Speech by Lord Mayor Alan Yarrow: ‘The future of financial services hubs – a view from London & Johannesburg’
A checked against delivery of the speech delivered by Lord Mayor Alan Yarrow at the Gordon Institute of Business Science on 12 October 2015.
‘The future of financial services hubs – a view from London & Johannesburg’
Good afternoon everybody!
Pleasant introductions like that always remind me of a friend of mine, who had to give a speech at a big business dinner.
He was terrified. But eventually the moment came and he had to steel himself.
His host leant over to him, and whispered in his ear:
“Are you ready to speak now, Boss…
…or shall we let them enjoy themselves a ittle longer?”
The nature of financial services hubs changes from country to country and from year to year.
Even in my solitary year as Lord Mayor, there have been some extraordinary events that you might describe as ‘acts of God’ – the oil price, the Swiss Franc, the Volkswagen scandal.
With these constantly poised round the corner, ready to pounce, how can one talk about the future with any certainty?
The short answer is that you can’t. But what you can do, is make educated predictions. Decisions based on the best available intelligence.
That is what the City of London has been doing for thousands of years. Assessing situations, measuring risk, determining the best course of action.
As Lord Mayor I am an ambassador for the City, and indeed for the whole range of the UK’s financial and professional services. I speak to and for the City, and I promote the UK regardless of what’s going on at home and in the wider world.
And I also believe in the power of the big financial hubs – including London and Johannesburg – to fuel jobs, growth and prosperity across the world.
I expect that those large centres will remain key to the infrastructure of global finance.
The traditional ‘big beasts’, like London and New York, will of course be at the forefront.
But there are also distinct opportunities for other, regional centres that are able to demonstrate their unique offers.
For example, since I took on the role of Lord Mayor I’ve been to centres like Dubai, Shanghai and Singapore. They are all at various stages in their developments into genuine global superhubs.
This move towards regionalisation should sound tantalising to all the movers and shakers here in Johannesburg! You have a real opportunity to cement your position as a hub that services the region and develops regional institutions.
My visit to the Johannesburg Stock Exchange a few days ago only strengthened that idea in my own mind.
But it has always been thus. The world of finance has always been replete with opportunities – the trick is being an early adopter!
Back when maritime ruled the world, London saw the development Lloyds of London – the unique “insurer of last resort” for the world’s biggest risks.
During and after the ‘big bang’, we shone at asset-management, private equity, venture capital.
And now, with new innovations disrupting the status quo in finance, infrastructure, communication, legal services and just about every other field, we are working hard at that too.
That word, ‘disruption’, is increasingly common. It has shaken off the lingering sense of unwashed hackers sitting in their garages and has now become something covetable – a way to encourage meritocracy, for all business to compete on a more equal footing.
But if today’s methods of disruption are new, the concept certainly isn’t.
The Industrial Revolution. The invention of the web. Even the Great Fire of London! These were all pretty disruptive too.
One of my predecessors as Lord Mayor, John Wilkes, well understood the power and necessity of disruption in a global hub like London.
Wilkes was a chancer, libertine, debtor, demagogue and democrat. He was also reportedly the ugliest man in London. And he was a famed wit: In a famous exchange with the 4th Earl of Sandwich, the latter exclaimed, "Sir, I do not know whether you will die on the gallows or of the pox."
To which Wilkes retorted: "That depends, my lord, on whether I embrace your lordship's principles or your mistress."
But above all, Wilkes was a lover of liberty in all its forms, especially political and religious.
He stood for votes for all – and this was in the 1780s! He wanted to see, across London’s skyline, “rising in the neighbourhood of a Christian Cathedral, the minaret of a Turkish mosque, a Chinese pagoda and a Jewish synagogue …”. 250 years ago!
Wilkes would like London today: 270 nationalities; 300 languages; cathedrals, minarets, synagogues, temples.
A world city, with a diversity of talent.
Human capital is just as important as financial capital.
But it’s not a question of pure numbers.
The UK and South Africa rub shoulders with the likes of China and India – countries many, many times our size. And yet we compete. We more than compete. We can thrive.
And it’s because of education, training and qualifications, or ETQ.
The success of an existing or aspiring economic hub rests squarely on professionalism. The more professional your workforce, the better your reputation and the more likely you are to attract investment, business and growth.
As well as being Lord Mayor I am also the Chairman of the Chartered Institute for Securities and Investment, or the CISI, which provides vocational qualifications to over 40,000 people every year in over 70 countries – including, I am very happy to say, South Africa.
You might say that our presence here is small but perfectly-formed.
We have recently signed a Memorandum of Understanding with the University of Johannesburg, which will result in some of our qualifications being built into undergraduate programmes.
It’s a great step. And it will pay dividends for those students, South Africa and also the global economy itself.
As will investment in primary and secondary education – the building blocks of business. Subjects like English, maths and sciences, taught well and taught early.
I know the South African government – like the UK government – has recognised the need for improvement in this area.
There is massive expenditure allocated to education and the South African government’s forward-thinking ‘Action Plan’ is already improving the quality of learning. But more needs to be done to raise standards in maths and science – and the UK stands ready with our support and our experience.
The talent pipeline begins early, and China and India are both investing huge amounts of time and money into their schools.
If places like the UK and South Africa want to retain our place on the world stage then we have to shore up our educational foundations against the tide of competition lapping around us.
The best way to do that is to share best practice, and take the most effective learning techniques from all over the world. That is what CISI does, and it is a characteristic of almost all the most successful educational institutions.
As Lord Mayor, there is one educational achievement that I am particularly proud of!
The Mansion House Scholarship Scheme!
It allows some of the most talented young people from around the world to come to the UK and study in our terrific institutions!
And if you want to see the calibre of the Mansion House Scholars, all you have to do is look around you – because we have one of these high-flying young people with us today!
Shameela Soobra-Money…please stand up and let’s give you a big round of applause!
The current Scholar, Alexander Terblanche, would love to be here, but understandably his MBA at Oxford takes priority. But we can all raise a glass to his health, and to the continued success of the three of them.
Ladies and gentlemen.
All countries rely on the talents of their young people. And there is no more valuable investment than an investment in their education.
Through schools, universities, apprenticeships, continuing development, specialist institutions and every other form of learning – education nourishes economies, from root to branch.
And we in the UK stand by our friends in South Africa, ready to share our expertise and our experiences.
From the CISI to the ACCA, and from Imperial College to City and Guilds, we have a huge number of institutes – all of which are willing to work with you to share best practice and ratchet up our standards even higher.
If you want to explore those opportunities, please come and speak to me, the trade delegation or any staff from the British High Commission in Pretoria or UK Trade and Investment in Johannesburg.
It only remains for me to say thank you to our hosts, thank you to all the organisers and thank you to all of you for coming.
I look forward to your questions later.