Scotland is entering a new age of financial services

The SNP’s Cabinet Secretary for Finance, Economy and Fair Work explains how technology is catalysing Scotland’s economy.

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Scotland is already an established, successful financial hub – and that will continue in spite of the uncertainties posed by Brexit. Scotland has a strong heritage and international reputation in financial services and is home to some of the largest financial services companies in the Europe, such as Aberdeen Standard Investments and Royal Bank of Scotland, and to a thriving fintech sector. 

It is the UK’s most complete financial services centre outside London, with world-class capabilities in banking, investment management and asset servicing, and insurance and pensions, employing over 86,000 people across the country, with a deep pool of talent in the skills needed to power a modern financial services sector. 

Our labour market is one of the best in the UK, due in no small part to our internationally renowned universities, which produce high-calibre graduates to work in the sector every year.

We want the sector to continue to be an attractive place to work. And most of all we want the sector to grow and to continue to create high-value jobs.

In Scotland we have the fundamentals in place to achieve these ambitions; our economy is open and competitive, we have a highly skilled workforce, great quality of life and an attractive cost base compared to other financial centres. 

The long-standing reputation of the sector relies, first and foremost, on the talent of the people that it employs. Availability of skills and a supportive investment environment will be essential in ensuring that the sector is able to capitalise on the  future opportunities – particularly in the innovation–led fields of big data and fintech. 

Scotland’s financial sector cannot afford to rest on its laurels. The world of financial services is changing. It is essential that we seek out new opportunities to diversify our financial services industry, so that the industry can continue to prosper and grow.

The rapid pace of change in the world of technology is transforming the way in which financial services companies operate and the way in which customers access services.

Such changes present opportunities right across the financial services landscape – from the large firms who will derive great benefit from the innovative use of data to the small, innovative start-up companies developing the ideas and technology such advances will rely on. 

In Scotland we have strengths in these areas that will allow us to carve out a niche in high-tech, high-growth companies that can be at the forefront of developing the sector.

And I hope the recent appointment of our first Digital Economy Minister, Kate Forbes, will help Scotland to expand in this sector. Our future success in financial services will be underpinned by our expertise in data and informatics. The School of Informatics at the University of Edinburgh is ranked number one of its kind in the UK – and among the top one per cent in the world. Our Data Lab – one of our eight national innovation centres – brings that academic expertise together with industry, to identify and capitalise on new opportunities.

All of that is helping to put Scotland at the forefront of data-driven innovation. We are already emerging as a leading centre for the development of financial technology. Edinburgh and Glasgow have a higher rate of fintech start-ups than any other part of the UK – including London. The Scottish government, in partnership with our enterprise body Scottish Enterprise and the University of Edinburgh, has established Fintech Scotland – an organisation designed to focus on the needs of the industry and drive its growth.

We have many well established businesses, but we must also continue to encourage innovation, whether through new challenger banks entering the market or the establishment of new enterprises at the cutting edge of technology.

The continued prosperity of the industry will be, in part, dependent on its ability to maintain its edge and reputation in developed markets, but it will also be determined by its ability to adapt to and embrace new technologies and new markets so that high-quality jobs continue to be created in Scotland.

Scotland’s financial sector has embraced that challenge. The strong spirit of innovation in Scotland’s financial sector is just one of the characteristics that makes Scotland a magnet for global firms. 

Scotland is a good place to do business for established businesses and new entrants alike, with significant global companies such as HSBC and Morgan Stanley choosing Scotland as a key location for their business. 

Scotland is the most successful part of the UK outside London in attracting inward investment and we are working hard to ensure that Scotland continues to attract that kind of high-quality investment. We are not just selling Scotland as a place to invest, but also as a fantastic place to work, to live in, to study and to visit. 

The Scottish government is focused on creating a positive environment for businesses of all kinds to flourish. We are creating the economic conditions that will attract business through measures such as increasing government support for research and development, establishing a National Manufacturing Institute and developing a Scottish national investment bank. 

The threat of Brexit makes it even more critical that Scotland builds on its already outstanding reputation as a global financial centre and realises its full potential. Our strong financial services sector underpins growth across Scotland’s economy, with access to finance essential to support ambitious businesses with the capability and hunger for growth.

Strengthening Scotland’s economy needs the support of the financial services industry and the technology sector, and the growth that is generated will create opportunities for all – in financial services and beyond.