Exclusive:SNP and Labour urged to 'work with one another' to bolster Scots finance sector
Scottish Financial Enterprise points to growth in highly skilled jobs
The new Labour administration at Westminster and the Scottish government have been urged to “work with industry and one another” in order to drive further growth in Scotland’s financial and professional services sector.
Sandy Begbie, chief executive of Scottish Financial Enterprise (SFE) said that provided it received the right support, the sector could go “even further and faster” in the coming years, building on its existing growth.
It comes as the SFE’s latest report pinpointed a 15 per cent increase in the number of highly skilled jobs that have been created in the past three years, bolstering Scotland’s position as a leading financial centre.
The Scottish government said it recognised the “strong progress” that has been made, and that it would continue to support what it described as a “key pillar” of the economy.
In an update to its five year sector growth strategy, the SFE pointed to the ongoing performance of Scotland’s financial and professional services sector with 21,000 additional high skilled jobs created since 2023. At the halfway point of the strategy, the number of people employed in the sector is up from around 136,000 in 2023 to 157,000 today.
The update also shows that the sector’s economic contribution has grown significantly, with gross value added now standing at £17.7 billion, compared with £14.3bn when the strategy was launched.
The number of financial services foreign direct investment projects in Scotland has also increased from eight to 11, which the SFE said had helped to secure jobs, increase economic value and support exports, which now stand at £12bn across the sector.
Mr Begbie said the figures detailed in the update demonstrated the “strength, resilience and ambition” of Scotland’s financial and professional services, and called on Andy Burnham and John Swinney’s administrations to help drive further growth.
“That progress has been achieved despite a challenging economic, political and geopolitical backdrop,” he said. “It is testament to the expertise of people working across our industry and to the collaboration between firms, government, regulators, academia and partner organisations.
“As two new administrations take shape at Holyrood and Westminster, it is vital that both recognise the scale of this opportunity and work with industry - and one another - to support further growth. That means creating the stability, competitiveness and policy certainty businesses need to invest, innovate and create jobs. With the right support, we can go even further and faster over the next three years.”
The trade body’s update report said Scotland’s global standing as a financial centre has also improved. Edinburgh has risen from 34th to 28th in the Global Financial Centres Index, while Glasgow has moved from 51st to 43rd. The update also highlights Scotland’s continuing position as the largest fintech hub outside London, with 226 fintech firms and £2.86bn of fintech investment over the past eight years.
It also found that the proportion of people in Scotland who are unbanked - meaning they do not have access to traditional financial services - has fallen from three per cent in 2023 to two per cent. The SFE has launched a new bank account pilot aimed at ensuring every young person leaving school has the opportunity to set up a bank account.
The report said that a “key challenge” to the industry remained the economic impact of an “increasingly unpredictable geopolitical environment,” describing the changes that have taken place since 2023 as “a period of significant upheaval.”
It also said the tax burden and complexity was a “drag” on competitiveness and the ability to attract talent, while claiming that there has also been a lack of progress on the financial sustainability of the further and higher education sector, which the SFE said was critical to its future.
However, it concluded: “As we look towards the remainder of the five year period set out by the strategy, we will continue to build on the progress that has been made.
“That progress has only been possible through extensive collaboration between industry, government and partner organisations. However, the key factor in the success of our sector is the expertise, experience and willingness to innovate in each of the individuals working in Scotland's financial and professional services sector.”
Welcoming the update, Miles Celic, chief executive officer of TheCityUK, the industry-led body representing UK-based financial and related professional services, said: “Scotland plays a vital role in ensuring the UK’s continued position as a world-class international financial centre. It is fantastic to see how the Scottish industry has continued to grow over the past three years and SFE has really led that charge, not only to drive investment across key sectors but also to champion the industry’s contribution across the nation.
“Continued close collaboration between industry and government and greater pace and ambition to drive essential reforms will realise even greater growth and opportunity - and we’re very proud to support that goal.”
Economy secretary Stephen Flynn said: “Scotland’s financial and professional services sector has continued to make strong progress since the launch of SFE’s growth strategy in 2023, building on its position as a major contributor to the country’s economy.
“Edinburgh and Glasgow are recognised global financial centres, drawing on Scotland’s exceptional talent and expertise to attract investment and compete with the world’s leading financial hubs.
“The sector plays a vital role in driving growth, jobs and opportunity across Scotland. The Scottish government will continue to support its success as a key pillar of our economy.”
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