Publication - Minutes

Financial Services Advisory Board minutes: January 2020

Date of meeting: 8 Jan 2020
Location: Edinburgh

Record of discussion for the January 2020 meeting of the Financial Services Advisory Board (FiSAB).

Financial Services Advisory Board minutes: January 2020

Attendees and apologies

Attendees 

  • Philip Grant, Lloyds Banking Group, Industry Co Chair
  • Malcolm Buchanan, Royal Bank of Scotland
  • Graeme Jones, SFE
  • Catherine Burnet, KPMG
  • Professor Peter Mathieson, Principal, Edinburgh University 
  • Christine O’Neill, Brodies
  • Maggie Craig, FCA
  • Stephen Ingledew, FinTech Scotland
  • Barry Connolly, RBS/FiSAB Skills & Talent Lead
  • Jim McConville, Phoenix
  • Geoff Aberdein, Public Affairs Forum, SFE
  • Scott Stewart, Barclays 
  • Agnes Tolmie, Unite
  • Sue Dawe, EY
  • Damien Yeates, Skills Development Scotland
  • David Ferguson, Nucleus
  • Gerry Mallon, Tesco Bank
  • David Skinn, Aviva
  • Colin Stewart, Citi

Also in attendance

  • Ian Hanson, Skills Development Scotland
  • David Smith, Scottish Enterprise
  • Jane Morrison-Ross, Scotland IS
  • Willie Watt, Scottish National Investment Bank
  • Clare Carswell, EY
  • Alistair Brannan, EY
  • Jacqui Malinn, Tesco Bank
  • Riona Maclean, Tesco Bank
  • David Judic, Virgin Money UK
  • Arleen Arnott, KPMG

Scottish Government

  • Liz Ditchburn, Director, General Economy
  • Stephen O’Neill, Team Leader, Enterprise and Innovation
  • David Wilson, Programme Director, Scottish National Investment Bank 
  • Lynne Blair, Policy Lead Financial Services Fin Tech and Sector Development.
  • Francis Taylor, Financial Services, Policy Advisor

Apologies

  • First Minister
  • Cabinet Secretary for Finance, Economy and Fair Work 
  • Linda Hanna, Scottish Enterprise 
  • David MacMillan, Prudential 
  • Helen Page, Virgin Money UK

Items and actions

1. Welcome and Introductions (ITEM 1)

The Minister for Public Finance and Digital Economy welcomed everyone to the meeting and noted apologies, including those of the First Minister and the Cabinet Secretary for Finance, Economy and Fair Work. The Minister thanked Sue Dawe and her team at EY for hosting the meeting. 

1.1. Philip Grant thanked the Minister for the introduction, and for attending the successful Young Persons’ Parliamentary Reception on 3 December 2019.  

1.2. Philip noted the two priorities for the SFE.  Scaling up the pilot sessions and encouraging all FiSAB member to participate in the ongoing initiatives.  Attention must be paid to quantifying ambitions of the SFE and key areas, including diversity and sustainability require development.

1.3. Philip welcomed Willie Watt to the meeting as recently appointed, Chair of the Scottish National Investment Bank (SNIB).

2. Scottish National Investment Bank – SNIB (ITEM 2)

2.1. Willie provided an overview of the vision for the SNIB, seeing it as providing a catalyst for step-change in the economy.  The Scottish Government has committed £2 billion of investment capital to help create a more inclusive, low carbon economy and to make Scotland more competitive in the global market.

2.2. Final legislation for the Bank is going through the Scottish Government and it will be fully operational from the middle of 2020. The Bank should not be seen as competing with but rather partnering the private sector.  With its new mission-based approach and low carbon focus, efforts will be made to engage with large power companies.  A further update will be provided later in the year.

3. Scottish Government update (ITEM 3)

3.1. The Minister noted that the UK will leave the EU at the end of this month.  The Scottish Government has worked tirelessly to prevent the UK’s departure from the EU and FiSAB has done much to mitigate the effects of Brexit.  The Banking and Economy Forum has also been helpful in this regard.  The Scottish Government is keen to work with all parties regarding support for businesses. 

3.2. The Minister noted that Scotland’s economy has grown over the past year, that  employment rate is high compared to historical records and unemployment is low.  

3.3. The Minister continued that Brexit poses the greatest risk to Scotland’s economy.  The UK’s Budget will be published on 11 March and while the Scottish Government’s Budget would normally be 10 weeks after this, it will now be on 6 February.  

3.4. The Minister shared the views of the Scottish Government on why the digital economy represents Scotland’s economic future. We need to be fully capitalizing on the benefits of a digital economy for our businesses and people . As we move into 5G and AI we need to keep up with advances in technology. As a small country we have huge opportunities.

