Scotland continues to be the most attractive location for international investment into Financial Services outside London, according to EY’s 2019 UK Attractiveness Report.
The number of foreign direct investment (FDI) projects in the Financial Services sector remained at the same level as the previous year, with six out of the seven investments being brand new projects. The top country for inward investment was Switzerland with four projects followed by the US, the largest source of FS investment into Europe, with three.
When asked how the UK’s attractiveness in the future can be enhanced, investors ranked improving the skill levels of the UK workforce top (32%), followed by reducing corporate taxation levels (23%), providing support for foreign investors (22%), incentives for investment/R&D (20%) and reducing the regulatory burden on business (16%).
Scotland’s leading FDI sectors were digital and business services, which will be significant to FS as EY’s Head of Financial Services in Scotland Sue Dawe explains: “Across Scotland, digital and business services saw the highest volume of FDI projects. This will have a significant and increasing overlap into FS because of the continued growth of Fintech and subsequent finance supply-chain requirements. We’ll be watching this fast-moving sector interdependence with interest to understand how FS contributes to trends and successes in FDI across other areas.
“These figures are positive news for Scotland considering the backdrop of uncertainty felt across the UK, and shows companies continue to have confidence in Scotland’s offering. All but one FS project last year were brand new investments, rather than existing investors expanding scope or operations.
“One thing is certain: Scotland remains an attractive place for investment. We must continue to support our first-class FS ecosystem that has been cultivated over the years, and ensure the talent pool is skilled and agile, fed by an appropriate pipeline of talent, for Scotland to see FDI projects increase in coming years.”
The banking, insurance, and wealth and asset management sectors are still considered by investors to be top driver of growth for the UK as a whole.
Omar Ali, EY’s UK Financial Services Leader said: “Firms have continued to invest in the UK for the same reasons they always have, drawn to its talent, tech infrastructure, thriving FinTech hubs, quality of life, time zone, regulatory and legal systems and its reputation as a world-leading Financial Services sector. It is critical to the UK’s future economic prosperity that politicians quickly focus on achieving an orderly exit and clarifying the role of Financial Services in our future trading relationship with the EU.”