Scotland ‘still UK’s second top financial centre’

Scotland is still seen as the second most attractive region in the UK after London for international investment into financial services, according to EY’s latest UK Attractiveness Survey for Financial Services.

“Within the UK, while London was once again the top destination for financial services FDI, Scotland was the second largest recipient with six projects – its two main cities, Edinburgh and Glasgow, recording three projects each.

“However, Scotland also recorded a decline in 2020 – a fall of 25% – from eight projects in 2019.

“The North West and Yorkshire & the Humber recorded three projects each in 2020, down from five and six respectively in 2019.

“As for which regions investors think will be the most attractive for future financial services investment into the UK, London came top backed by 31% of respondents with Scotland second with 15%.”

According to trade body Scottish Financial Enterprise, financial services are the biggest sectoral contributor to Scotland’s economy at £13 billion or 9.4% of Gross Value Added (GVA).

More than 160,000 people are employed in financial and related professional services in Scotland — with the sector encompassing fund management, pensions, banking, insurance, life assurance, asset servicing and professional services.

Scotland accounts for 24% of all UK employment in life assurance, and 13% of all banking employment.

The survey showed the UK continues to be Europe’s most attractive location for international investment into financial services, attracting 56 projects in 2020.

However, this was 43 projects lower than in 2019 and the gap with the second largest recipient of investment – now France – has narrowed.

Scottish Financial Enterprise CEO Sandy Begbie said: “These latest results from EY’s survey are extremely encouraging and reaffirm Scotland’s attractiveness as a prime, globally recognised location for inward investment in financial services.

“Scotland’s established strengths across financial and professional services are well known, from longstanding household names in banking, life and pensions and asset management, to some of the biggest names in global finance who choose to base their operations here.

“Added to that, Scotland’s other sector strengths and skills mean we’re well placed to innovate and create a world-leading centre for fintech, responsible investment and green finance.

“In the recently launched financial services strategy for Scotland, our members reaffirmed their commitment to collaborate with government and across other key sectors to deliver on these aims and recover strongly from the pandemic.

“We have a clear opportunity to capitalise on the momentum evidenced in these survey results and thrive in a way that has a positive impact in society and creates lasting benefit for future generations.”

Sue Dawe, EY Scotland’s managing partner for financial services, said: “Through arguably the most challenging market conditions of recent years, Scotland has demonstrated huge outward strength on the global stage.

“Scottish financial services firms entered the pandemic in a position of strength, and while a number of challenges still lie ahead, investor sentiment indicates strong cause for optimism …

“Scotland has a successful and deeply-established financial services ecosystem, with strong links between industry, government and our education institutions.

“This is particularly important to highlight to potential investors looking to establish and grow their financial services products and offerings.

“Ongoing and enhanced collaboration is key to working through this exceptionally testing period toward post-pandemic recovery, transitioning to a green economy and as we continue to attract foreign investment into Scotland.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.