Financial Services Growth and Development Board minutes: June 2025

Attendees and apologies

• Kate Forbes MSP, Deputy First Minister and Cabinet Secretary for Economy & Gaelic 
• Sue Dawe, SFE 
• Sandy Begbie, SFE 
• Alastair Ross, ABI 
• Arleen Arnott, KPMG 
• Louisa Knox, Shepherd and Wedderburn 
• Judith Cruickshank, RBS 
• Scott Walker, BlackRock 
• Nicola Anderson, FinTech Scotland 
• Nick McGruer, FCA 
• Arlene Cairns, Phoenix Group
• George Booth, Lloyds Banking Group
• Rushad Abadan, Aberdeen Group
• Chris Rhodes, Virgin Money
• Jane Martin, Scottish Enterprise
• Al Denholm, Scottish National Investment Bank
• Jamie Grant, Barclays
• Nicola Anderson, Fintech Scotland
• Angus MacPherson, Noble Group

 

 Guests

• Sharon Macpherson, Social Investment Scotland
• David Ross, Glasgow Credit Union

 

Apologies 

• John Swinney MSP, First Minister
• Vida Rudkin, Morgan Stanley

 

Scottish Government 

• Kim Mackay
• Ben Philpott
• Conal O’Hare (virtual)
• Elaine Moir (virtual)

Items and actions

Items and actions

Sue Dawe opened the meeting, noting this session’s focus on investment and financial inclusion. She welcomed members and guests noting apologies.

 

Actions and updates from previous meetings (item 2)

Actions and updates from previous meetings:

• convene a separate group to explore options to address unbanked population in Scotland including offer of bank account to all school leavers. Scottish Financial Enterprise (SFE) to provide update at today’s meeting (agenda item 6)
• Cabinet Secretary to provide an update on public service reform work at a future meeting.  This will be covered at a future meeting of FISGAD
• Scottish Government (SG) officials to explore engagement opportunities with SFE and FISGAD members to continue dialogue and more in-depth discussions that will support DFM’s responsibilities focusing on investment.  This is ongoing and opportunities to be discussed under agenda item 3

 

Economic update (item 3)

 

GFCI (Global Financial Centres Index) benchmarking and attracting investment

Sandy Begbie provided an overview of the GFCI benchmarking exercise undertaken in the first quarter this year (2025) which compared Edinburgh and Glasgow’s performance with other global financial centres. The purpose was to identify the strengths and weaknesses of Scotland’s offer.

Scotland has a longstanding reputation and history which is difficult for competitors to replicate. Edinburgh consistently places around the top 30 and Glasgow has benefited significantly from positive investment. The paper highlighted Scotland’s strategic strengths, weaknesses and opportunities where we can focus attention to further improve our rankings.  Sandy highlighted that there is room for Scotland to improve its marketing and branding including enhancing messaging to areas such as Asia Pacific and North America and increasing engagement with overseas regulators independently of United Kingdom Government (UKG).

 

Members raised the following points:

• Dublin was highlighted as a success story having improved their rankings to 14th by focussing on international financial services with the domestic and multinational financial services sector front and centre, leveraging fintech and broader tech ecosystem as a selling point
• SFE are working with Scottish Enterprise (SE) to create a tighter branding narrative
• there is more we can do to leverage our technology and innovation centres and our connection with the energy sector
• the global economy is facing high levels of political uncertainty. The UK is currently viewed as a relatively politically stable which can be leveraged and used to our advantage
• broad recognition that Scotland has done well in attracting inward investment
• the landscape can sometimes appear disparate and not joined up and therefore a “Team Scotland” approach and SG’s work to make it easier for corporate investors to engage is positively received  
• there has been significant investment in fintech this year and the SFE Skills Hub is having a strong, positive impact on the talent pipeline
• Scotland’s sector is more diverse than other centres which can make the branding story more complicated and harder to convey. It was suggested that professional help could improve our ability to tell that story, as well as proof points, success stories and a strong focus on outcomes and outputs

Sue Dawe thanked members for their contributions and reaffirmed that the Global Investment Summit in October will be a key opportunity to showcase Scotland’s diverse portfolio and tell our story.

The Deputy First Minister (DFM) emphasised the power of data and analysis in understanding Scotland’s reputation internationally and although there are many great anecdotes and success stories, data is one of the strongest mechanisms for telling a good story.

DFM referenced the strength of Brand Scotland who are award-winning in their work, with Scotland’s tourism sector thriving, and suggested it would be helpful to look at data from Brand Scotland ahead of the investment summit. 
DFM confirmed her commitment to position the financial services sector in engagement with UK Government highlighting the need to be clear on what the messaging is to ensure consistency and alignment. DFM also emphasised a willingness to engage further on secondments and with stakeholders on investment and the importance of moving at speed to take forward the actions from previous meetings to an agreed timeline. 

Sandy Begbie noted there is a lot of pressure in the sector, particularly in asset management, but there is an opportunity to attract more front office investment jobs to Scotland.  Firms are looking at location strategies and they’re looking for areas that have things like fintech clusters and talent pipeline.  SFE recommend targeting 3 or 4 firms with a strong proposition for why they should choose Edinburgh/Glasgow to reverse the trend of them going to London.  DFM confirmed she is happy to support these conversations. 

