The Strategy for the Financial Services Industry in Scotland: 2009 Annual Report

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Achievements

The following section details achievements across all three strategic pillars and highlights our cross-cutting approach to innovation.

People

The People pillar of the Strategy aims to ensure that Scotland continues to have a world-class workforce to meet the needs of the globally-mobile financial services industry. This section shows how the FiSAB partnership has contributed to meeting these objectives. It also highlights achievements in the area of financial education and capability: these will contribute to developing Scotland's workforce for this sector specifically, but will also give people - especially young people - skills that they can apply elsewhere and which will help equip them for life.

Achievements: Strengthening the world-class workforce

In spite of the significant turmoil in financial markets and the resultant downturn, activity within the People pillar of the Strategy has continued to be impressive. Action by FiSIG partners to engage and collaborate fully with new organisations such as Skills Development Scotland ( SDS) has been crucial in ensuring alignment of policy and activity across all stakeholders, as has the inclusion of the Financial Services Skills Council ( FSSC) in the FiSIG partnership. In addition, FiSIG is engaged with the industry-led group set up to develop a detailed proposal for a new Skills Gateway for the financial services industry in Scotland. The Skills Gateway group comprises employers, unions, educators and others and has benefited from the previous FiSIG work to map skills delivery in Scotland. The partnership approach to strengthening Scotland's world-class workforce can be seen in work undertaken in:

Skills and labour market development

  • A joint feasibility study into recognition of the professionalism attached to the investment accounting specialism and development of an appropriate qualification was funded by SE and Scottish Investment Operations ( SIO). The study and its findings were considered by a working group whose representatives included Morgan Stanley, JP Morgan, BNP Paribas, Citigroup, HSBC and State Street Corporation. It identified evidence of demand for such a qualification and scope to develop a qualification structure with two stages in the programme SCQF level 7/8 and degree level SCQF level 9/10. The joint response from two awarding bodies - Institute of Chartered Accountants in Scotland ( ICAS) and the Chartered Institute of Bankers in Scotland ( CIOBS) is being taken forward.
  • SE and FSSC are at early planning stages in management skills development. Financial services employers have been invited to attend a meeting to identify key management competencies to be developed at the team leader/first line manager level and discuss potential solutions to address these skills gaps. Companies have been asked to complete a short survey in advance of the meeting.

Raising the appeal of the industry as a career choice and ensuring a global and diverse potential pool of employees for the industry

A wide range of events took place as part of the Global Financial Services Week in May 2008:

  • showcase of graduate careers in financial services for university staff organised by SIO at the Royal Society of Edinburgh;
  • financial services recruitment day at JobCentre Plus, Edinburgh City;
  • Fife financial services talent attraction tour hosted by HBOS and Dunfermline Building Society;
  • Glasgow financial services talent attraction tour hosted by Esure and Lloyds TSB; and
  • Aberdeen financial services talent attraction tour hosted by Aberdeen Asset Management and Bell Lawrie.

In addition, ongoing actions have taken place:

  • SIO is leading on the Further Education Partnership ( FEP) project to raise awareness in schools across Scotland of financial careers in partnership with CIOBS, Chartered Insurance Institute ( CII), FSSC, Securities and Investment Institute ( SII) and Scottish Qualifications Authority ( SQA) to educate young people on the long-term career opportunities within financial services. This year, 279 workshops have been delivered reaching around 8,370 pupils. Additional contribution to this work has been provided by SE, SDS and Scottish Financial Enterprise ( SFE).
  • Fresh Talent case studies of individuals working in financial services can be found on the scotlandistheplace website. These showcase the successes of individuals and the opportunities available to them.
  • The Talent Scotland website is continually updated to accurately highlight opportunities to work in the financial services industry in Scotland.
  • Seven Stock Market Challenge events have taken place around the country, engaging hundreds of secondary school pupils in a very popular and worthwhile simulation exercise.
  • The FSSC launched Directions - its on-line careers service for financial services and accountancy at Baillie Gifford in March 2009 to over 60 careers advisers, teachers, industry and professional bodies as well as key stakeholders.
  • FiSIG decided to refocus the work of the Gender Pay Gap delivery group to ensure that availability of access to a career in financial services provides the industry with the widest possible pool of talent. Terms of Reference are being reworked for FiSIG approval and a new group with the working title Access Talent will take this forward.

