Back to the office: How proximity survived the pandemic in financial centres

Abstract

We examine the role of proximity in international financial centres during and since the covid-19 pandemic based on the case study of a Chinese bank branch in the City of London. Our qualitative data is based on 26 interviews conducted in 2021 and 2023, complemented with media-based information on other banks. As experimental studies hardly exist in economic geography, our quasi-experiment on how the forced lack of physical proximity impacted the performance of the bank offers a methodological contribution. Empirically, we show that physical proximity was badly missed in both internal and external activities of the bank, particularly in new relationships with employees, clients, and other financial firms. As a result, the bank returned to office work on an “at least four days a week” basis as soon as it could, following its peers in wholesale finance. We interpret these results through literature on the role of proximity in financial centres, and on factors affecting shifting workplace environments. We argue that the distinction between wholesale and retail financial services is central to understanding the changing geography of finance and workplace environments. We also highlight the distinction between short- and long-term effects of working from home, and the potentially extractive (as opposed to regenerative) character of the latter. In the conclusions we ask what our findings from the case study and media could imply for the future of financial centres. Questions posed and insights revealed by the paper are important for understanding the nature of work and cities in contemporary economies.