Scotland may/may not be seceding. Scotland’s banks may/may not move to London. Scotland may/may not keep the pound. Scotland’s fund management industry may/may not wither and die in a wild and cold land of its own. All of this is known and has been thoroughly debated, but what about JPMorgan and Morgan Stanley’s big Scottish offices? What will happen to them?
The thing is that while Goldman Sachs has Salt Lake City for its technology and operations staff, Morgan Stanley and JPMorgan have Glasgow.
Morgan Stanley has Glasgow especially. According to the bank itself, Glasgow is Morgan Stanley’s fifth biggest office globally and its second biggest office in Europe. Morgan Stanley has 1,200 people working across technology and operations in the Scottish city, and it has 40 jobs going there at this very moment. By comparison, JPMorgan has 800 people in Glasgow and they mostly work in technology. Glasgow is JPMorgan’s ‘European Technology Centre.’
So, what happens if Scotland becomes a separate country tomorrow? Probably nothing. However, if Scotland votes yes and terrible, terrible events ensue, it’s not inconceivable that things at U.S. banks’ Glaswegian offices could yet change. Eg.
- If Scotland ends up with a currency that isn’t the pound and that currency appreciates vs. the pound, it won’t be quite so cheap to employ all those technology and admin staff in Glasgow any more. (Conversely, if that hypothetical Scottish currency depreciates against the pound, it will be even cheaper than it is already.)
- If Scotland ends up with a currency that isn’t the pound, U.S. banks might figure they can’t be bothered with the currency risk and just relocate to Belfast where there are also quite a few banking technology professionals. (On the other hand, these are banks we’re talking about, so currency risk might not be an issue.)
- If Scotland ends up in an economic mess, all those talented Scottish technologists might decide to move away and banks’ Scottish offices won’t be able to hire them any more. (On the other hand, they might all stay in Scotland and accept banking jobs for even less money in the absence of alternatives).
Those are the bad scenarios. Alternatively, there’s always the possibility that an independent Scotland would build on its existing finance tech and operations expertise and lure more U.S. banks to build middle and back office hubs there. Off-shoring is, after all, passé, and an English-speaking nation offering generous tax breaks, a competitively priced currency, and an experienced workforce several hundred miles from London, could be banks’ near-shoring dream.