Financial Services Industry Site Selection Trends During the COVID-19 Pandemic
by King White, on Jul 25, 2022 9:48:39 AM
The financial services industry is a resilient, staple industry in the global economy and includes a wide range of companies including banks, investment houses, insurance companies, consumer finance companies, mortgage lenders and real estate firms.
In the United States, the industry employs approximately 6.9 million workers, up slightly by just over 250,000, or 3.8%, from the 6.68 million employed in the sector in 2019 prior to the pandemic. The industry employs both high-end and entry-level positions ranging from wealth managers and executives to entry-level positions such as call center and claims processers.
COVID's impact on the sector
The industry sector has historically been a 100% work-from-the-office industry due to fraud concerns and various government regulations. The COVID pandemic, however, caused a radical shift in the sector as large employers such as Bank of America, Citibank, JPMorgan Chase, United Healthcare and Liberty Mutual were forced to send their employees home.
Jamie Dimon, CEO of JPMorgan Chase, was originally one of the most outspoken advocates of returning employees to the office.
On the flip side, companies like UnitedHealthcare and CIGNA have embraced the work-from-home model.
Site selection activity in the sector
There continued to be some site selection activity in the sector despite the impact of COVID. Below are some of the notable projects:
- In 2020, insurer Centene Corp. announced plans to invest more than $1 billion for a massive regional headquarters in Charlotte, North Carolina, with plans for over 3,000 new jobs. The first phase of the project, 800,000 square feet on nine floors, is under construction and expected to be one of the largest financial industry regional headquarters deals to come online this year. Centene is receiving over $400 million in economic incentives.
- Citibank plans to expand its Tampa, Florida, operations to accommodate more than 1,700 new jobs.
- In February 2021, the city of Cleveland, Ohio, offered Rocket Mortgage state tax incentives to add 630 new jobs and retain 757 jobs in Cleveland, Ohio, but the deal was announced more than a year before the mortgage industry started to show signs of stress. In April 2022, media reports said Rocket Mortgage would trim its workforce as mortgage demand began falling although details about where that would happen were vague.
- In 2020, Santander Consumer Finance announced a new $22 million call center in Odessa, Florida with 875 new jobs. Santander is set to receive over $2 million in economic incentives.
To help understand where financial services companies have located and expanded, Site Selection Group has identified 25 of the largest biotech projects announced since the beginning of the COVID pandemic.
Largest Financial Services Industry Projects
March 2020 to July 2022
|Company||Location||Expansion Type||Total Jobs||Capex (US$M)|
|Centene Corporation||Charlotte, NC||New Site||3,738||$1,034.00|
|Bell Bank||Chandler, AZ||Expansion||1,810||$0.00|
|Shellpoint Mortgage Servicing||Tempe, AZ||New Site||1,810||$0.00|
|Rocket Mortgage||Cleveland, OH||Expansion||1,387||$0.50|
|Visa||Atlanta, GA||New Site||1,000||$0.00|
|Santander Consumer USA||Odessa, FL||Expansion||875||$22.00|
|Union Home Mortgage||Strongsville, OH||Expansion||695||$10.90|
|Veterans United Home Loans||Columbia, MO||Expansion||647||$0.70|
|Farmers Insurance||Phoenix, AZ||Expansion||612||$0.00|
|NewDay USA||West Palm Beach, FL||New Site||600||$0.00|
|Merastar Insurance Company||Las Vegas, NV||Expansion||600||$3.00|
|Dave Ramsey||Franklin, TN||Expansion||599||$52.40|
|TP ICAP Americas||New York City, NY||Expansion||530||$0.00|
|Mulberry Management Corporation||Tempe, AZ||Expansion||514||$0.00|
|Intercontinental Capital Group||Charlotte, NC||Expansion||500||$5.80|
|Freedom Financial Network||Tempe, AZ||Expansion||422||$0.00|
|PennyMac Financial Services||Tampa, FL||New Site||400||$5.60|
|BNP Paribas||Wayne, PA||New Site||400||$0.00|
|Robinhood Markets||Charlotte, NC||New Site||400||$11.70|
|Investor Cash Management||Wilmington, DE||New Site||395||$15.40|
|PennyMac Financial Services||Phoenix, AZ||Expansion||346||$0.00|
Source: Site Selection Group, IncentivesFlow, Press Releases