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Why Scotland’s financial sector is flourishing

Scotland has been ranked as the second largest financial centre in the UK, with an 8 per cent share of the UK’s bank lending to SMEs, totaling £7.7billion, according to major reports, strengthening the Scottish economy and therefore making it more attractive to investors.   It is safe to say, financial services in Scotland are currently flourishing. We wanted to know why. Why has Scotland become so prosperous? We spoke with Financial Services Specialist at Scottish Development International (SDI), Graham Hatton, to give us a broader insight into the rise of the financial sector in Scotland. 

Graham, how well is Scotland doing in terms of financial services right now? 

 “Scotland has a long history in Financial Services and many firms have grown over the years to become important members of the well-connected community here. Banks such as the Royal Bank of Scotland and Asset Managers like Baillie Gifford and Aberdeen Asset Management, as well as home-grown fintech companies such as Nucleus Financial and Money Dashboard are thriving in Scotland. Global firms which have invested in Scotland include Citi, JP Morgan, Morgan Stanley, State Street and Blackrock. Many of these firms also have significant technology functions in Scotland, such as JP Morgan which has established and grown its European Technology Centre in Glasgow.  They now employ over 1,000 technologists at that site.”

Why is Scotland so successful in this particular sector?

“There are a whole host of factors for businesses when choosing business locations to either expand into, or move costly line of business operations to.  These factors vary depending on the business, however the one constant which has been essential to all companies we have worked with is access to a skilled workforce, and the ability to scale up that workforce quickly. Scotland has a highly regarded education system that includes 5 universities in the top 200 globally. These universities produce over 15,000 graduates in technology related subjects and help fuel the high demand for tech skills in business. The cost of living is also significantly lower than cities such as London. As a result, staff can enjoy a high quality of life with lower overheads.”

“In addition to accessing talent there is also a large and diverse financial services sector in Scotland – the UK’s largest after London. This presents business opportunities to supply firms across sectors including Banking, Insurance and Asset Management.”

“New investors are also benefiting from the rapidly growing tech eco-system. Over the last 10 years the tech community in Scotland has grown rapidly and we’ve recently seen Fintech company FreeAgent list on the London AIM market and travel search firm Skyscanner be purchased for £1.4bn.”

“There is also strong support from Scottish Development Internati
nal and Scottish Enterprise, Scotland’s development agencies, to support companies’ growth ambitions. For example, Australian company Encompass set-up an office in Glasgow 18 months ago and they have expanded rapidly since then. They benefited from Regional Selective Assistance, a discretionary grant available for businesses which want to develop a project in Scotland, when they first set-up.  Since then they have received equity investment from the Scottish Investment Bank.  The package of support from SDI and partner agencies in Scotland will help accelerate the company’s UK and global growth.”

How does the Scottish ecosystem work, in a sense of connecting universities to the business world?

“Universities are a crucial part of the ecosystem. Since so many of Scotland’s universities are held in such high regard they attract some of the best students from around the world. For example, over half the students at the University of Edinburgh’s School of Informatics are from outside of th
e UK. When these students graduate many of them go on to work in local companies, from start-ups to multi-nationals.”

“In addition to supplying skilled graduates, Scotland’s universities are also a key source of world-renowned research and start-ups. To encourage collaboration across industry and academia the DataLab has been created to help industry access the data expertise within Scotland’s universities. They are running several projects with Financial firms to help them with specific challenges.”


What are the main strengths of Scottish business ecosystem right now? And how is it changing?

“A lot of cities and countries will highlight their highly skilled talent pool and that is certainly the case in Scotland. However, what I believe really sets Scotland apart is how connected the community is. People are constantly telling me how easy it is to access the business networks here and how open people are when welcoming new people. This can be very difficult in large cities but it works very well in Scotland and it helps to accelerate the growth of their business.”

“I’ve been speaking to many companies interested in expanding into Scotland and for them it’s important that they maintain the company culture that has got them to where they are. They have a need to hire people with an understanding of Financial Services but also people with experience of working in early stage tech companies. Scotland presents an opportunity to take advantage of a vibrant tech scene and a large local market.”


So there you have it. Scotland’s recent success, as explained by Graham Hatton. Scotland is a trusted partner.  A country which has strong connections and a track record of collaborating with London’s financial sector.  The strength of Scotland ultimately lies in its stability and security, based on a strong heritage and world-class capabilities in banking, fintech, asset management, insurance and pensions.  Scotland is open for business and SDI is ready to help. 




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