Scottish Financial Enterprise unveils strategy to see 'powerhouse' sector generate more financial and social prosperity

Scotland’s “prized” financial services industry could add a further £7 billion to the economy in coming years, and benefit every single citizen, under plans newly unveiled by Scottish Financial Enterprise (SFE) to help “unleash” greater potential in the key sector.

SFE boss Sandy Begbie, says: 'Scotland’s world-class finance ecosystem is an essential pillar of our economy, and we believe there is even greater potential just waiting to be unleashed.' Picture: Graham Flack.

The trade body launched the initiative – titled “Scotland’s new vision for financial services: a sector growth strategy using our technology and ecosystem advantage” – at the annual Scottish Financial Services Awards last night, which celebrate the contribution of firms and individuals to the sector.

SFE says the plans, backed by MSPs Richard Lochhead and Douglas Ross, intend to see the industry deliver long-term, sustainable growth, and help engender a stronger, fairer Scottish economy, amid a challenging backdrop. They seek to harness Scotland’s “immense human capital” to fuel innovation and fill skills gaps, enhance its capability as a key regional technology hub, and develop the nation’s finance ecosystem to drive transformation and attract investment.

The outlined targets, aimed to be achieved via actions “focused on collaboration, communication, and technological innovation”, include growing the sector’s gross value added (GVA) within five years to between £17bn and £21bn annually from £14.3bn (noting that financial and related professional services are already the largest contributor to the Scottish economy) and doubling the industry’s assets under management to £1 trillion by 2030.

Sue Dawe, SFE deputy chair, and head of financial services for Scotland at EY that sponsors the Scottish Financial Services Awards. Picture: contributed.

Also on the list of ambitions is propelling Scotland to the top regional financial centres globally, as measured by the Global Financial Centres Index; ensuring that Edinburgh ranks among the top 20 global financial centres, with Glasgow in the top 30; and increasing the sector’s economic contribution to, and wider impact on, society in Scotland.

Edinburgh was earlier this month hailed as the top spot for innovation in the UK beyond a “Golden Triangle” cluster of cities in the south of England, while Glasgow also ranked highly, according to a report from the British Business Bank.

SFE, which last month fired the starting gun on a major campaign to attract fresh overseas investment, says the strategy published today has been developed in collaboration with City of London Corporation, TheCityUK, FinTech Scotland, and the Global Ethical Finance Initiative, and is supported by both the Scottish and UK governments.

Furthermore, SFE says the Scottish finance industry directly employs around 136,000 people, with many thousands more in the supply chain, and with salaries a third higher than the average wage north of the Border, adding that industry leaders “believe Scotland is uniquely well placed to respond to the key trends shaping the future of the industry, including the growth in green and sustainable finance and fintech, and the rise of emerging technologies such as artificial intelligence [AI]”.

Sandy Begbie, chief executive of SFE, which last month debuted an initiative to drive interest in financial services careers among young people, has now said: “Achieving sustainable, inclusive, economic growth is vital if we are to create more of the high-wage, high-skill jobs our country needs to raise living standards and properly fund public services. Financial services must be at the heart of this ambition. Scotland’s world-class finance ecosystem is an essential pillar of our economy, and we believe there is even greater potential just waiting to be unleashed. Our sector growth strategy will unleash that potential and deliver long-term sustainable growth, and we are determined to make sure that everyone in Scotland feels the benefits.”

Richard Lochhead, Scotland’s Minister for Small Business, Trade and Innovation, said: “Scotland’s financial services sector is one of our prized industries, offering significant opportunities for economic growth and attracting further investment. SFE’s new, ambitious growth strategy sets these opportunities out clearly and is a significant vote of confidence in Scotland as a place to do business. By capitalising on our great strengths, and continuing to develop our innovative approach in emerging areas such as fintech and data, the coming years present an exciting time for the sector to play a leading role in growing a prosperous economy for everyone.”

Also welcoming the strategy was Scottish Tory leader Douglas Ross, who praised the key contribution made by Scotland’s financial sector. “A large part of that comes from the huge advantages of being part of the United Kingdom... but within the UK the Scottish sector is the largest outside London. [SFE] have identified the need to keep competitive against emerging financial hubs, and their proposals for doing so – building on our expertise in asset-management, embracing green, and sustainable finance and fintech – are rightly ambitious.

“But I share their conviction that the talent in Scotland – in our world-class universities, our technology industries with their pioneering work in AI and data, and the established position of our long-standing financial institutions – is up to that task. I’m delighted that it is being supported so firmly by both of Scotland’s governments, and look forward to it consolidating and growing the position of Scotland’s financial sector as a powerhouse within the UK, and as a global force.”

Sue Dawe, head of financial services for Scotland at EY (which sponsors the Scottish Financial Services Awards), and SFE deputy chair, welcomed the professional services firm’s contribution to the strategy. She added: “The ambition builds on Scotland’s deep financial services heritage, leveraging existing strengths in collaboration, innovation and skills to identify where and how we can further differentiate ourselves in a globally competitive market. I am excited to see the positive impact this will have on all areas of the business sector and look forward to contributing to its ongoing success.”

EY has, also today, announced record UK revenues of £3.8 billion for the year ending July 1 2023, a year-on-year jump of 16 per cent, and cheered the appointment of nine partners, 150 promotions and 100 graduates and apprentices in Scotland, bringing its total headcount north of the Border to more than 1,300. Dawe said the progress comes as “we transition to a green economy, respond to rapidly emerging technologies, and continue to attract foreign investment to Scotland”.