Financial Services Advisory Board minutes: June 2016

Record of discussion for the June 2016 meeting of the Financial Services Advisory Board (FiSAB).

Attendees and apologies


  • Rt Hon. Nicola Sturgeon MSP, First Minister (Chair)
  • Sir Ewan Brown, SFE Chair (Industry Deputy Chair)
  • Mr Brown, Cabinet Secretary for Economy, Jobs and Fair Work
  • Mr WheelHouse, Minister for Business,Innovation and Energy
  • Philip Grant, Lloyds Banking Group
  • Ian Ferguson, Aviva
  • Malcolm Buchanan, RBS
  • Barry O’Dwyer, Standard Life
  • Lena Wilson, Scottish Enterprise
  • Mary Alexander, Unite
  • Jayne-Anne Gadhia, Virgin Money
  • Angus MacPherson, Noble and Co
  • Christine O’Neill, Brodies
  • Graeme Jones, SFE

Also in attendance

  • Louise Smith, Royal Bank Scotland
  • Adrian Gillespie, Scottish Enterprise
  • Ian Hanson, Skills Development Scotland, representing FiSAB Skills Group

Scottish Government

  • Roddy MacDonald, Deputy Director, Innovation, Investment & Industries
  • Ian McCall, Head of Financial Services and SME Finance Policy


  • Barry Muir, State Street
  • Catherine Burnet,KPMG
  • Anne Richards, M&G Co Ltd
  • Jim Lindsay, FiSAB Skills Group
  • Benny Higgins, Tesco
  • Fiona McBain, Scottish Friendly
  • Mary McAllan, Scottish Government


  • Karen Rodger, Policy Lead
  • Jacqueline McKellan, Policy Executive

Items and actions

Welcome and Introductions (ITEM 1)

1.1. The First Minister welcomed members and new members, noted apologies received and introduced Mr Brown, Cabinet Secretary for Economy, Jobs and Fair Work and Mr Wheelhouse, Minister for Business, Innovation and Energy. The First Minister noted that this was Sir Ewan Brown’s last FiSAB meeting and recorded her thanks for his commitment and dedication to the board.

Chairs’ remarks (ITEM 2)

2.1. The First Minister set out the Scottish Government’s priorities noting the importance of economic performance, with a direct relationship between the health of the economy and the ability to provide essential services. Noted that employment figures showed some fragility, particularly in the oil and gas sector but recent figures are still above pre-recession levels. The recent EY report on inward investment was positive and First Minister thanked Lena Wilson, and her Scottish Enterprise (SE) colleagues for their work in this area. First Minister noted concerns that a leave vote in the forthcoming EU referendum would lead to uncertainty in the economy.

2.2. First Minister introduced Keith Brown, Cabinet Secretary for Economy, Jobs and Fair Work. He noted his intention to renew business connections and to adopt a listening role and acknowledged the challenges ahead regarding infrastructure, innovation and driving up exports, noting that Scotland has a good track record but that there is more to do. External factors including flat demand in China and continuing low oil prices continue to influence Scotland’s economic performance.

2.3. Mr Brown highlighted that there is to be an end to end review of the enterprise bodies (SE and HIE), SDS and SFC and asked board members to provide input.

Members’ comments

3.1. Board members asked for more information to be provided on the new powers resulting from the Scotland Act and the implications for taxation. First Minister explained that the process is happening in stages and that the Scottish Government will provide further information on the timescales and implications for business. ACTION – SCOTTISH GOVERNMENT to provide FiSAB members with a note on transition of powers.

3.2. Members noted that outside of Oil and Gas sector lending activity is continuing as normal, with some pressure on Food and Drink sector. The forthcoming EU referendum was creating some uncertainty, with some large transactions on hold pending the result.

3.3. Members asked about Scottish Government’s plans for consumer protection. Keith Brown responded that plans are in development and will be announced later this year. Members were keen to support this and participate in any future consultation.

Industry update from Sir Ewan Brown (ITEM 3)

4.1. Sir Ewan congratulated the FM on her new term in office and welcomed the Scottish Government’s focus on the economy and making Scotland a good place to live and do business.

4.2. Sir Ewan advised there are significant opportunities ahead for financial services and in particular fintech. SFE has established a Fintech Strategy Group, which has now had its first meeting.

