The UK remains Europe’s most attractive destination for foreign direct investment (FDI) in financial services, despite a 32 per cent year-on-year decline in project numbers in 2024, analysis from EY has revealed.

EY’s Attractiveness Survey for Financial Services report showed that total financial services project numbers across Europe fell by 11 per cent year-on-year, from 329 in 2023 to 293 in 2024.

While the UK’s project numbers decreased from 108 to 73 during the same period, this was still more than double second-placed Germany, which recorded a 16 per cent fall to 32 financial services projects.

The UK therefore secured a quarter (25 per cent) of all European financial services FDI projects in 2024, although this was down from 33 per cent in 2023.

Further to the European FDI data, a global financial services investor sentiment survey in May 2025 found that 86 per cent of investors believed the UK will retain or improve its level of financial services attractiveness over the next three years, up from 75 per cent in 2024.

More than half (54 per cent) saw London as the most attractive European city for financial services foreign investment over the next year.

However, Germany was seen as the most attractive European country for financial services investment over the next year (47 per cent), followed by the UK (45 per cent).

“The UK has retained its position as Europe’s most attractive destination for financial services investment, despite investment falling across the region,” said EY UK and Ireland financial services managing partner, Martina Keane.

“The strength and depth of the UK’s financial services sector continues to capture global investor confidence – particularly as they navigate challenging market conditions. But competition is fierce, and while the UK industry is a clear leader, we cannot ignore the fact that investment levels have declined over the last year.”

EY’s study highlighted that the number of ‘new’ financial services projects across Europe rose slightly, from 233 in 2023 to 234 in 2024.

However, of the 73 financial services projects record in the UK in 2024, 53 were new, which was down from 85 in 2023.

Meanwhile, new financial services projects in Spain and Switzerland increased, from 14 to 21 and from 11 to 21 respectively.

The US was again the largest source of FDI in European financial services, and the UK was the leading recipient.

While projects fell from 38 to 28 during the year, the UK recorded a higher proportion of US investment (38 per cent) than its average for the decade (34 per cent).

“Whilst geopolitical and macroeconomic uncertainty has weighed on investor sentiment and business confidence this past year, cross-border investment remains key for global financial services firms as they look for growth and competitive advantage,” commented EY global financial services leader, Omar Ali.

“Global investors are undoubtedly still committed to Europe’s deep capital markets and highly skilled workforce and although investment fell both overall and in the region’s biggest markets in 2024, a number of financial centres bucked this trend.

“Switzerland, Spain, Italy and Luxembourg all recorded a rise in foreign investment, in part due to the progressive policy environment and specialist sector expertise they offer.

“Outside of Europe’s borders – notably in New York, Singapore and Hong Kong – competition is strong.

“With FDI levels down on previous years, it is more important than ever that Europe’s major markets find ways to outwardly demonstrate the pull factors that investors are looking for and collaborate where needed to keep investment within the region.”

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