Scottish financial services sector enjoys decade-long surge in exports - TheCityUK report

Scottish financial and related professional services accounted for some £8.8 billion of exports in 2020, an 86 per cent surge over the previous decade, a new report has revealed.

The study from TheCityUK also found that financial services exports from Scotland accounted for 7.6 per cent of Britain’s total financial services exports in 2020.

The industry body estimates that related professional services exports from north of the Border accounted for 4.2 per cent of Britain’s total related professional services exports.

All regions and nations across the UK generated trade surpluses in financial services in 2020, according to the report. London had the largest financial services trade surplus of £34bn, followed by the south east of England (£5.1bn) and Scotland (£4.6bn).

Scottish financial and related professional services accounted for some £8.8 billion of exports in 2020. Picture: Jon Savage

Anjalika Bardalai, chief economist and head of research at TheCityUK, said: “As London is one of the world’s leading international financial centres, it inevitably leads the UK’s exports of financial and related professional services. But the idea that only London sells these services overseas and the rest of the UK focuses on domestic activity is misleading.

“Scotland makes an important contribution to exports of financial and related professional services, demonstrating the vital economic role the industry plays across all parts of the country.

“In addition, as the UK braces for an economic storm, the surplus generated by financial and related professional services provides an important buffer against the risks of a widening trade deficit.”

Sandy Begbie, chief executive of Scottish Financial Enterprise, said: “This report shows the tremendous growth in financial and related professional services exports from Scotland over the last decade to 2020. It underlines the important contribution this industry makes to our national economy, bringing growth and jobs.”

In terms of the destination of British financial services exports, 71 per cent went to non-EU countries and the remaining 29 per cent went to the EU in 2020.

For the UK, the US was by far the largest destination for financial services exports, TheCityUK noted, accounting for 34 per cent of total financial services exports in 2020. Other notable non-EU destinations for industry exports were Japan (3.5 per cent) and Canada (3.4 per cent).

Some 27 per cent of Scottish financial services exports went to the EU in 2020, and the remaining 73 per cent or so went to the rest of the world.

TheCityUK is the industry-led body representing UK-based financial and related professional services.

A report last year suggested that Scotland was becoming increasingly attractive to overseas financial services firms looking to set up new bases.

Although the six foreign direct investments (FDI) in the sector recorded in Scotland in 2020 was two fewer than the previous year, the nation fared better than the UK as a whole during the most difficult year in recent history and continued its decade-long trend as the most attractive UK location outside London.

EY’s UK Attractiveness Survey for Financial Services also found the appeal of Scotland for future investment in the UK had risen from 5 per cent in 2019 to a high of 15 per cent in 2021.