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Scottish financial services’ hidden US giants grow larger

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Scotland is home to some hidden giants – and they’re growing larger.

No, Insider isn’t pivoting to Nessie-spotting coverage, but is looking to shine a light on one of the largest group of employers in the country; that most people probably aren’t aware of.




Crossing the Atlantic from the late 1990s, several of America’s largest financial services firms set up central belt offices that have since swollen to several thousand employees.

Recent moves have cemented their commitment to Edinburgh and Glasgow, which have become the UK’s key centres for the technology that backs up global banks and asset managers.

These include an expansion in the capital for BlackRock, the world’s largest asset manager, with $9.42trn in assets under management at the end of June.

In December 2022 the group signed a lease on new offices at Dundas House in the city centre, expanding its presence from 86,000 sq ft to 140,000 sq ft. Staff are due to move in during early 2025 and the site has the capacity to increase headcount from 900 to 1,400 over time.

This is quite the expansion from the 20 staff that set up BlackRock’s first office outside of New York in 1998, when it subsumed PNC’s asset management business, that included Castle International, based on Castle Street in Edinburgh.

The Scottish outpost also became the Europe, Middle East and Africa hub for its Aladdin technology platform and has recently been named as BlackRock’s only other artificial intelligence (AI) hub outside of the US.

Scott Walker, co-head of BlackRock’s office in Edinburgh, told Insider that growth here has mimicked the wider development of the group through acquisitions. He’s been with the business since 2007, post the Merrill Lynch Investment Management merger, to help oversee things like the integration of Norges Bank’s client business – acquired in 2017 – and serviced out of Edinburgh.

“We now have almost full front to back coverage here, from portfolio management, through operations, accounting, finance and HR, with a large and growing data and tech presence,” Walker explained.

“We’ve just started internal demolition, so works will start in November and we should be complete during the first quarter of 2025.”

Scott Walker, co-head of BlackRock’s Edinburgh office

Another big presence in Edinburgh is State Street, which also moved across the pond in 1998, as part of an acquisition of Bank of Scotland’s trustee business, with a UK depository function set up, that brought in about 40 to 50 people.

Then a big middle office deal was made, lifting out a couple of hundred people from Scottish Widow Investment Partnership, in what was one of the first middle office outsourcing deals done in the market, which further grew the Boston-based company’s Scottish footprint.

In 2003, State Street acquired Deutsche Bank’s global securities services business, bringing more custody, fund accounting and back office type work. With that deal moved Barry Muir, who is now the Edinburgh-based chief operating officer for EMEA.

At that stage, the business also moved into a 146,000 sq ft building at Crewe Toll, with about 750 people. Since then, headcount has shrunk somewhat to around 600 employees in Edinburgh, but in 2017 it moved to a 65,500 sq ft office in the then-new Quartermile development in the city centre.

Mark Napier, head of the Glasgow Technology Centre at JPMorgan Chase

On the other side of the country, JPMorgan has had a presence in Glasgow for almost 25 years, with plans announced in 2019 to build a new tech hub in the city, with capacity for more than 3,500 staff, based on the current seat numbers and hybrid working patterns.

Staff are due to move into the new space soon, and the firm currently employs 2,600 people in Scotland, claiming to be the largest tech employer and recruiter in Scotland.

Mark Napier, head of the Glasgow Technology Centre at JPMorgan Chase, commented: “Pre-Covid, the building’s key objective was to provide expanded space to facilitate our continued long term growth and bring all of our staff together into one location.

“That objective remains central, however, post-Covid the new building has taken on even more significance, in order to provide an office to allow for a hybrid working environment for a great number of employees.

“We selected Glasgow in 1999 as the site for our European technology hub and 25 years later we remain committed to the location for the very same reasons we arrived here,” said Napier. “The quality of local talent is fantastic and has only been enhanced by other financial institutions investing in Glasgow, the continued growth of this talent pool, driven by our top class Scottish universities, allows us to add new thinking and diversity to our organisation.”

