Scotland’s First Minister Pitches Financial Service Firms

Visiting New York yesterday as part of the festivities planned for National Tartan Day, First Minister of Scotland Jack McConnell remarked, "This holiday, passed six years ago by the U.S. Senate, emphasizes the contribution Scots have made to this country, but I'd like to emphasize not just links and heritage, but what modern Scotland has to offer." McConnell's remarks came during "Business Transformation," a roundtable event held at the Forbes Galleries in New York, cosponsored by Forbes and Scottish Development International.

McConnell, who as First Minister is head of the Scottish Executive, noted that the process of devolution, whereby the Scottish Parliament was re-established after nearly 300 years of representation in the U.K Parliament, has not only created a resurgence in Scottish identity, it has also conferred independence in domestic policy making. Scotland is using that independence, he claimed, to create an environment favorable to companies that invest in Scotland, including reinforcing the country's existing financial services culture and workforce. "We continue to invest in the people skills vital for success in financial services. Our goal is to create a flexible, reliable workforce that will meet the changing needs of the financial services industry going forward," he said.

Through its subsidiaries, Citigroup (New York) has a 27-year relationship with Scotland that it looks to develop on a long-term basis, according to panelist Christopher Foskett, managing director, head of global sales and marketing, Global Bank Transaction Services, Citigroup. That long-term commitment is related to Citigroup's plan to use the location as a base for expanding European business generally, according to Foskett. But a more short-term success in the country was the company's winning of an outsourcing contract from Standard Life Investments (SLI, Edinburgh) last June to administer about £70 billion ($128.7 billion) in assets.

"We will be leveraging the SLI platform onto our standard operating system, but we won't be looking to transplant U.S. IT staff," Foskett said. "In Scotland, there's an IT labor pool and a fair amount of incubator-type tech firms that we can draw from, from a technology staffing standpoint," remarked Foskett. Of the financial services culture in general, he added, "There's a lot of intellect in Scotland, a lot of graduates in financial services and a legacy in fund management that provides the background and depth of knowledge that we need."

Business education begins early in Scotland, with an "enterprise education" curriculum at the primary and secondary levels, "where students can learn to build businesses and take risks," McConnell claimed. "It gives young people the confidence to compete on the global stage."

Panelist Lorna Jack, director, North America, Scottish Development International, noted that Scotland has developed "a skilled financial services workforce, including everything from accounting right through IT professionals." But while Scotland wants to emphasize its human capital, it also offers "location, location, location," she said. The Scottish Executive has prioritized development of transportation and technology infrastructure within Scotland, according to Jack, and the country enjoys direct air links to most European cities, as well as direct flights between New York and both Glasgow and Edinburgh.

The Bank of New York (New York) has a more recent presence in Scotland, owing to its acquisition of RBS Trust Bank from the Royal Bank of Scotland in 1999. "We've had a successful experience in Scotland and we're looking to expand it," said Joseph Melillo, senior vice president, Global Funds Services,. "This location has enabled us to draw a client base to ourselves, and strong, competitive staffing and a favorable cost environment leads us to continue to stay in this environment."

The Bank of New York has expanded its service business, resulting in much of its systems development work being done in Scotland, according to Melillo. "Technology is important in terms of our service business," he commented. "We run a software services company which requires a solid technology workforce, and Scotland provides that."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio