Foreword

In an era marked by rapid changes, from global technology to shifting economic landscapes, the financial services sector stands at a pivotal crossroads.

EY research explores the unique opportunities and challenges facing Scotland's financial services leaders, compared with other international markets with fast-growth financial services centres. The findings are compelling.

If Scotland can harness these “accelerator” opportunities, the financial services sector alone (excluding related professional services) could see its annual Gross Value Added (GVA) contribution increase by an impressive 21% by 2028.

This potential growth supports the Scottish Financial Enterprise (SFE) sector growth strategy and the ambition to elevate the GVA of all financial services (including related professional services) to between £17bn - £21bn within five years.

Furthermore, the anticipated addition of 16,000 new jobs by 2028 – representing an 18% increase – underscores the sector's capacity to drive economic prosperity and promote social mobility.

The EY Financial Services Accelerant Framework serves as a strategic lens through which we analyse these growth dynamics, identifying five common pillars shared by leading financial markets: technological infrastructure and innovation, regulatory and legal frameworks, cross-border business environments, demographics and labour supply, and macroeconomic fundamentals.

Central to this growth narrative is the recognition that technology infrastructure and innovation are paramount. An overwhelming 94% of financial services leaders pinpointed technology as a crucial catalyst for progress. This sentiment is echoed in the importance of a robust regulatory and legal framework, with 93% of leaders viewing it as essential for future growth.

Scotland's ability to navigate the complexities of a post-Brexit landscape, while fostering a conducive cross-border business and trade environment, will be critical in maintaining its competitive edge.

Demographics and labour supply also play a vital role in shaping Scotland's financial services future. While 91% of leaders acknowledge the significance of a skilled workforce, challenges remain in attracting and retaining top talent, particularly from abroad. Coupled with the macroeconomic fundamentals and policy environment, which 94% of leaders deem critical, it becomes evident that a multifaceted approach is necessary to propel Scotland's financial services sector to new heights.

This report seeks to understand the levers that can accelerate growth in Scotland's financial services sector. By examining the success stories of the world's fastest-growing financial services hubs, we can collect valuable insights to inform effective strategies for Scotland.

While these findings are new, it is imperative for stakeholders within Scotland's financial services sector to reinforce existing strengths and address potential barriers. The insights presented in this report are not merely a reflection of current conditions but a call to action for all involved to collaborate and innovate.

The sector has already done a lot of the thinking about where we need to go, and it is reinforced by this research; we now have to turn that strategy into action, driving sustainable growth and prosperity for years to come.