Financial Services Skills Gateway

In May 2008, during the Global Financial Services Week, the First Minister announced the SG's support for plans to develop a detailed proposal for a new Skills Gateway for the financial services industry in Scotland. The First Minister invited David Thorburn, Executive Director of Clydesdale Bank plc, to form and lead an industry group comprising employers, unions, educators and others to develop the proposal. It is planned that the Skills Gateway will:

  • articulate clearly the industry's skills requirements;
  • improve the understanding of the career pathways available in financial services;
  • increase the flow of school leavers, graduates and adult returners into the industry by creating a talent "pipeline" that is predictable and manageable;
  • develop workforce capability at all levels; and
  • facilitate collaboration between all stakeholders involved in education, training and skills development for the Scottish financial services industry.

The proposal is now being developed through three work streams: the FSSC is co-ordinating a project to improve labour market intelligence on the industry's changing skills needs; SDS is exploring options for improving and extending advice on careers in financial services to ensure that it meets the needs of employers and supports recruitment; and professional bodies are considering how workforce capability can be improved, including considering the impact of recent developments within the industry on continuing professional development.

Ensuring workforce development activities deliver skills for the future:

Activities this year demonstrate that a significant amount of work has been undertaken including:

  • The Association of Chartered Certified Accountants ( ACCA) exam results reveal that 3,994 students in Scotland have taken ACCA examinations this year.
  • Financial services employees studying for CIOBS qualifications included 218 enrolments for Certificate level qualifications; 1,177 for the Chartered Banker level; 264 for Diploma level and 417 for regulatory qualifications.
  • Over 1,300 students across Scotland studying for the ICAS qualification leading to Chartered status. The Institute also delivers the qualification in England, Wales, the Channel Islands and Luxembourg.
  • 15 candidates at James Watt College and RBS Mortgage Centre in Greenock have completed the National Progression Award ( NPA) financial services SCQF Level 6.
  • 54 candidates have completed Skills for Work ( SfW) financial services course SCQF Level 5 with a further 89 candidates currently taking the course.
  • 70 people across Scotland are currently working towards achieving SVQ in accounting at Level 2 while 13 have recently started the SVQ in providing financial services at Level 3.
  • Almost 3,800 exams have been taken at public centres in Scotland for CII qualifications leading to Chartered status for brokers, insurers, financial planners and insurance practitioners.
  • In addition, CII has continued to reach out to deliver across Scotland with 50 local institute CPD events aimed at insurance and financial services professionals; opening of the Study and Reference Centre within the Mitchell Library in Glasgow - a centre of excellence for professionals across Scotland; delivery of the Broker Access programme and development of the Face-to-Face training programme within the Mitchell Library.

Delivering financial education in schools and beyond

The increasing significance of financial education is reflected in the volume of activity in schools and with teachers, including:

  • Cambussbarron Primary School in Stirling delivered a Scottish Centre for Financial Education ( SCFE) Money Week as part of the Global Financial Services Week events and hosted a visit by Maureen Watt MSP, then Minister for Schools and Skills.
  • Also as part of the Global Financial Services Week events, Clydebank High School students engaged in a Stock Market Challenge event which was observed by Fiona Hyslop MSP, Cabinet Secretary for Education and Lifelong Learning.
  • SCFE delivered two seminars in the context of the Curriculum for Excellence at the Scottish Learning Festival in September 2008.
  • SCFE was also involved in delivering two dramatisations using resources for learning and teaching - On the Money and Small Change. On the Money has been produced in partnership with Standard Life and Scottish Book Trust. Small Change is supported by the Clydesdale Bank and produced in partnership by TAB Theatre Company based at the Citizens Theatre, Glasgow; Glasgow City Council; Bannerman High School and SCFE.
  • On 11 November, SCFE in partnership with Standard Life and Scottish Book Trust launched Leis an Airheid (Gaelic version of On the Money). This is an important development in that SCFE is now in the process of translating and adapting other resources for use by the Gaelic community.
  • On 4 November, SCFE delivered its sixth annual conference at Murrayfield Stadium, Edinburgh which was sponsored by Prudential and attended by over 170 delegates. The conference was followed by a reception in the Scottish Parliament in recognition of the support by the financial services industry for the development of financial capability in Scotland and was attended by conference delegates and representatives from the financial services industry.
  • Seven CPD events were held across Scotland in November for over 200 primary school teachers with a further seven events in March 2009.
  • SCFE has also run a small-scale pilot with Initial Teacher Training establishments. The events involved have been very well received and further development of this activity is now being considered.