 

Banking barometer

Judith Cruickshank provided an overview of insight and trends from the latest banking barometer:

• whilst the general outlook is improving, forecasts have downgraded
• inflation is still higher than targeted and is currently being fuelled by wage growth and food prices
• interest rates are still expected to come down but it has been slower than anticipated
• the RBS Growth Tracker showed marginal growth in Scotland for the first time in 6 months. This is a good trend, and the general business outlook continues to improve
• employment rates are high from a vacancy perspective, but people are edging out of the market

Challenges:

• there are continued cost pressures, particularly around National Insurance increases. Businesses now seeing the direct impact of those and are beginning to see an indirect impact from suppliers
• US tariff impacts are smaller than businesses have budgeted for on the whole, but there are bigger impacts from knock on impacts – these include market uncertainty, general costs, and consumer confidence
• increased cost of managing fraud and cyber threats (examples of recent M&S and Coop cyber-attacks)
• uncertainty in macro environment driving indecision
• lending is stable but there are variations across sectors

Consumer impacts:

• there has been an increase in both essential and non-essential spend. There was a spike in March, but this varies across the consumer base
• increasing investment liquidations ahead of expectation, due to US tariff impact
• mortgage market has remained resilient. Some consumers are moving to lower mortgage rates while others are rolling onto higher rates, so the market is mixed for consumers
• understanding Scotland Report (David Hume): 70% of Scots have said they are financially worse off. The cost of living remains the biggest concern
• 1/5 people cannot cover a £100 emergency without dipping into borrowing

Despite these significant challenges, the sector remains resilient. The predominant issue is confidence to invest. Corporate UK/Scotland have more balances than pre-COVID, but they are not spending them. There is an increased focus on margins and costs, and many firms have moved towards an internal focus. There is a cautious optimism for the future, but clarity on the current period and future outlooks are required. The mindset of holding deposits and reserves is replicated with consumers. In the USA consumers spent $0.94 in every dollar. The UK is holding 10%, much higher than pre-COVID. Business lending is resilient and credit card spending is growing. However businesses are concerned about defaults and agreed fall offs in discretionary spend. Any fall off is difficult for businesses due to tight margins.

DFM noted that these insights are helpful and a useful anchor to political rhetoric and is very consistent with what is being heard on the doorstep. There is increasing concern around cost of living,

Members reflected a delay in investment could lead to direct consequences on productivity. The rise of AI was raised and a question was posed around how long we can sustain our current position before we face competitive disadvantages.

Judith Cruickshank acknowledged that the artificial intelligence (AI) revolution is coming quicker than expected – both in terms of AI for efficiencies or AI for transformation of business models. There is a polarisation across the landscape around people’s willingness to adopt AI. There is also a significant fear of job loss due to AI over productivity that allows businesses to invest and do other things. Judith’s opinion was that there may not necessarily be large-scale job losses, but we will see job changes and that will be a hard and fast transition.

Investment Summit

Sandy Begbie provided an update on the progress of planning ahead of the Investment Summit and the proposed outline of the event.

Approximately 100 investors will stay in Edinburgh for 48 hours (arriving on the Sunday) to give them a feel for Scotland and showcase our soft power (golf, whisky and tourism).  Monday will offer opportunities for attendees to visit a range of innovative spaces (e.g. Edinburgh University School of Informatics, Herriot-Watt, Bio Quarter) and SFE are exploring options to take some investors up to Aberdeen to see what's happening in CCUS (carbon capture, utilisation and storage) and offshore wind. This will be followed by a drinks reception at Edinburgh Castle and a VIP dinner on the Monday evening.

Tuesday will be the Summit itself, held at Gogarburn.  It will be split into 3 sections: 

• policy: panel event with DFM and investors/firms who have already invested in Scotland to share success stories
• sector showcase: banking, life sciences, renewables (firms to be confirmed)
• investment opportunities:  connecting investors with opportunities – still in development

Sandy requested support from SG to lock down the investment opportunities section, along with information on specific investment opportunities in advance of the Investment Summit, ideally by mid-August. DFM committed SG officials to work with SFE to agree the approach to this section of the summit. 

Members supported DFM’s idea to match investors with opportunities noting that most investors will have specific areas of focus. It was agreed that this work should be taken away and discussed with Scottish Government’s Investment Unit.

Members also flagged that the Invest to  Scale Conference will also be held in Edinburgh the week before the Investment Summit and it was important to ensure join-up and that the same investor base was not being targeted.

