The growth of financial services since 1992 has been more than double the rate of the UK economy as a whole. Productivity in the sector has grown more than three times that of the economy too. And it will account for an increasing share of the economy and GDP growth - providing the regulatory and tax environment does not deteriorate. One of the key challenges for leaders in the sector is to shape the agenda to ensure its successful future.
As CEO of the British Bankers' Association (BBA), I am one of the principal industry spokesmen on public policy for the UK banking sector. But the British industry does not operate in isolation. The City of London has a large foreign banking presence, so many of our members belong to banking associations around the world.
This obviously shapes our work. In particular, the needs of EU-based members are vital.
Directives from Brussels drive much of the domestic financial law and regulation in EU states - so major European banks are acutely interested in ensuring that the UK regulatory environment remains optimal.
In my opinion, the industry will represent itself most effectively through a consensus view. In such a complex stakeholder environment, one quickly sees the need for a co-ordinating industry body at EU level. This role is played by the European Banking Federation (EBF).
Representing banking associations from the EU countries plus Iceland, Norway and Switzerland, the federation brings together the national associations' chief executives every month to oversee crucial policy work.
The key to success - indeed relevance - is the preference of the European Commission and European Parliament to listen to a pan-European industry voice rather than the special pleading of a sovereign state, bank or banking association.
Whereas continental Europe tends to be 'policy optimistic', the UK generally favours a 'market optimistic' approach.
So to advance the UK position effectively, we must attain thought leadership on the various issues under deliberation. This requires the input of experts from both industry and government - principally the Treasury - working in harmony.
It also demands firm negotiation. One of my most challenging tasks as chair of the EBF's executive committee has been to integrate the banking associations of the 10 new EU accession countries. Maintaining the federation's record of accomplishments when a consensus among 28 is needed will require expertise, understanding, planning and implementation.
Of course, we have to recognise where the EU agenda stems from: the legislative and regulatory environment for financial services is determined by a complex interaction of national, regional and international processes, with numerous stakeholders playing active roles. Much EU work originates from supranational bodies such as the Basel Committee on capital adequacy, the Financial Action Task Force (FATF) on money laundering and the International Accounting Standard Board, to name just a few.
One response from industry has been the establishment of the International Banking Federation (IBFed) by the American, Australian, Canadian and Japanese bankers' associations and the EBF. Between them, they represent 18,000 banks worldwide, including about 700 of the world's top 1,000 banks. They account for some US$31 trillion of assets.
IBFed focuses on areas such as international accounting standards, corporate governance and financial crime. The FATF has highlighted the need for a comprehensive global anti-money-laundering policy. The emphasis has been on equal implementation internationally and an acceptance of a risk-based approach - a common principle in the UK but little used elsewhere. IBFed must therefore work towards a broadly consistent appreciation of different levels of risk presented by products, transactions or entities but allow flexibility for differing national circumstances and for firms' own judgments.
Ultimately, the effectiveness of a truly international federation relies on its capacity to build common policy goals. As the EU enters the implementation and enforcement phase of its key capital market directives, there will be a direct impact on capital markets around the world and for non-Europeans operating in Europe. It is imperative, therefore, that leaders in the sector develop a better understanding with legislators and regulators.
For instance, closer co-operation could encourage discussion of extra-territorial issues such as the Sarbanes-Oxley Act and the EU Financial Conglomerates Directive. Prior consultation on legislation with potential extraterritorial effects could prevent conflicts from arising at a later stage.
All business leaders working in highly regulated global industries need to consider how to build effective partnerships. It means positioning the UK as thought leader and helping to set the regulatory agenda in partnership with regulatory bodies. This is my ambition for the BBA. It should be shared by other leaders across their own industries.
CV - Ian Mullen is chief executive of the British Bankers' Association. He is also chairman of the International Banking Federation and the UK Joint Money Laundering Steering Group. He previously held top management positions with four multinationals in London, Hong Kong and Zurich: at Midland Bank, P&O Asia and Jardines, and at UBS Private Banking, where he was chief credit officer, before taking up his role at the BBA in 2001.