4.3. Sir Ewan welcomed the review of enterprise agencies, noting in particular a need for review of how innovation is supported. He noted that there is a wide array of schemes and mechanism providing support and called for simplification of the innovation landscape.

4.4. Sir Ewan invited Graeme Jones to outline the recent work undertaken by SFE in support of the sector. Graeme informed the board that SFE has undertaken some significant new work, forming working groups on High level Strategy, Fintech and Young people.

4.5. The High Level Strategy Group will establish a 5/10 year vision for the financial services industry in Scotland. It will seek to build trusted relationships with government and its agencies and establish the conditions needed to allow the financial services sector in Scotland to prosper.

4.6. SFE have also established a group for young professionals working in Scotland’s financial services sector. The group will examine issues of importance to younger members and will provide a sounding board for policy issues in the sector.

Fintech Discussion (ITEM 4)

5.1. Graeme Jones introduced the work being undertaken by the SFE Fintech Strategy Group, led by Louise Smith of RBS. Graeme outlined that fintech represents a significant opportunity for Scotland. He called for collaboration between public and private sector to take advantage of this opportunity, noting that work needs to proceed at pace.

5.2. Graeme and Louise set out key strands of activity needed to establish Scotland as a fintech hub:

  • promotion of careers in fintech, noting the need to market financial services and fintech careers to young people as early as possible. There are already significant employment opportunities available in Scotland, but more needs to be done to connect schools, universities and colleges, and industry
  • ensuring sufficient numbers of skilled workers available to meet employer’s needs – this will require planning to ensure that students apply now for the qualifications that will be needed in four to five years. There continues to be reports of employers unable to fill posts, in particular in digital skills. Design skills will also be important to the sector and work needs to be done to market financial services careers to that group
  • establishing a fintech community or hub in Scotland that would attract further investment and allow mentoring and sharing of experience between companies
  • marketing Scotland as a centre of excellence in fintech. Fintech is a global sector and Scotland must compete directly against other centres. We will need to make sure that we are visible and that we have a strong consistent message to deliver. Hosting an international conference on fintech is one way to pursue this
  • developing good baseline data on the current state of fintech in Scotland, and its value to the Scottish economy
  • looking at the whole eco-system. We have a good infrastructure in financial services but new connections will be needed. One suggestion is to look in depth at a region in Scotland and develop the relationships and systems required


6.1. Members agreed that Scotland needs to move quickly to take advantage of new opportunities and made comments on the following:

6.2. Regulation - Members noted the need for good regulation in this area, and that start-ups will need support in establishing compliance with regulation. Larger established businesses are well placed to provide support in this area. The fintech sector is still developing and will be vulnerable to the effects of any high-profile failure in the system.

6.3. Definition – The board asked for a clear definition of fintech that will allow a consistent message to be delivered and that will help businesses, customers and those considering future employment options to understand what is happening in the sector.

6.4. Baseline data –The group agreed that there is a lack of data on the current scale of fintech in Scotland. SFE were asked to continue their work on establishing data.

6.5. Hubs – The board acknowledged Scotland’s long heritage of innovation in financial services. Scotland has a good academic base, with particular strengths in informatics. Existing technology hubs such as Codebase may provide useful facilities and expertise. There is a need for larger companies to provide support to small companies in the field and work will be required to bring people together. If established, hubs will become a useful tool in attracting business as people are drawn towards likeminded enterprises.

6.6. International – need to consider attracting new business and generating new technologies and attracting talent. Will have to consider how to market Scotland to professionals across the world and will need a consistent message.

6.7. Scale – Need to ensure we identify at an early stage companies which will grow to become companies of scale. Our definition of fintech needs to be broader than just start-ups. Other centres, including London, appear to be ahead of us in this respect.

6.8. Skills - Need to ensure that colleges and universities are ready to meet changing requirements and have the flexibility required to meet future needs. Members noted that Scottish companies are looking overseas to fill some skills needs.

6.9. Wider implications - Digital skills are required across sectors, the move to digital is not unique to financial services and many applications of big data are industry agnostic. Developing good skills in this area will be of benefit to wider economy, but finance must compete with other sectors to attract skilled workers.

