Scotland remains 2nd in UK for financial services FDI

Sue Dawe, EY Scotland’s Managing Partner for Financial Services

Scotland continues to attract the highest number of UK financial services foreign direct investment (FDI) projects outside of London, according to the latest EY Scotland Attractiveness Survey for Financial Services.

Of the nine financial services projects recorded in Scotland, five were in Edinburgh, two were in Glasgow, with Motherwell and Dufftown each securing a project each.

“Edinburgh is again the top UK city outside London for securing financial services FDI projects,” said EY.

“Of the five UK financial services FDI projects that created more than 150 jobs in 2023, two of those were located in Glasgow.

“London remains the leading European city for FDI in 2023, a position retained for the last ten years, attracting 81 projects with Edinburgh also in the European top ten, at ninth place.

“London remains the leading UK destination for attracting financial services FDI, securing 81 projects in 2023 (up from 46 in 2022), with Scotland in second place, securing nine projects last year (up from eight in 2022).

“The North-East and North-West of England, which jointly secured four projects in 2023 is in third, and the West Midlands, which secured three projects in in fourth.”

EY said that ahead of its full Scotland FDI Attractiveness report – to be published on June 19 – investor sentiment finds that 26% of financial services investors looking to establish or expand operations in the UK over the next year would look to Scotland – up from 14% in 2023, and 12% in 2022.

London remains the top destination for those looking to establish or expand operations in the UK  at 37% – down from 41% in 2023 and 56% in 2022.

Wales is in third place at 23% – more than tripling from 7% in both 2023 and 2022. Edinburgh (25%) is the top city outside of London (37%) for investors looking to establish or expand operations in the UK, followed by Cardiff (21%).

Sue Dawe, EY Scotland Managing Partner for Financial Services, said: “Scotland’s financial services sector is a great example of resilience and innovation.

“EY’s latest report shows the sector continues to attract much enthusiasm amongst investors and confirms Scotland’s position as a premier investment destination.

“These results underscore the enduring strength and confidence that investors continue to place in our financial sector: where traditional institutions and emerging FinTech disruptors contribute to a vibrant, dynamic and forward-looking financial ecosystem.

“Financial services continues to be a pillar of the Scottish and UK economy – and is only increasing its position as pivotal player on the international stage.

“Industry, government and education sectors need to continue collaborating to produce and retain world-class talent if we’re to harness cutting-edge technological advancements which create a competitive environment for further investment and growth.”

Scottish Financial Enterprise CEO Sandy Begbie said: “EY’s latest Attractiveness Survey demonstrates the continued strength and attractiveness of Scotland’s world class financial services industry, based on the depth, breadth and maturity of our ecosystem, the quality of our universities and skills pipeline, and the leadership we are showing in priority areas like data, AI and green finance.

“We believe there is even greater potential waiting to be unleashed. Our sector’s ambitious growth strategy aims to add an additional £4-7bn to the Scottish economy over the next five years.

“These results also show that we are operating in an increasingly competitive marketplace and there is no room for complacency.

“It’s vital that industry and government work closely and constructively to further build upon our long-standing reputation as a good place to do business, attract further inward investment and create new high value jobs that benefit everyone in Scotland.”