What is fintech and does the answer really matter?

There’s no simple answer

At FinTech Scotland we meet lots of fintech companies, fintech professionals and fintech enthusiasts. What’s startling however is that none of them can agree on a definition of what fintech is.

It’s hard to define as fintech is an umbrella term that sits on top of many things. It is however interesting to understand what people refer to when speaking about it.

David Goodbrand from law firm Burness Paull explains: “Whilst innovative technology in the financial services industry is nothing new, the phrase Fintech is increasingly being used to describe the innovative technologies and businesses that are transforming or disrupting the way in which financial services are delivered.”

Depending on the context, Fintech can be used to describe the:

Technology ”“ the wide range of technological innovation in the financial services market including apps, blockchain, platforms, open banking and robo advice.

Businesses ”“ the businesses (start-ups and more established players) who are developing the innovative digital technologies, platforms and propositions.

Sector ”“ the banks, technology businesses and other stakeholders who are developing, implementing and using digital technology and propositions.

What’s a fintech company?

So let’s focus on the business side of things. Ray Bugg from Digit differentiates 2 types of fintech companies:

PureGen Fintech

These are organisations offering a financial service utilising technology. They embrace tech as part of their product offering.

MixedGen Fintech

These are the organisations providing technology solutions to the FS sector.

And so what?

Defining fintech is only interesting if it helps include and not exclude. This is why at FinTech Scotland we speak about the fintech eco-system. Universities, established FS brands, new start-ups, technology and service providers are all part of this community, helping innovation and disruption in financial services.

It doesn’t really matter to us whether your company or organisation qualifies as fintech, we’re interested in bringing together all those who want to form part of the fintech revolution.

FCA Innovate to visit Scottish fintechs

FCA Innovate will be visiting Glasgow on 24 October and Edinburgh on 3 November as part of their commitment to spend more time in Scotland to ensure the Scottish FinTech ecosystem has the necessary access to FCA Innovate.

The FCA Innovate initiative was launched in 2014 to encourage innovation within the financial sector.

It provides a sandbox where new concepts can be tested, regulatory support and feedback.

As part of their visits they are offering innovative firms the chance to book a drop-in session to discuss specific regulatory questions they face, which could act as a precursor to more formal support from Innovate.

If you think you could benefit from one of these sessions, please contact innovationhub@fca.org.uk

Launch of AG Elevate 2018 for Scottish fintechs

For the first time Scottish FinTech firms are actively being targeted to join the programme. The law firm already deals with a large number of fintech companies including some Scottish ones such as FNZ, Money Dashboard and MiiCard.

They propose a 12-month programme with 2 variants, one for small start-ups (< £1 million of investment) and one for bigger start-ups (at least Series A’ funding of more than £1 million). Both tracks offer mentoring services and free legal advice as well as training and networking.

David Anderson, a partner in AG’s Scottish FinTech team mentioned FinTech Scotland as evidence of a vibrant fintech eco-system in Scotland and one of the reasons that leads the firm to target Scottish fintechs.

This initiative will be manned by AG’s most experienced FinTech lawyers. AG have been winning many awards in recent years for their focus on innovation.

Some of the fintechs AG is currently working with: Delio, Pace Invoice, Penta, Moneyfellows and Mespo.

Fintechs who want to register can do so by clicking here

3 Scottish universities collaborate on fintech

In a first for Scotland and the United Kingdom, Tatja Karkkainen, is to undertake a PhD in Fintech. Her research is lead supervised by Glasgow University’s Adam Smith Business School and co-mentored by Strathclyde and Stirling Universities.

Ms Karkkainen will research distributed ledger technologies as well as smart contract solutions for the efficiency of financial markets. This will source from the fields of pure finance as well as IT. She regards the university cluster an ideal base for Fintech research for its accessible skills and resources.

The three universities provide a formidable fintech combination, providing a multi disciplinary environment for Ms Karkkainen’s Research. Glasgow University was named Scottish University of the Year in the Times and Sunday Times Good University Guide 2018. The Department of Accounting and Finance at Strathclyde Business School was ranked first in Accounting and Finance in the United Kingdom and Stirling University Computing Department is part of the Scottish Informatics and Computer Science Alliance.