Making Financial Education for All a reality

On 4 December 2008 SCFE, part of Learning and Teaching Scotland, held its sixth annual conference in Edinburgh to celebrate the excellent work in delivering financial education in schools across Scotland. An important part of SCFE's remit is to support teachers by improving the competence and confidence in dealing with financial and economic issues in the classroom. Ongoing support for teachers also comes from newsletters, learning and teaching resources and a programme of seminars and workshops delivered in partnership with Clydesdale Bank, Standard Life and RBS.

John Mulgrew, Chair of Learning and Teaching Scotland, addresses the sixth annual SCFE conference.

John Mulgrew, Chair of Learning and Teaching Scotland, addresses the sixth annual SCFE conference.

Informed and confident customers

The partnership approach to financial education beyond school age is also contributing to work taking place throughout Scotland:

  • CIOBS manages the FEP, which is funded by Airdrie Savings Bank, Clydesdale Bank, Dunfermline Building Society, Lloyds Banking Group, RBS and Standard Life. The following professional bodies have also recently joined the FEP: CII; FSSC; SII; SIO and SQA. Employees from the member organisations undertook over 800 visits to 28,500 individuals, covering 10 subject areas relating to personal financial capability and employability skills. The workshops are adapted to suit a range of age groups from primary and secondary pupils through to adult groups.
  • The Financial Services Authority ( FSA) financial capability work includes:
  • Further Education - The Money for Life CD is being used as a starting point for financial capability work with students in colleges across Scotland. FSA is funding the Scottish Further Education Unit ( SFEU) to offer opportunities to staff for financial capability in academic year 2008-09.
  • Higher Education - Money Doctors works in partnership with Student Money Advisers in universities to provide proactive education and support to develop students' financial skills. Money Doctors provides training and resources to the Student Money Advisers to help them take a structured approach to engaging students actively on the subject of money before they get into difficulties.
  • Young People - More Choices, More Chances in Scotland - Young People and Money is a free one-day training programme devised by Fairbridge and Citizens Advice to help youth professionals help young people make sense of money. It is delivered in Scotland by A4e.
  • Workplace - Through the Making the most of your money education programme the FSA has worked in Scotland with around 89 organisations, reaching 245,500 employees with material and 5,400 employees attending presentations.
  • Families - Parents Guide to Money was officially launched by the Scottish Government in January 2009 with an event hosted by Renfrewshire Council in Paisley. The guides have been with all Scottish midwives since November 2008 and will be distributed to all expectant parents around the 21-week scan appointment.
  • Social Housing - part funding a Financial Inclusion Advisor for the Chartered Institute of Housing. This advisor provides support, guidance and information to senior staff in social housing providers.

Support for young Scots

youngscot logoThe SG's support for Young Scot, the national youth information charity, has been another successful partnership. This work has a specific focus on helping young people aged 16+, especially those who are at risk of poorer outcomes, to become more financially capable. Young Scot has established a national information service for financial capability for young people, with specialist provision including a freephone telephone InfoLine, extensive web content and engagement activity. In addition, this year also saw the introduction of LaunchPad a new interactive microsite aimed at school leavers with video content produced by young people, and there are further plans for extensive digital development, including video diaries and social networking applications.

Since late 2008, Lloyds TSB Scotland has been working with Young Scot to develop podcasts on topics such as Mortgages, How to choose a bank, and How can a bank help me manage my finances? This work follows on from discussions with a group from the Financial Advisory Board for Youth around the financial issues affecting young people today.

