Recognising vital part of economy

This is a landmark time for Scottish Financial Enterprise (SFE), the representative body for Scotland’s financial services industry, as it celebrates its 40th anniversary this month.

An event to mark SFE’s anniversary was held at the Royal Society of Edinburgh (RSE) last week –the same venue that hosted the organisation’s launch in May 1986.

SFE chief executive Sandy Begbie, told the event: “Our sector continues to outperform and contribute substantially to the UK and Scottish economy. While much has changed, the purpose of SFE today is almost identical to what it was in 1986. That is, to convene, connect and collaborate; be the voice of the sector; amplify what the sector does and its value, and promote the sector in the UK and internationally.”

Also speaking, Anton Muscatelli, president of the RSE, said: “Your sector is not only hugely important to the Scottish economy, but it is also a high productivity growth sector. It’s one that really represents the kind of dynamism we want to roll across the rest of industry in Scotland and the UK.”

At the event, Gail Izat, chief operating officer for Standard Life’s pensions and savings business, said: “Financial services remain a core pillar of the Scottish economy and the strength lies in the skilled workforce, a long-term record of innovation, and a supportive ecosystem that nurtures talent, fosters competition and drives growth. It’s an agenda that Scottish Financial Enterprise has championed for the last 40 years.”

Drawing the speeches to a close, Andrew Wilson, director of communications at Santander UK and SFE board member, observed that the Scottish financial services sector has become more international and ambitious over the years.

Reflecting on developments since 1986, Sandy said: “We are tremendously proud of what SFE has achieved over the last four decades.”

Since Sandy became SFE chief executive in 2020, there have been major changes across the financial services sector in Scotland, and globally.

He explained: “Technology has always transformed our industry. In the past, it was the advent of computers and the microchip – now it is the explosive growth of artificial intelligence, which promises to drive new ways to deliver and grow financial services, while reinventing society’s relationship with finance.”

In June 1985, just under a year before SFE was launched, a report entitled The Impact of Technology on Marketing Financial Services was published by Deloitte Haskins and Sells management consultants. In the introduction to the report, it stated: “Technology can lead to diversity as well as conformity”.

At that point, computers were just being introduced. The report identified “the chip, the computer and communications” driving technology that will impact financial services. Interestingly the report found that “ATMs are being placed in more diverse location, eg forecourts, supermarkets”.

The report concluded: “Eventually the financial services sector will find a new equilibrium, but it will have a totally different shape. Do you want to be part of that equilibrium?”

Given the scale and strength of Scotland’s financial services sector now, it would seem that businesses definitely did want to be part of the “equilibrium”.

It’s not just technology that has brought change – and will continue to do so – as Sandy explains: “We have also seen our industry is also now much more diverse than it was 40 years ago. This is both in terms of gender, but also in educational and social background – which can only be a good thing.”

The more recent publication Scotland’s Financial Services – Setting up in Scotland from last November describes the country as “an established, diverse and vibrant financial centre with an enviable ecosystem and talent pool. Scotland’s two main financial centres, Edinburgh and Glasgow, both have their own unique characteristics and key strengths, and are supported by world-renowned universities.

“While Glasgow continues to build its reputation as a major hub for operations, technology and innovation, Edinburgh is using its long-standing heritage in banking, investment and asset management to strengthen its standing among leading green finance and tech centres.”

It adds: “A modern financial powerhouse Scotland has evolved from its historic banking roots into a sophisticated, diverse financial services ecosystem. It is now a hub for multinational firms and nimble startups alike. One of Scotland’s unique strengths is the depth, breadth, and maturity of our financial and related professional services landscape.

”All areas of financial services are represented at scale in Scotland’s major cities, including banking, asset management, insurance and long-term savings, private equity, wealth management and venture capital.

And the report says Scotland has a thriving talent pipeline – its “workforce is its strongest asset. The nation boasts a deep pool of highly skilled professionals supported by world-class education and continuous development.”

Life begins at 40 – some healthy indicators

JP Morgan Chase The international banking titan’s its state-of-the-art European Technology Hub opened in Glasgow in 2024 with capacity for 2,700 staff.

BlackRock Edinburgh became the multinational investment firm’s first overseas office outside the US in 1998 and is now home to a highly skilled workforce of almost 1,500 people.

Encompass Corporation The global corporate digital identity leader has been heavily investing in Scotland.

Walter Scott & Partners Edinburgh-based Investment company has £80bn under management and 230 employees.

Scotland’s evolving financial services sector 40 years on

Then

Mid-1980s:

◆ Scotland was the United Kingdom’s second financial centre.

◆ Scotland’s financial companies held assets exceeding £70bn.

◆ Scotland’s investment managers accounted for10 per cent of UK fund management.◆ Scotland accounted for16 per cent of UK life assurance activity.

Now

◆ Scottish financial activity contributes £17.7bn in Gross Value Added (GVA).

◆ GVA per financial sector employee in Scotland is £117,218.

◆ Scottish financial sector offers a total of 151,000 jobs.

◆ Scottish financial services exports are worth £12bn annually (compared to Scotch whisky exports of £5.36bn in 2025)

◆ Scotland’s financial companies account for assets under management of £690bn.

In the beginning: saluting those who were first on board

Members of the working party and first SFE board

◆ Sir Thomas Risk (Chair)Governor of the Bank of Scotland

◆ Peter Balfour Vice-chairman of the Royal Bank of Scotland

◆ Angus Grossart Managing director of Noble Grossart

◆ J Raymond Johnstone Chairman and managing director of Murray Johnstone

◆ James Souness Managing director of the Life Association of Scotland

◆ Sir John Calman Shaw Executive Director of SFE

COMMENT

Tamzin Jandrell, Edinburgh office co-head, BlackRock: “Scotland’s financial services sector is built on a rare mix of deep technical talent, strong academic links and a highly collaborative regulatory environment. Edinburgh, in particular, stands out as a global hub for asset management and fintech.

“Looking ahead, the priority is scaling AI and data-driven innovation in a way that boosts growth and productivity – critical for the sector and for how firms like Black Rock continue to build here.”

Stuart Dunbar partner, Baillie Gifford: “If Scotland is to remain a leading financial and investment centre, we cannot rely on reputation alone. We need to attract ambitious, innovative people and businesses. That means stronger growth, competitive taxation and regulation, world-class education, and a clear signal that Scotland is open for business and investment.”

Stephen Flaherty, chief technology officer, Barclays: “Scotland’s financial services sector is a cornerstone of the economy, and its biggest strength is its people – the skills, talent and academic partnerships that continue to attract significant investment and support high‑value jobs.

“Opportunity lies in the evolution of that talent across business, technology, data and AI. That strength is reflected in Barclays’ investment and growth in Glasgow, where our global AI expertise is being developed.”

Gail Izat, COO, pensions and savings, Standard Life: “The sector’s strength lies in its skilled workforce, long track record of innovation and scale, and a supportive ecosystem that nurtures talent, fosters competition and drives growth.

“For the life and pensions industry, the challenges and opportunities are clear. We are living in an ageing society where too many people are not saving enough to support an adequate standard of living in retirement. Addressing this will require structural change – to increase levels of saving and to unlock greater investment opportunities here in Scotland and across the UK.”