The city of London

Background

Money laundering is a plague that must be eradicated from the city of London at all cost.  Over the past few years, residents, as well as business people, have lost money, jobs and home to various pyramid schemes. Moreover, billions have been laundered through the city of London in as much as it is supposed one of the safest and cleanest places in the world for business. This has necessitated the establishment of a new national economic Crime Centre, with authority to commission the Serious Fraud Office to investigate the worst cases of fraud, money laundering and graft. In a statement, the home secretary has issued stern warnings as she announced the creation of a new national economic crime centre, within the National Crime Agency which will oversee the national police response. This move was furthered in the effort to ensure corrupt insiders in the sectors including that of law enforcement, criminal justice as well as the border force are all brought to book. To have a better understanding of the business relationship with the government, an analysis of the business ecosystem is critical.

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PESTEL analysis of the City of London

PESTEL analysis is an important analysis of a business environment considering it highlights the Political, Economic, Social, Technological, Environmental and a Legal analysis of the business environment giving out information that relates to the climate of the particular environment ( Issa et al., 2014).

Political analysis of the city of London

Politically, the city of London adheres to democracy and effective leadership. The governance is democratic that embraces the distribution of power between the arms of government making it a system of checks and balances. However, the Brexit threw it in a state conundrum making the political environment very uncertain. The political uncertainty of the city since the Brexit, however, does not come as a surprise considering there have been wrangles on the extent of integration with EU as it was considered as a major political problem to the British politics. This political uncertainty negatively impacts the prospects of the city as more and more investors, and business persons feel insecure about the future of the city.

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Economic analysis

The city enjoys a high GDP and a favourable investment climate; however, the government is challenged by a high debt that has constrained their expenditure. Nonetheless, the city still enjoys a favourable climate for investment and is considered one of the safest places in the world to do business in. However, there have been a serious of schemes to launder money as well as phishing which has rendered some of the citizens broke (Travis, 2017). This affects the perspective of the prospectus investors as they might feel insecure putting their money in a city that is crawling with dirty money, for instance, drug money from various drug cartels.

Social analysis

The residents of the city of London enjoy good education system and strong health care. This has been attributed to many years of strong economic development. However, the dependency ratio of the elderly constrains the city as it is estimated to be at being at 16% and expected to rise significantly in the years to come additionally there is the challenge of child poverty that the city is struggling to raise from. There has also been sufficient support for the middle and the lower class making the gap between the rich and the young narrower,

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Technological analysis

The city of London has invested so much in the department of research and development, and this has helped in boosting the competitiveness of the city especially with regards to the use of Information and Technology. This strong Research and Development department of the city has greatly improved the performance of the city with reference to technological development. Additionally, there are good intellectual property laws that work towards safeguarding these laws.however the biggest challenge is that the city faces the lack of skilled personnel who can research and development activities in the city.

Legal analysis

The legal system of the city of London is well organised, effective and transparent making the business environment of the city conducive to business as there are no barriers that would otherwise hurt the business practices. The taxation laws have boosted the economy since they have sealed all the loopholes for tax evasion. The city also enjoys high business freedom making it one of the most ideal places to invest in or even run a business in additionally, there is effective legislation that ensures that the legal system is properly enforced without favouritism or even corruption.

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Swot analysis of the city of London

The SWOT analysis is a strategic tool that is used in the analysis of the internal strengths weaknesses, opportunities and threats of a business (Dyson, 2004; Helms & Nixon, 2010; Jurevicius, 2016). The tool has been considered effective, and from it, a matrix can be developed from the various strengths and weaknesses that have been evaluated in the process.

Strengths

London city was founded in a country that has embraced the need for quality higher education making a world-renown centre for academic excellence that admits both national and international students. The city also nurtures talent development and innovation. The city of London is also a world-renown centre of fashion in the world as it has cutting edge styles and designs that help it grow and develop into one of the most competitive economic centres in the world. The city is also multicultural as it has attracted people from all walks of life who live and work within the city. Moreover, the city enjoys superb distribution networks, consumer satisfaction reliable suppliers, automation as well as good returns on the capital expenditure

Weaknesses

The city of London has a plethora of weaknesses. To begin with, the research and development function of the city cannot be compared with that of other major players in the market; additionally, the organisation structure is not compatible with the present models of business, and this has greatly hindered their expansion in adjacent product segments. There is the need for the review of the investment in the technology as the technology that is currently available will not drive the enterprise to the achievement of the business goals.

Opportunities

The new taxation policies will significantly impact the manner in which the city of London will be conducting its business thereby opening new opportunities for players in the city to maximise their profits. The low rates of inflation have brought stability to the market, and this has facilitated the drop in the interest rates and has enabled the players in the city to access credit at considerably lower. Technological advancements have also significantly changed the manner in which business is conducted making the city apply strategies that will significantly help in raising the standards of living in the city

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Threats

The Brexit is a threat to the economy of the city of London. Since the Brexit, many pyramid schemes have been used to rip-off the residents of London of their hard-earned income. Additionally, the money laundering schemes that are taking place in the city negatively impacts the investment decisions of various investors since nobody would want to put their resource in institutions that would otherwise lead to losses. However, the move by Amber Rudd to announce the new anti-corruption strategy will help in significantly reducing the incidences of grafts and money laundering thereby making the prospects the city of London as this strategy will help the investors have more confidence in the systems in the city.

The effect of Brexit to money laundering in the UK have been far-reaching. Pre-Brexit, the EU Anti-money laundering laws and directives acted served the United Kingdom and played a significant role in ensuring that it was business as usual, however since the Brexit the implementation of the framework that regulates money laundering and predicate crimes is likely to be affected. However, this has been the case considering that even after Brexit these laws are still applicable in the UK and the other EU state nations. This has been attributed to the fact that these AML directives have been introduced to internalise the AML changes that are recommended by the FATF and the United Nations AML treaties (Mugarura, 2018). While it is true that the UK is no longer in the EU and is not bound by the European Union laws, it will continue to assume an important role in the UN as well as other oversight authorities. Moreover, it is in the best interest of the UK government not to turn a blind eye to the Anti-money laundering directives as it might affect the economy negatively.