Supporting innovation by bringing industry thinkers and experts together

  • SFE organised a series of events with politicians, industry leaders and companies from the UK and overseas throughout the year and also held a conference on Islamic Finance.
  • SFE and the Scottish Council Foundation held a policy roundtable in November following a briefing by Otto Thoresen who chaired HM Treasury's Review of Generic Financial Advice. The event also built on the FiSIG-delivered financial capability mapping exercise. Key findings from the roundtable were that there is a lot of activity and some wheel reinventing going on; and the role of the "trusted intermediary", i.e. someone already in a position of trust for other reasons, like a midwife, should be explored further. Times of change or transition should be the focus for additional effort.

Profile

The Profile pillar of the Strategy aims to ensure that Scotland's excellence and competitive advantage as a location for financial services is recognised internationally and at home.

Achievements: Global and local profile

Within a high level of activity in the last year one of the most significant events was the Global Financial Services Week - a series of events which took place during the last week in May at locations across Scotland consisting of both business and educational events. These included the launch of the Strategy 2008 Annual Report, the inaugural Global Financial Services Conference and culminated in an evening reception in Edinburgh Castle, hosted by the First Minister.

Delivering the Strategy Communications Plan:

  • SE started the process of strengthening Scotland's competitive position through the development of compelling propositions across financial services sectors (beginning with Fund Management and Asset Servicing at the end of March 2009) to assist company growth, internationalisation and attraction and retention of high value jobs via inward investment.
  • A review of the Global Financial Services Week was undertaken and reported on by the Steering Committee for the Global Financial Services Week. The report was fully considered by FiSAB and SFE has been tasked with taking work forward in relation to future events.
  • A full review of employment statistics used in the Strategy reporting was undertaken and discussed by FiSIG with agreement that the Annual Business Inquiry ( ABI) should continue to be used as the main source of employment statistics but that these should be contextualised by use of other data, e.g. business surveys.
  • SG officials worked closely with the Office for National Statistics ( ONS) to ensure that the underlying information used to produce statistics on employment levels in the financial services industry were comprehensive. As a result, ONS has made a slight change to source data used for this statistic and the published figure for employment in financial services in Scotland in 2006 has been retrospectively revised upwards.
  • Due to the global financial environment, work with the Fraser of Allander Institute to update our assessment of the industry, including its contribution to GDP, is taking longer than expected. It is now due to report later in 2009.

The First Minister addresses guests at Edinburgh Castle Reception during the Global Financial Services Week.

The First Minister addresses guests at Edinburgh Castle Reception during the Global Financial Services Week.

Continue to engage and influence regulators and policy makers, including HM Treasury, the FSA and the EU, by utilising the co-ordinated Scottish Voice of the public sector, the private sector and trade unions

  • Full engagement has continued with UK Trade & Investment ( UKTI) via SFE membership of the Financial Services Sector Advisory Board ( FSSAB) and Scottish Development International ( SDI) membership of the UKTI Regional Forum.
  • SFE reception at Dover House, London in May 2008 as part of the Global Financial Services Week involving MPs and other London-based officials with stakeholders.
  • SFE arranged high-level discussions between its leading members, and briefings for a broad range of member companies, with the Rt Hon Alistair Darling MP, Chancellor of the Exchequer; Mervyn King, Governor of the Bank of England; Hector Sants, Chief Executive of the FSA; Lord Myners CBE, Financial Services Secretary, HM Treasury; Lord Levene, Chair of Lloyds; and the Rt Hon the Lord Mayor of the City of London, Alderman Ian Luder.
  • The First Minister hosted a meeting with the Rt Hon the Lord Mayor of the City of London, Alderman Ian Luder on 6 March 2009 to discuss closer working between Scotland and the City in promoting the financial services industry.
  • FiSAB agreed to invite representatives of the Bank of England and the FSA to FiSAB meetings, so that alongside current representation from HM Treasury, all three members of the UK Tripartite Authorities can participate when appropriate.

The First Minister, the Rt Hon Alex Salmond MP MSP, held his first meeting with the Rt Hon the Lord Mayor of the City of London, Alderman Ian Luder in March 2009.

