The recent events of Westminster and Brussels have led to a sombre atmosphere amongst many businesses, but especially in financial services (FS).
A sector that was ahead of the game in preparing for Brexit is still waiting for clarity, with the ongoing uncertainty continuing to undermine and delay business planning and decisions.
Yet for Scottish FS firms, there are some positive signs. In the medium term, one of key drivers for success will be how the sector utilises technology, which will help reduce costs as well as offering the real time and personalised services that customers now expect.
The good news is Scotland has an innovative hi-tech sector that employs around 100,000 people and world-class universities producing more than 10,000 graduates in maths, computer science, engineering and technology every year. This pipeline is vital to help fuel our future growth.
This thriving innovation sector attracts investment. Right now, more than 100 FS firms are developing and buying solutions from technology-providers. A dynamic cluster of more than 3,500 digital economy firms in Scotland operates alongside well-connected supply chains with access to a large pool of talent. We’re seeing this make an impact on the ground as the rapidly expanding fintech, cyber security and data science sectors grow. Given the anticipated growth in 2019 around artificial intelligence and the use of cloud services, this can only help Scotland’s relevance and importance to the FS sector.
The recently released prospectus for Scottish Financial Services makes clear that this mix of skills, innovation and the strong history of FS is already massively important to the wider Scottish economy. In banking alone we have Barclays significantly expanding its Scottish presence through a new campus in Glasgow, which will create up to 2,500 roles.
It’s easy to forget but FS means so much more than just jobs and tax revenue. As well as enriching our global reputation, our banks help businesses grow and individuals to afford homes. Our insurers protect our health and wealth and the asset-management industry helps us invest for the long term.
Of course, Brexit remains a worry for many in the sector. EY’s recent Brexit Tracker found FS firms across the UK have already announced plans to move £800 billion of assets abroad. While that’s a small proportion of the total, it’s likely to be the tip of the iceberg as uncertainty continues. Most of the firms we speak to have planned for a range of scenarios, but worryingly, I sense some are still not Brexit-ready.
We can’t be complacent, but the good news is the fundamentals are in place for financial services to thrive in Scotland. The FS industry and politicians need to continue to work closely to make sure that Scotland grasps the opportunity, regardless of Brexit.
Sue Dawe is head of FS in Scotland for EY