An end of year “Thank You” message from our CEO

As we come to the end of 2021 and look forward to 2022, we’re reflecting on the year and are hugely proud of what’s been happening across Scotland’s FinTech Cluster. Despite the continuing challenges from the COVID-19 pandemic we’ve seen fintech SME Growth, both in number of businesses and in terms of scale, we’ve seen record levels of investment in Scottish fintech SME’s, a true testament to the calibre of the businesses and leaders who continue to inspire us day on day.

The past twelve months have also seen more international growth with up to 50% of Scotland’s fintech SME’s building plans for international trade and more global businesses locating to Scotland as they establish a UK base.

We’ve also had the Kalifa review of UK fintech acknowledge the established progress of Scotland’s FinTech Cluster, and we’re looking forward to supporting the implementation of the Scottish Technology Ecosystem Review led by Mark Logan and building a plan to enable Scotland’s future digital economy.

The FinTech Scotland festival provided us all with an opportunity to meet again face to face and if we needed it, it reinforced the energy, optimism, diversity of contribution and breadth of collaboration that contribute to our fintech successes. A highlight for all of us in the FinTech Scotland team were the hybrid and in person events, kicking off with the DIGIT FinTech summit and ending with the Times and Futurescot event where we welcomed the UK regional fintech clusters to Scotland in the Accelerating UK FinTech conference.

During 2021 we have seen a growth in climate fintech, with new fintech SME’s starting to develop businesses to help address the impact of climate change and support the journey to net-zero, as well as established fintech SME’s expanding their existing capabilities to tackle this important issue. I have no doubt we’ll see more of this in 2022 and we’re looking forward to doing more to stimulate and accelerate climate fintech in Scotland.

With the establishment of the Scotland fintech SME advisory Board we have a clear plan on fintech SME priorities for 2022, and it is a privilege to work with these dedicated leaders who have come together aligned behind the vision of economic, social, and sustainable growth across the FinTech Scotland Cluster.

Looking forward to 2022 we’re focused on supporting fintech SME’s to scale and grow, strengthening international connections, building more impactful fintech collaborations and deliberately driving more fintech Research and Innovation (R&I) in Scotland and across the UK. We plan to launch the FinTech Scotland R&I roadmap early in 2022. It’s a plan that pulls together industry R&I priorities as we ask ourselves, what should finance look like in 10 years-time, and it provides us with a framework to lead the answers to that important question.

In drawing to a close, I’d like to say thank you to everyone that’s supported the FinTech Scotland Cluster across 2021. I’m continually reminded of the privilege it is, to know you and work with you in our collective efforts to lead and achieve our ambitions for fintech in Scotland. I’d also like to say a special word of thanks to the brilliant team at FinTech Scotland. I see their energy, commitment and drive everyday and it’s a pleasure to work them.

My final note is to wish you all a happy and healthy 2022 and we’ll look forward to seeing you all next year as we continue to build on our plans and drive the FinTech Scotland Cluster.

82% of 50s market would not take robo-adviser financial advice

New research from Visible Capital on the over 50s market shows that 82% would not take financial advice from a robo-adviser and 88% would not be willing to give details of their finances to a robo-adviser to enable them to give a better personalised service.

The results come from new research carried out amongst UK adults with an age range from 50 upwards, with the bulk of the respondents aged 60 to 80. 38% said they currently access financial advice through an adviser or accountant.

This aversion to pure digital advice was amongst a cohort of whom over 60% said they had been relying on technology more during the pandemic period and are comfortable with technology and have clearly adapted well to navigating the huge range of interactions and services which have gone online during COVID19.

Among the group, 84% were using online services for general banking, 52% for insurance, 44% savings and investments, 64% for payments and transfers and their 55% were managing their credit cards digitally. Yet only 15% of respondents used online services for advice.

A fifth (20%) of respondents said they trusted technology less coming out of the pandemic; perhaps some of their digital encounters have been frustrating and only borne of necessity.

Ross Laurie, CEO Visible Capital, comments:

“This should be interesting reading for financial advisers being a wealth cohort of which 64% said they felt reasonably well off’, which for the majority of advice firms will sit squarely within their core client group.

The results of our survey show that age 50+ savers and investors are no strangers to using digital services, which has been accelerated by the pandemic and is likely to grow in the post pandemic world. But, as yet, they have not taken advantage of online financial advice. Our survey results show that trust is a major factor here. Utilising the tools and services with which this group are already familiar ”“ online banking, investing, saving, etc, ”“ advice firms can offer this day-to-day technology with the kind of personal, trusted human advice which many of them already value.

Advisers have a real opportunity to step into the hybrid advice space and claim it as their own.”

Scotland Fintech festival! We loved it and can’t wait for next year!

We recently concluded the FinTech Scotland festival ending a wonderful four weeks where we got to celebrate fintech innovation in Scotland, across the UK and around the world!

With 60 events covering a broad range of interesting topics, discussions, and views for the future there was plenty to talk about and more to excite us for the next 12 months ahead.