The 2017 UK FinTech Census is out!

The 2017 UK FinTech Census was carried out by EY and Innovate Finance on behalf of Her Majesty’s Treasury and was designed to gather key insights directly from FinTechs, charting key areas of growth, as well as potential challenges.

Data was gathered on the specific areas of revenues, investment, talent, regulation and future expansion.

Key insights:

Revenues

– The average UK revenue of respondents grew by 22% from 2014 to 2016, and average revenues reached £5m

– 50% of companies expect global revenue growth of over 100% in the next 12 months

Investment

– In aggregate, the FinTechs we surveyed (18% of the market) expect a total of £2.5bn for their next funding round

– 33% of companies expect an IPO to be likely in the next 5 years

Talent

– Coding and software development is the most difficult skill to find when recruiting (78% of respo

ndents rank this in their top 3 skills/ experiences hardest to find)

– Product and sales are the second and third skills/ experiences most difficult to find

Future growth

– Europe and North America are the two most important regions for future expansion 964% said Europe was very important, 42% said North America)

– Attracting qualified or suitable talent is the single biggest challenge for FinTechs in 2017 (58% chose this as part of their top three challenges)your post here. You can insert images and videos by clicking on the icons above.

Download the full Census here

Blockchain breakthrough for Strathclyde Business School

Another breakthrough from the Strathclyde Business School in collaboration with the National Physical Laboratory, the Toronto Stock Exchange (TMX), and consultancy firm Z/Yen. They managed to timestamp financial stock trades with an atomic clock.

Over 20 million transactions were timestamped by The Atomic Ledger’ project during three hours of trading.

Director of the Strathclyde’s Centre for Financial Regulation and Innovation, Daniel Broby and his team will now analyse the results.

Mr Broby said: “The role of distributed ledgers and precision timing is becoming ever more relevant as Fintech companies adopt blockchain for financial transactions.
This is an exciting trial that will have real world policy impact.
It is at the cutting edge of both finance and technology, helping make money payments over the internet cheaper, faster and more efficient.”

Different processing speeds, server capabilities and execution code are today leading to orders arriving at a market place at different times.
However, current regulatory guidance implies that trades need to be recorded in microseconds (a millionth of a second).

The Atomic Ledger’ project test went beyond microseconds. The Project was able to provide nanosecond resolution.

It is believed the results will provide a benchmark to incorporate the concept of timing into financial asset price discovery.

ShareIn Targets Property Market

ShareIn , the fast growing Edinburgh-based software provider, has announced a surge of enquiries from property specialists seeking to raise capital online.

Formed in 2011 by founders Jude Cook and Andrew Pickett, ShareIn builds online investment platforms for companies using financially compliant software services. It provides the technology, expertise and regulation to link a network of investors to fund projects.

Throughout 2017, ShareIn has noted an increase in the number of new initiatives coming from property developers and investment managers, fuelled by a need to streamline existing paper driven methods and a desire to open up investments to a wider audience.

Jude Cook, CEO and Co-founder of ShareIn said:
“Property developers and investment managers have a pipeline of projects and a need to raise capital quickly and simply from established and new investors. In relying on traditional capital raising routes they fear being left behind by new technology. At the same time UK investors are looking for new investment opportunities and are comfortable investing online.
ShareIn gets them together and eliminates the challenge, cost and time associated with setting up and maintaining their own investment platform. We connect organisations with their network swiftly to raise target capital and get deals done.
Our platform handles each step in the investment process from listing opportunities to paying returns and ensures compliance with the UK regulator, The Financial Conduct Authority. Having their own platform enables property specialists to focus on the important matter of sourcing attractive deals and building their network”.

To date, ShareIn has supported a wide range of capital raising initiatives from medical, sports, utilities and energy sectors. It is the software platform of choice for many new capital raising initiatives in the UK, many of which have become Appointed Representatives of ShareIn using their regulatory umbrella services. This includes Simple Equity, which raised £1.6 million pounds in 17 minutes on their London based property crowdfunding platform in June 2017.

ShareIn is one of the founding members of the UK Crowdfunding Association and is headquartered in Edinburgh at Codebase, the UK’s largest technology incubator. It has experienced significant growth since formation now employing 12 specialists with plans to recruit further