6.10. Marketing - Members welcomed the idea of a global conference on fintech hosted in Scotland, to raise Scotland’s profile in this area but emphasised that we need a clear message. The conference should be seen as a mechanism, and not a goal in itself and should build on existing events and activity in the sector.

6.11. Members agreed that there is need to work at pace to develop understanding of this important area and supported SFE’s continued work through the Fintech Strategy Group.

6.12. Scottish Enterprise will continue to work closely with SFE in this area.

6.13. First Minister agreed that this is a field with great potential and that work will have to continue at pace to take advantage of the opportunities offered. First Minister noted similarities in discussions that took place in the life sciences sector on how to support development of med tech.


  • SFE to develop clear message on Scotland’s fintech sector
  • SFE to further develop baseline data
  • Standard Life to work with SFE on defining the skills gap

Members updates (ITEM 5)

7.1. Skills Investment Plan

7.1.1. Ian Hanson of Skills Development Scotland (SDS) updated members on progress on the refreshed Skills Investment Plan for financial services. Launch is planned for 2 September at Strathclyde Business School, the event may have a fintech focus. Ian noted that there is a focus on innovation, recruitment and opportunities within the sector. Work streams have been established and will also feed into the digital/ICT skills plan.

7.1.2. Members highlighted the importance of further education as well as higher education in skills development with 8 colleges across Scotland delivering foundation apprenticeships from September. HNC and HND courses also remain relevant to the sector. The Modern Apprenticeship programme, an important source of recruitment within the sector, is being expanded to include ICT and digital skills to ensure continued relevance to financial services.

7.1.3. First Minister noted the progress made and asked that the launch event takes note of the earlier discussion around promotion of fintech.

7.2. Gender Diversity

7.2.1. Jayne-Anne Gadhia outlined the work she carried out on behalf of HMT on gender balance within the financial services sector. Why financial services struggle to employ and attract senior women. She noted that financial services is far behind other industries with only 14% of woman progressing beyond middle management. Following publication of the report companies have been asked to make a pledge to improve gender balance in their organisations. Companies are able to set their own diversity targets, which will be made public, and are asked to link the achievement of these targets with performance related pay.

7.2.2. The pledge has attracted significant support from financial services companies in Scotland and across the UK. There has been significant press interest in this subject and HMT will publish a list of all signatories to the pledge later in the month.

7.2.3. The board agreed that commitment would be required to make this more than simply a target or performance score. The unions were supportive of the targets and willing to work with employers to ensure that real progress can be made.

7.2.4. First Minister welcomed the work undertaken and supported the setting of individual targets by companies. While the ultimate aim is 50/50 there are many ways to get to that level.

7.2.5. First Minister encouraged board members to sign up to the pledge, noting the Scottish Government’s commitment to gender balance for public sector boards, including FiSAB.

7.3. Insurance

7.3.1. Ian Ferguson updated members on current work to support the general insurance sector. The sector is essential to the economy and allows people and businesses to function through protecting assets and liabilities. ‘If banking is the engine of the economy then insurance is the seat belt and airbags’.

7.3.2. General insurance is under-represented in Scotland in terms of employment. Representative bodies in the sector - the Association of British Insurers (ABI), British Insurers Brokers Association (BIBA) and CIS are working together, with a consistent voice, to make Scotland the best place to buy and sell insurance. By reducing risks, insurance premiums can be lowered, freeing up money that can be used by businesses and consumers to promote growth.

7.3.3. A first strand of the work is to work with SEPA to examine flood resilience to ensure that risks can be accurately assessed and that after an incident, insured repair work leaves homes and businesses in a more resilient state.

7.3.4. Members discussed the issues raised including whether there is any evidence for an ‘insurance gap’ where vulnerable customer groups are unable to obtain the protection they require.

7.3.5. The board agreed that this is valuable work and should be supported.


8.1. The First Minister thanked members for their contributions to the discussion and thanked Sir Ewan for his support.

8.2. Sir Ewan noted the progress that has been made in the reform of FiSAB and the constructive discussion that the forum allowed.

8.3. First Minister brought the meeting to a close and advised that the next meeting would be scheduled in October to allow continuation of discussions around fintech and to discuss the implications of the forthcoming EU referendum.

FiSAB - Minutes - June 2016.doc



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