New York overtook London as world's key financial center on uncertainty about the U.K.'s departure from the European Union, according to an online survey of financial services executives by compliance consultants Duff & Phelps published Monday.
More than half (56%) of respondents said New York is world's "preeminent" financial sector vs. 34%, who said London was, with only 22% predicting London will still be the major force in financial services at the end of talks over a new trading agreement between the U.K. and EU, expected to be completed by Dec. 31.
A year earlier, 53% of executives said London was top global financial hub, ahead of New York, which was named by 42% of executives. Still a third of respondents said U.K. has the most favorable regulation for financial services. Some 26% named New York top for regulation, while 18% opted for Singapore.
Over a third (34%) of the survey respondents were based in the U.S., 25% were based in the U.K., while 11% were based in Hong Kong. The remaining 30% of respondents came from Ireland, Singapore, Luxembourg, France and other countries.
Among the biggest challenges for 2020, 24% survey respondents named the competition for talent. For 20% of respondents, both cost reduction and cost of compliance were key challenges. Less than 10% of respondents noted liquidity risk and investment style drift as a top priority.
In its annual global regulatory outlook, Duff & Phelps said 47% of respondents said investor demand will drive environmental responsibility in the financial sector vs. 25% of respondents, who said regulation will drive it.
About two-thirds (64%) of the 240 senior executives working in financial services in banking, asset management, hedge funds, private equity, broker dealers from the U.S., U.K., Asia who were surveyed also said the regulation is currently effective in preventing financial crime.
Still, just over a third of executives said they spent more than 5% of annual budgets on compliance.