The First Minister, the Rt Hon Alex Salmond MPMSP, held his first meeting with the Rt Hon the Lord Mayor of the City of London, Alderman Ian Luder in March 2009. The meeting was the first in a series that will see the First Minister meet with senior figures in the financial services industry internationally, including Shanghai and Hong Kong, and is part of the SG's efforts to promote Scotland's financial services industry and attract new investors.

Raising Scotland's international profile as a leading financial services location:

  • In September 2008, SDI participated in the Asia Pacific Globalscot event in Hong Kong, taking the opportunity to present and share Scotland's financial services proposition with key Globalscots in the region.
  • SDI sponsored the fifth International Finance Forum in Shanghai with three Scottish fund managers: Aberdeen Asset Management, Baillie Gifford, and Standard Life Investments, speaking along with John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth and Owen Kelly, Chief Executive of SFE. This was followed by a series of meetings with key companies and government regulators for the fund managers in both Shanghai and Beijing, including evening receptions in both cities.
  • SDI, in partnership with UK Trade & Investment ( UKTI), welcomed a group of Chinese journalists to Scotland as part of a UK-wide tour in November 2008. Interviews with some financial services companies including Baillie Gifford, Standard Life Investment, and Martin Currie took place.
  • Owen Kelly took part in a programme of visits in China with the Rt Hon Jim Murphy MP, Secretary of State for Scotland as part of an SCDI trade mission to promote business in Scotland and in February 2009, he took part in roundtable discussions between Scottish and Swiss fund managers and the Swiss Consul General in Geneva.

John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth addresses the fifth International Finance Forum in Shanghai.

John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth addresses the fifth International Finance Forum in Shanghai.

Rapid growth fuels 500 job expansion in Glasgow

In February 2009, the First Minister welcomed an announcement by Peter Wood CBE, Chairman and CEO of Esure Holdings Ltd of the creation of up to 500 jobs within Glasgow's International Financial Services District over the next five years.

Esure is an internet- and telephone-based insurance company and is now one of the largest providers of motor insurance in the UK also offering home, pet and travel insurance, as well as personal loans.

Peter Wood commented:

"During 2008, we grew very rapidly and at the end of last year we had two choices: stem growth… or staff up and go for growth. In these terrible economic times, I'm absolutely delighted to be able to make a commitment to Scotland and to Glasgow. The combination of excellent people, superb infrastructure and a can-do ethic makes this a perfect place to do business and I cannot understand why anyone with telephone and internet-centred businesses would choose anywhere else."

The Innovators 2008

SECOND WIN IN A ROW FOR AEGONUK AT SCOTLAND'S FINANCIAL SERVICES INDUSTRY AWARDS

AEGONUK has won Scotland's Innovators 2008 awards - a SFE initiative in association with Ernst & Young - for the best new innovation from Scotland's financial services industry.

In the first time that a company has taken the top award two years in a row AEGONUK won the 2008 overall innovation for its "Flexible Adviser Remuneration" - a new way of helping more customers get access to professional retirement advice. Standard Life received a special award for its "Step Up in Life" programme which helps prepare people for work.

AEGON UK winners of The Innovators 2008.

AEGONUK winners of The Innovators 2008.

Infrastructure

Scotland's competitive advantage in financial services depends not just on the world-class workforce or on the expertise of firms directly engaged in the industry. It also rests on having an excellent infrastructure to support those people and those firms. That infrastructure includes the physical transport system; the virtual/electronic communications system; and a network of supplier firms in sectors such as IT, accountancy and the law. This pillar of the Strategy aims to ensure that Scotland's already excellent infrastructure remains ahead of the curve in the digital age.

