UK Financial Services Market

UK Financial Services Market Overview:

The UK financial services market size reached USD 314.41 Billion in 2023. Looking forward, IMARC Group expects the market to reach USD 535.71 Billion by 2032, exhibiting a growth rate (CAGR) of 5.60% during 2024-2032. The market is a key contributor to the economy, primarily driven by robust banking, asset management, and insurance segments. Moreover, shifting consumer preferences, heightening digitalization, and strict regulatory framework are further propelling market expansion.

UK Financial Services Market Trends:

Increasing Shift Towards Digital Transformation 

The UK financial services market is experiencing a notable inclination towards digitalization, majorly driven by technological advancements and increasing customer demand for convenience. Fintech innovation is revolutionizing conventional banking, with digital wallets services, mobile banking apps, and contactless payments gaining extensive adoption. As per industry reports, 86% adults in UK are leveraging online banking system in the year 2024. Additionally, digital-only bank accounts increased from 24% in 2023 to 36% in 2024. Moreover, numerous institutions are also investing in advanced technologies such as blockchain and artificial intelligence (AI) to improve consumer experience and operational efficacy. In addition, regulatory frameworks are adapting to facilitate this digital shift, guaranteeing adherence and data security. The rise of digital-only finance platforms as well as banks providing personalized financial services is an escalating trend. Furthermore, this transformation is reshaping competition within the market, as both conventional financial institutions and fintech firms utilize upgraded technology to address the evolving consumer expectations.

Heightened Focus on Sustainable Finance

Sustainable finance is increasingly becoming a central objective in the UK financial services market, as environmental, social, and governance (ESG) criteria is rapidly impacting the investment decisions. The UK government’s target to achieve net-zero carbon emissions is significantly compelling financial institutions to leverage green finance strategies. For instance, in May 2024, HSBC UK, a prominent banking and financial services organization, entered into a new partnership with Greenly, a carbon accounting startup, to offer a carbon calculator tailored for small and medium-sized enterprises (SMEs). This tool enables SMEs to measure, evaluate, and mitigate their carbon footprint, supporting their sustainability efforts. Moreover, asset managers are currently integrating ESG factors into their portfolios, pertaining to the amplifying interest in sustainable investment funds and green bonds. In addition, regulatory bodies are also endorsing the necessity of greater accountability and transparency in ESG reporting. Furthermore, this trend highlights the market’s inclination towards conscious investing, with financial services providers actively unifying their solutions with sustainable development targets to appeal socially-conscious investors.

Rise in RegulatorEvolutiony

The UK financial services market is experiencing regulatory reforms to adapt to global financial changes and post-Brexit dynamics. The launch of new guidelines, such as those from the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) is redefining the adherence landscape. Moreover, such modifications aim to reinforce customer protection, financial authenticity, and stability within the sector. In addition, regulations are being implemented to cater to the elevating influence of digital assets and fintech in the country, including cryptocurrencies. For instance, as per recent industry data, the FCA introduced stringent regulations for cryptoasset promotions in early 2024, including a 24-hour cooling-off period and categorizing cryptoassets as restricted mass market investments. These measures aim to ensure crypto promotions are clear, fair, and compliant with consumer protection standards for high-risk investments. Moreover, institutions are intensely emphasizing on compliance technology (RegTech) to address these transforming standards effectively. Furthermore, the regulatory progression is fostering a more transparent as well as secure market, which is crucial in sustaining the UK's position as a major financial hub.

UK Financial Services Market News:

• In February 2024, Admiral, a UK-based financial services company, announced a strategic collaboration with Google Cloud to escalate its digital landscape by leveraging Google’s AI, data analytics, and machine learning services.
• In July 2024, Open Payment Technologies Ltd., a UK-based company, announced the launch of Kuady, a digital wallet application, which was developed to boost financial inclusion and transform the finance management of merchants.

UK Financial Services Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2024-2032. Our report has categorized the market based on type, size of business, and end-user.

Type Insights:

• Lending and Payments
• Insurance
• Reinsurance and Insurance Brokerage
• Investments
• Foreign Exchange Services
   

The report has provided a detailed breakup and analysis of the market based on the type. This includes lending and payments, insurance, reinsurance and insurance brokerage, investments, and foreign exchange services.

Size of Business Insights:

• Small and Medium Business
• Large Business
   

A detailed breakup and analysis of the market based on the size of business have also been provided in the report. This includes small and medium business and large business.

End-User Insights:

• Individuals
• Corporates
• Government
• Investment Institution
   

The report has provided a detailed breakup and analysis of the market based on the end-user. This includes individuals, corporates, government, and investment institution.

Regional Insights:

• London
• South East
• North West
• East of England
• South West
• Scotland
• West Midlands
• Yorkshire and The Humber
• East Midlands
• Others
   

The report has also provided a comprehensive analysis of all the major regional markets, which include London, South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

UK Financial Services Market Report Coverage:

Key Questions Answered in This Report:

• How has the UK financial services market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the UK financial services market?
• What is the breakup of the UK financial services market on the basis of type?
• What is the breakup of the UK financial services market on the basis of size of business?
• What is the breakup of the UK financial services market on the basis of end-user?
• What are the various stages in the value chain of the UK financial services market? 
• What are the key driving factors and challenges in the UK financial services?
• What is the structure of the UK financial services market and who are the key players?
• What is the degree of competition in the UK financial services market? 

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the UK financial services market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the UK financial services market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the UK financial services industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.