 

Financial inclusion (item 4)

Sandy Begbie opened with a contextual steer referencing the SFE Growth Strategy for the sector and its commitment to increase the sector’s economic contribution to, and wider impact on the society in Scotland, while creating initiatives to forge greater financial participation and inclusion. SFE have been working with Scottish credit unions and mutuals and fintechs are creating further opportunities for innovation in this space

Credit Unions

David Ross (Glasgow Credit Union) provided an overview of the credit union sector in Scotland and noted a similar problem to what was previously discussed around investment – a lack of join-up in efforts:

• there are 73 credit unions in Scotland across 5 trade bodies and it is difficult to bring them together. Due to transfers and mergers it is likely the number of credit unions may contract
• work is underway within the sector to establish a united voice and for the first time there is work to establish a credit union sector group under the SFE Banking Group
• credit unions deliver £1bn in economic benefit to Scotland and David suggested we could do more to benchmark and promote the economic benefit of  credit unions
• building societies and the Association of British Credit Unions Limited are currently working alongside others to respond to a UK Government consultation which should bring together a lot of useful data
• many credit unions already work with community groups and provide links to additional support e.g. community groups and benefit calculators.  More could be done to capture what is already being done and sharing best practice to save time, money and effort
   

SFE/Financial Inclusion for Scotland (FIFS) unbanked pilot

Sandy Begbie provided an update on the unbanked pilot:

• the purpose of the pilot is to provide all school leavers with a bank account, working with secondary schools in two local authorities (Argyll and Bute and South Lanarkshire)
• Royal Bank of Scotland and Bank of Scotland confirmed as account providers for the pilot (limiting to two banks initially to avoid a competitive environment during the pilot phase)
• SFE working with FIFS and the Financial Conduct Authority (FCA) and pilot will include financial education

 

Data and insight

Sharon MacPherson introduced Financial Inclusion for Scotland (FIFS), a coalition of key stakeholders across Scotland with the shared ambition to tackle financial inclusion. FIFS published the first ever Scotland Financial Inclusion Strategy to set out ambitions around affordable credit, banking inclusion, data collaboration etc.

The last survey data highlighted banking exclusion to be sitting at around 3%, which is now down to 2%. However, this percentage increases for the unemployed, digitally excluded and those from low-income backgrounds. There are also continued issues around access to capital, and access to small funds, e.g. emergency affordable credit (small loans, e.g. £100). Credit unions and Community Development Finance Institutions (CDFIs) are estimated to serve around 10% of this largely unmet need.

The FIFS strategy proposes utilising increased funds from dormant assets to address shortfalls in the provision of financial services. Without the same strategic investment that we see in the rest of the UK through initiatives such as Fair4All Finance, the gap will not close.

Scottish Government representatives confirmed that work is in progress to determine how any expanded Dormant Assets funds can best meet the needs of the people of Scotland, in line with legislation.

Nick McGruer (FCA) noted that he was excited by the work already taking place in the financial inclusion space. He highlighted the importance of working together and made a link back to the ‘Team Scotland’ point. He took a moment to address some of the Scottish specific data from the FCA’s Financial Lives survey noting that there has been some improvement from previous surveys and there are no significant differences in any areas between Scotland and the rest of the UK.  The key challenges identified in the survey include:

• significant numbers of people who have <£1000 in savings
• 10% who have no savings
• 8% who have fallen behind on bills
• increase in those judged to have a characteristic of vulnerability and it is important to find channels to identify and serve these segments of the population
   

Members raised the following points:

• the poverty premium is a particular issue for those who are digitally excluded
• Chris Rhodes (Virgin Money) highlighted the upcoming release of their report on the financially and digitally excluded. The report identifies a statistical variation when looking at different population segments, particularly Gen Z are running at 14% financial and digital exclusion. Lack of access to smart phone data remains an exclusion characteristic. The cost of not having access increases exposure to scams, which on average can cost a few hundred pounds per scam. The cost of being financially excluded is around £600
• Alastair Ross (Association of British Insurers, ABI) highlighted the wider UK Government approach to financial inclusion. ABI is involved in His Majesty's Treasury (HMT) Financial Inclusion committee, ABI CEO Hannah Gurga is chairing the sub-committee on insurance.  The main themes the sub-committee is exploring are: economic abuse, mental health, and accessibility
• there is some great research across the insurance sector on issues such as barriers to disclosure of vulnerability characteristics. There is ongoing work across organisations including looking at the impact on potentially vulnerable customers for every insurance price change made
• there is a role for technology e.g. telematics products for motor insurance helps to create significant savings
• it is important to partner with other organisations and trusted voices to ensure messages are heard and to build trust and to reach those who are financial excluded

 

AOB (item 5)

 

Skills Summit

• Sandy Begbie gave a brief overview of the recent SFE Skills Summit. He highlighted that the topic of AI was consistently raised.  For example, if AI replaces entry-level jobs, there is a risk that will create a skills shortage for higher roles, as well as limited routes to gain entry and experience. It was felt that continued collaboration between the sector and higher education was needed to ensure that the progression pipeline is protected

 

Actions

• SG officials to work with SFE/FISGAD members to agree a timeline to identify secondment opportunities to support SG work on investment
• SG officials to work with SFE to finalise the structure of section 3 of the Investment Summit including ways to personalise engagements by matching investors with opportunities
• SFE to identify asset management firms for DFM to meet aligned to objectives of SFE’s Asset Management Strategy to attract more front office roles to Scotland and liaise with SG officials to agree next steps
• SG officials to connect Brand Scotland colleagues with SFE/FISGAD members ahead of the investment Summit