Scotland reclaims top location for financial services FDI outside London in latest EY Attractiveness Survey

►          Scotland attracted eight significant foreign direct investment (FDI) projects in 2022, up from three in 2021, reclaiming the title of most attractive outside of London

►          Scotland perceived most attractive outside London, with those planning investment in the next year up two percentage points from 2022 (14%, from 12%) while London in down 15 percentage points (41%, from 56%)

►          17% of global investors reported financial services plans in Edinburgh over the next year

►          With 76 financial services projects, the UK was the strongest performing European market – with UK projects up 17% from 2021

Scotland has returned to its historic, long-held position as the top location for financial service foreign direct investment (FDI) outside of London, according to EY’s latest Attractiveness Survey for Financial Services.

London remains the most attractive UK destination for financial services FDI (46 projects in 2022), with Scotland in second place at eight projects (up from three in 2021). Scotland has held the second-placed region for financial services FDI – at least jointly – for nine of the last ten years, with the exception of 2021. The third-placed region in 2022 was the North-West of England with six projects. 

Of the eight Scottish projects, five were expansions to existing projects while three were new undertakings, spread across Edinburgh (five projects total – three expansions, two new) and Glasgow (three project total – two expansions, one new).

These findings come ahead of the full Scotland Attractiveness Survey publication later this month.

Global investor sentiment showed Scotland’s attractiveness within financial services is joint second with East of England at 8% but takes sole second place among those who plan to establish or expand operations over the next year. This has risen to 14% of those surveyed, from 12% last year. Edinburgh is the top city outside of London with 17% of investors reported financial services plans in Scotland’s capital over the next year.

London retains this top spot for investor sentiment at 57% but has reduced to 41% this year from 56% last year among those planning to establish or expand operations over the next year. However, 80% think the UK will retain or improve its level of financial services attractiveness over the next three years.

Investors cite key areas for future strategic investment as being:
1 - the liquidity of markets and availability of capital (38%)
2 - the level of tech adoption by citizens and administrations (35%)
3 - the stability of political and regulatory regimes and safety of securing measures to prevent a major crisis (28%)

Sue Dawe, EY Scotland’s Managing Partner for Financial Services, and SFE Deputy Chair, said:

“This is great news for Scotland’s financial services sector. To see a solid mix of both new and expanded projects - as well as our return to top location outside London - shows that Scotland is delivering for investors.

“Looking to the future, financial services investors remain confident in Scotland. While the number of projects is only one metric in FDI attractiveness, the significance and scale of individual projects – particularly in financial services – shouldn’t be overlooked. With links between Scotland and London remaining strong, it’s clear that the two locations – which have historically held the top two spots in the UK league tables – can benefit from the respective successes.

“I’m passionate about being part of an industry that offers the next generation of workforce a meaningful career, fosters a strong skills pipeline, and gives back to communities it operates in. As an industry we need to keep working hard to make financial services an attractive career option for our young people – and those looking to retrain – and empower the brightest to excel, no matter their background. Scotland is punching above its weight on the global stage, and we need to keep fighting fit.”

Sandy Begbie, Chief Executive, Scottish Financial Enterprise, said:

“It’s welcome news to see Scotland retain its position as the UK’s major inward investment hub for financial services outside of London in EY’s latest Attractiveness Survey.

 “Scotland’s financial services industry has a number of major strengths for investors, from the depth, breadth, and maturity of our ecosystem to talent and innovation, to our increasingly strong reputation as a global centre for green finance and fintech.

 “We also recognise that we are in an increasingly competitive domestic and international marketplace, leaving no room for complacency. The continued growth and development of Scotland’s financial services industry is a key priority for SFE. In the next few months we plan to deliver a new sector growth plan, while we will also be increasing the promotion of our industry internationally over the next few years.

 “Collaboration with both the Scottish and UK Government, as well as with key partners like City of London Corporation, and stakeholders from across the industry, is key to achieving this aim.”