4. Skills and Talent update (ITEM 4) 

4.1. Barry Connolly provided an update on the Skills Group’s activities, with thanks to the team from Tesco Bank for their contribution.  The Skills Group has taken forward work since the last meeting on its 5 key priorities – the Unified Schools Programme, Regional Hubs, Apprenticeships, Strategic Forecasting and Universities.

4.2. Barry confirmed that 2019 had been a particularly good year for skills and talent with a strong culture and sense of purpose across all stakeholders.  He confirmed their focus on the delivery of the Schools Programme.  Looking ahead, he considered 2020 to be a year of challenge and ambition. 

4.3. Alastair Brannan talked about the initial delivery of the pilot and the plans to extend to further schools across the Central Belt.  However, a realistic goal of how many young adults should be offered a place needs to be set.

4.4. Scott Stewart provided a short update on the regional hubs. The intention is to take the pilot and make it scaleable with 1,000 students going through the modules. They are working with schools and colleges with support from industry.  A further update will be given in April.

4.5. It was generally accepted that participation of FiSAB members was essential, working in collaboration with Skills Development Scotland (SDS) to ensure success.  This would require the Programme to be taken from “pilot” to “embedment”. 

4.6. An industry expert panel has been created to look at skills forecasting.  The first meeting having taken place in November 2019.  The panel will look at data to determine the skills needs for the future.  The intention is to create a demand statement that will go to SDS. Identifying jobs under threat due to advances in technology will also be looked at and the FCA confirmed their willingness to help with any risk and compliance issues that may arise.   

4.7. It was agreed that there was a need for a curricula that was fit for the future.  Professor Mathieson noted that the University of Edinburgh would be looking to reform its curriculum with regard to the need for future skills.  This work will be taken forward in collaboration with Glasgow University.  

4.8. Tesco Bank is currently trialing the Flexible Workforce Development Fund (FWDF) which is proving challenging with many practical issues to overcome.  The Future Skills Scotland paper set out the issues experienced. The Financial Services sector is considered to be unique in its need of the fund.

4.9. Damien Yeats of Skills Development Scotland explained that money from the Fund was available to all organisations, including those who are not levy-payers.  He added that the Foundation Apprenticeship Programme is a good route for attracting young people into the sector and that the financial services sector was getting a “good return” on the levy having benefitted from a high proportion of Graduate Apprentices. Liz Ditchburn supported greater use of the FWDF. 

4.10. Against this background the Minister suggested that a narrative from SDS setting this out would be helpful.

4.11. Philip Grant suggested that it would be useful to look at Foundation Apprenticeships and Graduate Apprenticeships and what a good balance across industry would look like.  Barry Connolly agreed to take this forward.

Action

  • SDS to provide narrative on FWDF
  • Barry Connolly to undertake work in relation to Foundation and Graduate Apprenticeships.

5. Fintech in Scotland (ITEM 5)

5.1. The Minister congratulated FinTech Scotland on its second anniversary and for another successful year which has seen fantastic collaboration between Scotland’s innovative SMEs, universities, financial industry and the public sector.   The Minister  invited Stephen Ingledew to provide an update.

5.2. Stephen spoke about Fintech Scotland’s role in developing clusters, not just in financial services but also in other areas.  He highlighted the need to look at outcomes and identify what makes clusters successful.  Evidence shows that other sectors working in clusters are economically more successful. 

5.3. Stephen also introduced Jane Morrison Ross , the recently appointed Chief Executive of Scotland IS.  Jane spoke briefly about the creation of a framework for cluster management bringing together people to work and develop linkages.  There are huge benefits using a cluster model to grow companies internationally.

5.4. The Minister thanked Stephen for his personal contribution as Scotland’s fintech cluster has been formally recognised for its excellence by the European Secretariat for Cluster Analysis (ESCA) with a bronze accreditation.

6. AOB/conclusions and actions (ITEM 6)

6.1. Philip Grant noted that due to time constraints, the agenda item on Societal Impact would be postponed to a later meeting.

6.2. The Minister thanked all members for their attendance and contributions.  Philip Grant also thanked members and joined the Minister in congratulating the group on its achievements since the last meeting.  A date for the next FiSAB meeting would be issued as soon as possible.

Contact

Telephone: 0300 244 1200

Post:
Scottish Government
Financial Services and Fintech Policy Team
Enterprise and Innovation Division
Directorate for Economic Development
5 Atlantic Quay
150 Broomielaw
Glasgow
G2 8LU