How do you optimise for today and build for tomorrow?

2. Skills

Our research shows that access to a skilled workforce is the single most important factor for financial services firms when deciding to locate or invest in Scotland, with 81% of all respondents stating this as a reason for doing so.

In the five years prior to 2019, there was an increase in job creation, with 86% of respondents having grown their headcount during that period. Respondents in the survey also stated they were actively recruiting for new roles at the end of 2019, mostly sourcing talent (graduates as well as ‘experienced hires’) from within Scotland and other areas of the UK.

The skills available in Scotland have also evolved with both current demand as well as expected future needs. In our survey, 62% of respondents noted increased recruitment during 2019 in more highly skilled roles in the fields of technology, digital and data science.

3. Value

Value is another key area of consideration for firms, with 38% of respondents listing low set-up and operating costs as a significant factor that attracted them to Scotland. Our research shows that, in comparison to other major European financial centres, operational costs for firms are relatively low in Scotland, especially given the breadth and depth of workforce skills in (2) above. The fact that the UK has the second-lowest corporate tax rate in Europe helps to underpin this. Additionally, out of the leading European financial centres, Edinburgh and Glasgow offer the lowest cost for commercial rent per square metre.

The individual benefits from working in one of the best-paid sectors in Scotland, as well as enjoying a lower cost of living and greater purchasing power in comparison with other European hubs, including London, Amsterdam, Dublin, Frankfurt and Paris.[4]

As one respondent in the survey put it: “There is a large talent pool from universities and Scotland is a large financial centre. There is no real reason for so much to be done in London, given the relative cost difference.”

Maintaining success

There is great cause to celebrate the strengths of the financial sector in Scotland. It is important, however, not to be complacent as the economy continues to deal with the impact of the COVID-19 pandemic. The challenge posed by the pandemic, and its impact on the economy and society, is significant, and only serves to underline the importance of the role the financial services sector has to play in supporting the recovery. It will be best placed to do so if we can address and ensure the following:

• Skills availability
• Investment in, and adoption of, digital technologies
• Industry promotion: showcasing the industry’s positive impact on individuals and wider society

Scotland benefits from a highly integrated financial services ecosystem and a shared industry agenda of increased, cross-sector collaboration, led by the trade body Scottish Financial Enterprise (SFE). This ability to effectively collaborate with key industry stakeholders, the UK and Scottish Governments and their agencies, as well as academia, will be critical in ensuring a robust recovery for financial services in Scotland. We note that the Scottish Government, for example, has announced fresh investment in skills and digital transformation initiatives in order to help meet the challenges posed by the COVID-19 pandemic.

In an uncertain economic and business environment, nothing can be taken for granted, and there must be a relentless focus on innovation and growth. Creative and collaborative solutions are particularly important in an environment of constant change — whether political, social, regulatory or technological.

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