We started in Edinburgh and ended in Glasgow taking a trip around the world via Australia, America, Europe, Dundee, Stirling and London!

Among my favourites were the face to face events, where the buzz and energy in the room confirmed there’s much going on in FinTech innovation in Scotland, and that we all were excited to be out and about reconnecting face to face, enjoying new conversations and sparking new ideas.

Digit’s FinTech Summit kicked everything off in true Digit style. It was great to see Visible Capital, LendingCrowd, Amiqus, Sustainably, ShareIn, Zumo, Nude, Exizent and Love Electric, all Scottish home grown fintech talents, building and scaling businesses, and developing the future of finance.

Other one of my favourite events was a truly brilliant and informative discussion on the meeting of Space Data and FinTech! Thank you, the University of Strathclyde, Trade in Space, Go-to-Market for sharing your insights, experience and expertise on how Space Data gives us an exciting prospect for more fintech innovation!

FinTech innovators never fail to inspire me, it was an privilege to share an event that saw Know-it, Doqit, Biscuit Tin, PolyDigi and Gigged.ai talk about their businesses, innovations and aspirations for the future.

We connected around the world, sharing experiences of Open Banking innovation with FinTech Australia and hearing directly from a range of European regulators on their experiences of fintech.

Our own regulator the FCA hosted a record number of events covering topics from crypto, Innovation, Sustainable finance and RegTech!

We rounded the festival off in Glasgow with the Times Scotland and Canongate event and an opportunity to discuss accelerating fintech across the UK! Another event that reminded me of the value of connection, the true potential for UK fintech innovation and role that Scotland plays in influencing that story and setting direction.

Thank you for joining us, being part of our story and helping us to shape the future.

The evolution of high-growth tech firms in Scotland

By Lynsey Walker, dispute resolution partner and tech specialist at Addleshaw Goddard

Technology and digital innovation have played an important role throughout the pandemic, which rapidly accelerated a global reliance on connected services.

Digital innovation has protected many businesses which, despite traditionally not being online operators, have been able to pivot through a technology-first approach, providing business continuity which previously would have been an expensive challenge.

As the wider economy opened as Scotland was moved to level 0, our continued ability to work from home while also remaining connected with friends, family and social groups underlines how vital technology and digital innovation is to the country’s economic recovery. It is clear that the loosening of restrictions is not going to result in a return to all of our pre-pandemic practices.

Central to this is the understanding that tech underpins all sectors, from education to manufacturing, rather than a standalone stream supplying businesses with IT or other more traditional machines.

In recognition of this, the Scottish Government has made more funding available to help businesses take advantage of digital technologies to improve their productivity, increase their resilience and create new market opportunities. An additional £11.8 million, announced in November 2020, will go towards helping businesses to adopt digital technologies and improve their digital capabilities.

Looking at the fintech sector specifically, Scotland already boasts one of Europe’s most successful offerings and is projected for notable growth in the years ahead. Innovators are looking to the future and are driving a collaborative agenda in a bid to make impactful change across the sector and for consumers alike.

The launch of the Kalifa Review earlier this year marked a significant milestone for the UK fintech sector, as it set out a strategy that will accelerate growth over the next three years – again enabling post-pandemic recovery.

Deservingly, Scotland was earmarked as a standout region thanks to the continued development of its Fintech Scotland Cluster model. With input from Fintech Scotland, the Kalifa Review sets out a five-point plan to leverage innovation through a positive regulatory environment, developing diverse skills, facilitating investment to scale enterprises and accelerating a targeted approach to inward investment. It will be fascinating to see how we gather momentum in enabling this through investment, innovation and job creation.

Just last week, UK Government ministers were given an exclusive glimpse into the evolving Scottish fintech community as part of an event hosted by FinTech Scotland. Secretary of State for Trade, Liz Truss, and Scotland Secretary, Alister Jack, paid a visit to the Bayes Centre to meet some of the companies driving the thriving fintech ecosystem.

Over the last five years, Addleshaw Goddard has developed its AG Elevate programme, designed to accelerate start-ups and guide fast-growing tech firms through the legal challenges they face. We’re proud to have supported more than 30 fintech and technology entrepreneurs’ innovative businesses, helping many go on to operate internationally.

Originally designed for fintech firms, this year Addleshaw Goddard welcomed all high-growth tech businesses to the scheme and has also placed a greater focus on businesses with an emphasis on sustainability.

Given Addleshaw Goddard’s experience and insight into the tech sector, this year we also launched the Aspiring Unicorns campaign to support high-growth tech firms. We are encouraging as many businesses and entrepreneurs as possible to get involved.

Aspiring Unicorns comprises seven critical lessons for high-growth technology firms to consider such as data, disputes, IP and investments, and we will be delivering relevant insights on these themes over the coming months.

We’ve developed our support programmes as we recognise the supportive infrastructure, innovation and opportunities that are all available within Scotland for high-growth tech and fintech firms. While the last year has been challenging collectively, tech and digital innovation’s positive influence throughout has reinforced why we are committed to championing its capabilities.

