Scotland regains crown as top UK location for financial services FDI outside London

Scotland has made a triumphant return to its long-held position as top UK location for financial services foreign direct investment (FDI) outside London, and is “punching above its weight on the global stage”, according to EY.

The latest Attractiveness Survey for Financial Services from the professional services giant found that London remains the most attractive UK destination for financial services FDI (46 projects in 2022), with Scotland in second place, recording eight projects, up from three in 2021. Of those eight, 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).

Additionally, EY Scotland has been the second-placed region for financial services FDI – at least jointly – for nine of the last ten years, while Edinburgh is perceived to be the most attractive city outside of London, with 17 per cent of investors reporting financial services investment plans in Scotland’s capital over the next year.

EY also found that, Scotland, alongside the east of England, was the joint-most attractive place to invest in the UK outside London, and 14 per cent of investors plan to establish or expand operations north of the Border over the next year, up from 12 per cent last year and the highest percentage recorded for any location outside the UK capital.

'With links between Scotland and London remaining strong, it's clear that the two locations can benefit from each other's successes,' says EY. Picture: Andy Buchanan/AFP via Getty Images.

Sue Dawe, EY Scotland’s managing partner for financial services, said: “This is great news for Scotland’s financial services sector. Scotland has deep roots in financial services, and it is positive that we can report improved investor confidence and growth in FDI projects. To see a solid mix of both new and expanded financial services projects in our major cities – as well as our return to being the top location outside London – shows that Scotland is delivering for investors.

“Looking to the future, financial services investors remain confident in Scotland. The number of projects is only one metric in FDI attractiveness, and over the years the significance and scale of individual projects in Scotland – particularly in financial services – is both notable and impressive.

Teamwork

"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 each other's successes. Scotland is punching above its weight on the global stage, and we need to keep fighting fit.”

Sandy Begbie, who leads Scottish Financial Enterprise (SFE), said: “Scotland’s financial services industry has a number of major strengths for investors, from 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.”

FDI was last year found to bring a 7,500 jobs boost to the Scottish economy, while Scotland outpaced the rest of the UK and Europe for such investment in 2021.