Glasgow is also home to another big US bank, with Morgan Stanley also going from six people in the city in 2000, to around 2,400 working in its operations division supporting clients’ trading activity across the globe. Based in a building on Waterloo Street, which was opened in 2018, the office is home to data, technology, finance and fund services teams.

Taken from TheCityUK’s 2022 Enabling Growth Across the UK report

A 2022 report by TheCityUK showed that financial and related professional services employs around 145,000 people and contributes 9.6% to the Scottish economy; the largest area contribution outside London.

Edinburgh and Glasgow employ 48,325 and 38,200 people in the industry respectively, representing nearly 60% of all employment in the Scottish sector.

What is harder to explain is why so many firms base their tech and back office operations out of Scotland.

Barry Muir from State Street reckons that it’s an easy decision for overseas institutions, as the skill-sets are already here.

“Scotland has long been renowned for that stuff – Edinburgh, in particular, is a large financial centre, with the likes of TSB, Bank of Scotland, RBS, etc, so the talent pool is already there.

“It’s always been more the administrative type activity though – some of our competitors have won the back office and middle office activity from other Scottish asset managers, and that’s how growth has happened; via these lift-outs of staff from those functions.”

Barry Muir, chief operating officer for EMEA at State Street

While BlackRock does have a large active equity team based in Edinburgh, Scott Walker admits that the office’s strengths lie in more of the back office and tech expertise.

“The availability of talent has driven growth since day one – we’ve built strong links with universities, we’re connected with Edinburgh University and Napier to bring in interns and run programmes.

“There’s a lot of data talent coming out of these local universities, so that drives the growth agenda – the new office will mean new teams, more corporate support and Edinburgh-based legal and compliance teams for the first time.”

Mark Napier at JPMorgan Chase also hailed partnerships with local universities as being crucial to growth in these more fintech areas.

“The universities can better understand the skills needed for future graduates to be successful in our environment, which is also helped by the evolving role our Glasgow tech hub plays for the firm.

“It has emerged from a position of building technology solutions that service our operations and support functions, to now providing technology solutions that service the businesses, be that in trading, portfolio management or client facing mobile applications.”

He added that the business brings in on average 75 graduates each year on to its software engineer programme, with the new office enabling it to continue that growth.

Taken from TheCityUK’s 2022 Enabling Growth Across the UK report

Sandy Begbie, chief executive of Scottish Financial Enterprise, said that in polling the industry body undertook last year it found that 39% were ‘not that aware’ of the contribution that the financial and professional services sector makes to Scotland’s economy, while 35% said they were ‘quite aware’.

“This shows there is still work needed to convey the role of Scotland’s financial sector in fuelling the Scottish economy, the role it plays in people’s lives and the opportunities that are available to Scots in the sector.”

As for why so many overseas financial firms find it an attractive place to base themselves, Begbie reckons Scotland has three unique characteristics that are key.

“Firstly, there’s the depth, breadth and maturity of our financial services landscape – while many financial centres have one or two key sub-sectors, few can boast such long-standing experience and expertise across every sub-sector.

“Secondly, you have the strength of our workforce and the quality of our universities and colleges – this creates a strong and diverse talent pipeline and provides us with a platform for innovation in key priority areas like data, AI and green finance.”

“Thirdly, there’s the fact that we offer really good value as a place to do business – despite having a relatively low cost-base, we have accessible cities, a vibrant culture and high standards of living, making us an attractive place to live, work and invest.”

Scottish Financial Enterprise wants to keep the trend going, and recently launched the first part of a new campaign, ‘From Scotland to the World’, targeting international investors with a positive message about Scotland’s financial services industry.

“Working with our members and partners like Scottish Development International and the Department of Business and Trade, we hope to create a clearer narrative around the sector’s strengths to attract further inward investment.

“We will be launching the second phase of the campaign later this month with a digital blitz, targeting investors with tailored content like animations, graphics and case studies.”

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