Achievements: Improving the business infrastructure

By the very nature of infrastructure projects, delivery of actions is more likely to be in the medium to longer term. A significant output from the FiSIG scenario planning exercise has been the decision to reprioritise the Infrastructure pillar to ensure proper focus on the regulatory matters which will undoubtedly flow from current considerations of the causes of the current global financial crisis. In addition, SFE is updating its members' views on transport issues. The Industry and University Collaboration delivery group's work continues to be important but the fast-changing environment we have experienced over the last six months means that we need to relook at the proposal. This needs to look at how best to ensure this delivers what industry now needs. Other achievements have included:

Continue to address industry priorities within emerging transport policy and seek to improve transport and communication connectivity across and between Scotland's cities and with global markets

Connectivity:

  • Scotland recently witnessed a number of wi-fi transport deals - bus operators Citylink and Arriva now offer free wi-fi on key routes such as the Glasgow Airport shuttle and the Glasgow-Edinburgh journey. SPT also struck a UK-first deal to provide a cellular network across the 15 Glasgow subway stations. The network went live in December 2008 and covers all users on the O 2 network.

Transport:

  • Work on the Glasgow Airport Rail Link project is well underway, including phase two of the overhead line electrification works on the main line. Once complete, the rail link will provide a dedicated service every 15 minutes between Glasgow Central and Glasgow Airport stopping at Paisley Gilmour Street Station. This project will encourage people travelling to the airport to switch from private cars to rail passenger services and is a key infrastructure project for the 2014 Commonwealth Games.
  • The Edinburgh to Glasgow Improvements Programme will upgrade central Scotland's transport links through the delivery of improved rail connections between Edinburgh and Glasgow providing faster services running more frequently with increased capacity. This project will increase the number of rail services running between Edinburgh and Glasgow on the Shotts line, the Carstairs line and the core Edinburgh to Glasgow line (via Falkirk High).
  • The location for the new Gogar Station situated on the Fife railway line to the north of the A8 Gyle roundabout was announced by Scottish Ministers in December 2008 as part of the Strategic Transport Projects Review. This facility will provide a much-needed improvement in public transport access to Edinburgh Airport and the surrounding areas. It is planned that the station will be completed in time for the opening of the Edinburgh tram network in 2011. Transport Scotland is working closely with the tram project team and the City of Edinburgh Council to produce the best possible link for passengers between the railway and the tram networks to provide an easy and effective interchange for passengers.

The Forth Replacement Crossing

Despite significant investment and maintenance over its lifetime, the Forth Road Bridge is showing signs of deterioration and is not suitable as the long-term main crossing of the Firth of Forth. However, extensive studies have indicated that the Forth Road Bridge may be deteriorating less rapidly than previously thought and Transport Scotland has developed a strategy for the Forth Replacement Crossing which retains the existing bridge for use as a dedicated public transport corridor. General traffic, including heavy goods vehicles, will use the Forth Replacement Crossing.

By making use of existing infrastructure, a more slender design for the replacement bridge is proposed. The use of state-of-the-art traffic management technology also means that less road development is required. This strategy results in less environmental impact and significantly less cost. The Forth Replacement Crossing is designed to be an elegant, unique and instantly recognisable cable-stayed bridge that complements the existing road and rail crossings and will be counted among the world's leading bridges when it is built.

The procurement process for the construction contract will formally begin when the Contract Notice is published in June. In parallel with the introduction of the Bill to Parliament, selected bidders will be invited to tender in November. The contract is anticipated to be awarded in April 2011 and to see construction underway later that year. This project will provide a major boost for the Scottish economy and will create opportunities for employment and businesses over an extended period.

We look forward to the delivery of another Scottish engineering icon in 2016 which will sit alongside the landmark structures of the last two centuries crossing the Forth Estuary.

Artist's impression of the new Forth Replacement Crossing.

Artist's impression of the new Forth Replacement Crossing.

Strengthen the Scottish supplier community

SE led the management and delivery of a supplier development event held in November 2008 which introduced 17 technology supply companies to nine large financial services companies seeking new technology solutions. The evaluations from participants were extremely positive with five of the companies having already had further meetings with a range of companies and as a result of the event, three Scottish technology supplies have secured business with participating financial services companies worth between £30,000 and £40,000. Several other technology suppliers have indicated that they are in "sales relationships" and are hopeful of converting these encouraging opportunities into contracts.

A formal evaluation will be undertaken and results from this will inform future events and how this initiative can be widened to encompass, for example, better understanding of procurement processes and how to increase the level of innovation within the Scottish supply chain.

Participants at the supplier development event organised by SE.

Participants at the supplier development event organised by SE.