Collaborative leadership, entrepreneurial mindsets and support from government is required for Scotland to spearhead the fintech sector at a global level, and it’s evident that we have these tools to continue such drive.

For more information about the Aspiring Unicorns programme, visit: https://www.addleshawgoddard.com/en/insights/insights-briefings/2021/general/guide-aspiring-unicorns-supporting-high-growth-tech/

FinTech Scotland looking ahead and looking forward!

With August literally just around the corner we’re inching closer to the FinTech Scotland Festival which starts on the 16^th of September with Digit’s FinTech Summit.

This year we’re hoping to see a return to some face-to-face events and are looking forward to catching up in person with so many of you working across Scotland and UK fintech clusters. We’re starting to see more opportunities for those in person meet ups, respecting the opportunity to start seeing people again in a safe way. Personally, I’m finding it invigorating and energy building talking face to face with those inspiring and committed to driving change through fintech innovation.

That energy was more than evident in a FinTech Scotland meeting with Liz Truss, the Secretary of State for International Trade earlier in July. Not only was it good to see everyone in a (large) meeting room, but it was also great to hear directly from the leaders in Trace Data, Direct ID, Float, EedenBull, Modulr, FreeAgent on their plans and views on international trade and how Scotland is leading and building world class data driven innovations. Key markets discussed included the US, Asia and Australia. Opportunities are growing and many of the events in the festival will focus on international trade opportunities helping to build local understanding of fintech markets in Australia and other countries. (Link to the FinTech Australia event).

We’ve also been working closely with the University of Edinburgh and Edinburgh Innovations on a Data Driven Entrepreneurial Programme that is focused on the application of PhD research into industry and in building businesses. All the enterprises are using technology and data and are building innovative solutions across a host of issues, including climate change, economic recovery and financial wellbeing. The team at Space Intelligence is focused on managing environmental risks using technology and space data analytics to monitor carbon reducing initiatives. I also met Iceni Earth this week, another climate fintech innovation, and providing leadership and practical applications that supports agriculture and better land use. I’m constantly reminded how privileged and lucky we are in FinTech Scotland with continuous connections to new innovations supporting future business developments.

Over the coming weeks and months, we’ll be doing more on climate and fintech. The FCA recently announced a range of planned innovation programmes for later in 2021 starting with a Tech Sprint in October on the topic of ESG data and helping build market confidence towards ESG credentials and the environmental impact of financial decisions. There is more information here, and it’s another opportunity for Scotland to showcase its strengths in innovation, driving purposeful change and building collaboration to achieve Net Zero ambitions.

The topic of fintech’s role to address climate change was also discussed on one of the FinTech Scotland podcasts in July, it’s a great listen!

Fintech – supporting business growth and recovery

As we emerge from lockdown determined to experience the things we missed the most, we can also be confident that some of the developments we saw during the pandemic will remain.

I was reminded of this recently when I heard some of Scotland’s business community share their hopes, aims and ambitions for a post Covid recovery, while being candid about consumer expectations and the efficiencies digital interactions allow. Recovery and development in the ever-evolving digital economy was firmly part of the discussion as well as the role that fintech can play in enabling both.

Fintech is a key component in a developing digital economy that demands services and products to meet consumers changing habits, and help businesses deliver efficient and cost-effective operations. It is the thread that financially connects businesses with customers and suppliers and vice versa.

What’s exciting is the range of FinTech businesses in Scotland who are all working in this environment and here already, working with commercial and business customers.

They enable business owners to make truly informed decisions, using technology to analyse business and financial data to provide an accurate and up to date (often up to the minute) picture of their business. Float helps businesses make informed decisions about their cash. It’s an online cash management and forecasting tool that helps business leaders manage their business and make decisions with confidence.

Other fintech are providing a range of new digital tools to help businesses when it comes to managing payments, revenue, invoices, suppliers, and creditors. Know-It enables businesses to automate their credit control processes helping to manage credit risk, reduce debtor days improve cashflow and the businesses understanding of its customers.  Optimum Finance another fintech uses technology and data to unlock cash tied up in unpaid invoices supporting business with flexible invoice financing options.  Modulr works to simplify business payments including staff payments, merchant services, supplier payment workflows or payments reconciliation, helping to improve operational efficiencies.

FinTech’s in Scotland are also creating an accessible and transparent alternative to bank lending helping the non-bank lending sector to grow.  LendingCrowd has been working in this capacity since 2014. Authorised by the UK financial regulators it supports ambitious SME’s to grow their business by providing a range of funding and lending options including working capital loans, growth finance and the recent Coronavirus Business Interruption Loan Scheme (CBILS).

I’m continually reminded of the dedication and profound purpose of fintech founders in Scotland. It’s even more apparent in the fintech’s focused on the business and commercial sectors. These fintech teams continue to inspire us at FinTech Scotland with their focus and determination to use fintech capabilities to help the business sector recover post COVID.