By Eileen Conway
It’s estimated that last year saw Scotland’s financial and professional services sector contribute almost £15 billion in gross annual value (GVA) to the economy. This is a hugely significant amount and is equivalent to approximately 10% of Scottish economy. According to the Scotsman the sector experienced a year-on-year GVA growth rate of 3 per cent and now employs around 150,000 people. Scotland has become a hub for assets and banking as well as fintech and insurance. But will this employment growth trend keep going in 2025?
With economic uncertainty looming, interest rates unpredictable, and worldwide markets fluctuating, Scotland’s economic outlook is in doubt. What drives this growth, what the dangers lie along the way, and what do the experts believe will occur within the coming year?
Key Drivers of Scotland’s Financial Services Expansion
Strong Banking and Asset Management Heritage
Scotland has a rich history of asset management and banking excellence, with Edinburgh and Glasgow being the financial centers. Major institutions like NatWest and Standard Life, to name but two, continue to expand operations, creating new opportunities.
Foreign Investment and Business Growth
Scottish banks and global investment banks have been growing in Scotland due to the fact that they are drawn by the country’s qualified workforce and strong regulatory environment. Scottish government policies have also promoted foreign direct investment (FDI), which is favorably inclined toward investors who are looking to establish a base in Scotland.
Government Support and Policy Initiatives.
The Scottish government gives its financial sector the benefit of a business-friendly regulatory environment, which is full of government-supported initiatives such as tax relief and innovation funding. The Scottish National Investment Bank (SNIB) is also a key provider as it strategically invests capital in financial services companies.
Growing Demand for Sustainable and ESG Finance
With sustainability guiding financial decision-making, Scotland’s position as a leader in ESG finance has been a considerable plus. Banks are expanding green finance and responsible investment teams. This has been a key factor in driving further employment.
Recovery in Post-Pandemic Economy and Job Hiring Bounce Back
The world economy’s recovery from the COVID-19 pandemic has generated additional consumer and business activity. Scottish banks and other financial institutions have added jobs to meet increased demand for lending, wealth management, and corporate finance services.
All these drivers have fueled Scotland’s financial sector expansion in 2024. But with potential economic challenges looming on the horizon, the question is—are the gains sustainable through 2025?
The Role of Fintech Innovation and Digitalization in Future Growth
The rapid expansion of digital banking platforms and fintech companies has been one of the key drivers of employment. Fintech firms offering payment processing, blockchain, and AI-powered financial services are drawing in capital and talent, making Scotland one of the world’s foremost fintech hubs.
In addition to the traditional finance industry, fintech is transforming other industries—one of the most apparent examples being iGaming. The intersection of safe payments, blockchain, and AI-driven fraud detection has made online gaming sites secure and more convenient.
With the use of fintech innovations, leading iGaming websites, such as those on the AskGamblers review site for example, rely on fintech developments for convenient transactions as well as for protecting players’ money and personal information. Fintech is also being used to offer responsible gambling tools and resources as can be seen on Gamble Aware.
As fintech innovation continues to develop, its influence will filter into other industries, boosting innovation and jobs in Scotland’s financial services and beyond.
Challenges and Risks: Can the Growth Be Sustained?
While Scotland’s financial sector seems to be doing well this year, there are several threats and challenges that could temper its growth. I’ve highlighted some key examples:
Economic Uncertainty and Market Volatility
Global financial markets are faced with volatility challenges as a result of inflation, interest rate uncertainty, and geopolitical tensions. If the economic environment does not pick up, investment and employment in Scotland’s financial services can decline.
Increased Competition from Other Financial Hubs
Scotland is actually becoming quite a major finance center but under growing competition from London, Dublin, and other global finance centers. To remain competitive, Scottish businesses would have to continue to innovate and attract the crème de la crème of talent from across the globe.
The Role of AI and Automation
As technology drives innovation, automation and AI may reduce the requirement for certain financial roles. Scottish companies will need to balance job creation with digitalization to ensure career prospects in the long term.
Regulatory and Political Uncertainty
UK government and international monetary regulatory changes could impact the sector. Secondly, the Scottish independence debate and its economic implications could also introduce significant uncertainty into business.
Predictions for 2025: More Jobs or a Slowing Down?
Most experts believe that Scotland’s financial sector will continue to grow, though at a less hectic pace. One sector that could be a key driver for this continued growth is fintech and digitalization.
The rapid adoption of AI, blockchain, and open-source banking will be the key to the creation of new jobs, particularly in technology-driven roles. In addition, government backing and investment will be paramount.
Continued support from the Scottish National Investment Bank (SNIB) and a variety of fintech programs will attract new businesses and talent to the industry. Others predict that economic uncertainty could make employment growth plateau or even grind to a halt.
2025: A Year of Transition For Scotland
Although a slowdown in total hiring is possible, the sector isn’t shrinking—rather, it is evolving. Some traditional jobs may shrink, but less traditional ones in fintech, compliance, and ESG finance will emerge. While the record-breaking job growth of 2024 may not be repeated, the sector will be stable, with new opportunities in technology and sustainable finance driving its future growth path.
