our business is not immune to the pace of change, but, nevertheless there are many things for our business to be proud of. For me, the highlights definitely include our appointment as auditors of Beazley, Nationwide, and Standard Chartered, and our retention of the Phoenix Group audit. These are fantastic achievements and testament to our ongoing focus on audit quality and the strong client relationships we have built over many years.
Out of 4,500 people in the UK, we now have 1,000 based outside London. As we see our clients’ businesses develop across the UK, we are growing UKFS in the North, Scotland and the South West. This year we are also investing in building our business in the Midlands, with plans to grow the team to more than 100 people to support some key audit wins and respond to the opportunities in the local market.
This year we launched Minds Made for Financial Services, our brand proposition that brings our global brand and purpose, Building a Better Working World, to life for our people, clients and communities within Financial Services. If you haven’t seen it yet, please take a look! I hope that, as alumni, you recognise the culture and the ethos that makes us different and you are as proud as we are of what EY stands for and delivers in the Financial Services market.
Supporting clients and the industry
We have remained focused on supporting our clients and the broader industry to respond to the challenges created by Brexit. I am proud of the quality of the work and the insight the teams deliver, and of our continued market leadership in this space, but I’m most proud of the work we have been doing to help the industry as a whole. Most recently, the report we wrote with TheCityUK in May 2018, The UK’s future immigration system and access to talent, sets out nine clear recommendations for how the immigration system for business could best work in a post-Brexit world. We recognise that talent is the single most important factor for the UK’s long-term competitiveness and were delighted to be able to help drive the debate on access to talent.
Earlier in the year, we also produced a paper on behalf of the Investment Association, which focuses on future trade relationships, analysing which markets across the world should be priorities for UK firms to invest in and trade with. I was delighted to support the Lord Mayor of the City of London and the City of London Corporation in a trade visit to the US in June to showcase some of the unique capabilities of UKFS and help lay the foundations for a strong trading relationship as we leave the EU.
Closer to home, this has of course also been a big year for diversity, with the Gender Pay Gap rightly bringing the lack of senior women in business into focus and putting FS in the spotlight.
EY has a long history of taking the lead on diversity issues, including the 30% Club, background-blind recruitment, targets for our own leadership, the Women in Finance Charter and Returnships. Even then, the Gender Pay Gap has made us think twice about our policies and progress. We were the first of the Big Four to voluntarily publish our Gender Pay Gap for Partners and we are proud of how this was welcomed by our people and the industry. But we know we have much more to do, and both FS and UKI are committing to a redoubled effort on diversity and, more importantly, inclusion.
A focus on the future
There is one other big thing we have focused on this year in UKFS and that is the future of our own business.
This year, as a Partner and Associate Partner group, we felt the time was right to think about what we want the business to look and feel like in three years’ time and agree what we focus our investment on to achieve that.
When we took stock of our journey over the last five or six years, it was encouraging to see how fast our own business has already changed. In that time, we have launched more than 10 new service offerings, which generate around 25% of our revenues.
Investing in technology
We have shifted our delivery model, increasing our use of onshore and nearshore delivery centres and our use of automation and artificial intelligence (AI).
And we have made a fundamental shift in our technology capability, building a market-leading Technology Enabled Transformation in Insurance and consistently investing in building out our robotics, AI, data and analytics, cyber, and blockchain capabilities across all three sectors – Banking & Capital Markets (BCM), Insurance, and Wealth & Asset Management (WAM). This is now gaining real momentum – we made five senior Partner hires in the last quarter of the financial year alone.
The growth of our Technology capability is a priority for our business, but I should also say that this is just one core element of our UKFS strategy. Our ambition is to ensure we make the most of emerging technologies for our business and our clients, while ensuring that we are the best place to work, we provide the best client experience in the market, we build new services and take market share in areas in which we are currently underweight, and that we genuinely fulfil EY’s purpose – Building a Better Working World – in everything we do.
Managing Partner, UK Financial Services