There were eight financial services FDI projects secured in Scotland last year, creating an estimated total of 2,911 jobs - more than three times the employment number for London (estimated to be 806) and more than half the UK total (estimated to be 4,443).

At a city level, Glasgow was the second most attractive city in the UK for financial services FDI in 2019, having secured more than three times the number of projects than Edinburgh.

At the UK level, Scotland was the second most attractive location for financial services FDI in 2019 for the seventh consecutive year, with its share of all financial services FDI into the UK increasing from 6.3% in 2018 to 8.1% in 2019. The sector’s contribution to Scotland’s overall FDI figures also increased from 7.4% in 2018 to 7.9% last year.

Sue Dawe, EY’s head of financial services in Scotland, said: “In a year where both Europe and the UK experienced a fall in their numbers of financial services foreign investment projects, it is positive to see Scotland demonstrating relative resilience and bucking the trend with an increase in project numbers.”

The 2019 figures were above the annual average for the last decade (2010 – 2020), with Scotland’s share of UK financial services FDI averaging 7.5% while the sector’s share of all FDI into Scotland averaged 6.4%.

Scotland was the second most attractive destination in the UK for financial services FDI while London topped the list with 67 projects (68% of the UK total). Yorkshire & Humber moved up into third place with six recorded projects (double its 2018 total), while the North West recorded a decline in projects for the second year running and was ranked fourth.

Ms Dawe added: “Across all sectors, Scotland is an attractive proposition for foreign investors, as demonstrated by the increase in the total number of FDI projects in 2019. This legacy of appeal and strong performance offers confidence in Scotland’s ability to continue to secure healthy numbers of FDI as we emerge from COVID-19.

“As the economy shifts to become increasingly digital, sustainable and inclusive, the financial services sector must continue to innovate and evolve in order to remain at the forefront of change and hold its position as an international leader.”

Overall, the UK continues to be Europe’s most attractive location for international investment into financial services, with 99 projects recorded in 2019. While UK project numbers were down 11.6% from the year before (a drop of 13 projects), financial services FDI across the whole of Europe fell by 12.6% from 2018, when Europe saw a record number of financial services FDI projects driven by firms opening new offices or restructuring in preparation for Brexit.

The UK has consistently been the number one location for financial services FDI for the last twenty years, and 2019 was the third strongest year in the past decade for the sector. The UK registered more than double the projects of Germany, which came in second place with 43.

Looking ahead, as markets across the globe deal with the impact of COVID-19, investor sentiment suggests that the UK is expected to continue outperforming the rest of Europe in attracting post-pandemic financial services investment. Although sentiment is mixed, forty per cent of investors believe the UK will be more attractive for financial services FDI post COVID-19, compared to just 8% who believe Europe as a whole will be more attractive after the crisis.

Ms Dawe concluded: “The COVID-19 crisis will of course impact all geographies and economies – to a lesser or greater degree – and no industry is immune. However, as an internationally renowned centre for financial services, Scotland’s finance sector is well placed to support the recovery effort and drive growth. While it’s unclear at this early stage how future projects will be impacted by the pandemic, investor sentiment from April this year suggests financial services is in a strong position to adapt to the changes and continue to be a leading destination for overseas investment.”