The Clustering of Financial Services in London*



phone and with video-conferencing. They help because they make things more
efficient but it’s never going to replace the face-to-face contact and that’s face-to-face
contact in all aspects, even internally there is a point when you have to go and meet
people even if you’ve seen them on a video-conferencing basis because you don’t get a
feel for that relationship aspect.

It is important for firms to be able to meet, especially with their top-level clients who
require, and are prepared to pay for, a premium service. This may include receiving visits
from back office as well as client-facing staff. One insurance firm emphasized their
clients’ need to meet the person who will be dealing with their claim in the event of
mishap. Several interviewees emphasized the importance of trust:

Trust is very important and there’s a price attached to that. We do a great deal to try to
preserve and maintain our reputation and credibility and reliability.

The compactness of the City also means that it is possible to have a greater density of
interaction. This has a number of benefits. Important among them is the ability to build a
relationship and allied to it the ability to build a reputation.

We know most people in the City involved on the property side and just walking
through the City you’ll meet people that you know and its important to have that
relationship to know what’s happening in the market - people you can trust, people
you can use to advise you. And it’s important with all the people that you deal with to
have that regular contact ... a lot of activity ... is done ... through personal contact ...
its done through talking to people.

The compactness of the City is an advantage in terms of serving overseas customers,
since it affords them the chance to come to London and have meetings with all their
advisers and perhaps also meet a range of different banks, for example. Talking about
international clients, one firm stated:

If you’re talking about corporate finance, big finance, you want to get together in a
room. So if you have a community like London where you have lawyers and
accountants and investment bankers all operating, then the client will tend to come to
you. There may be meetings where you say you want to go and see them, for example
in areas of the UK outside London, but at the execution phase then you would tend to
do that near the people who drive the execution process - that tends to be the bankers
and the lawyers for example, where documentation is being produced.

20



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