Reflecting on an extraordinary year, looking to the future

For all the right reasons we’ve paused to reflect this week on the extraordinary year we’ve all had were the COVID-19 pandemic has touched all of us in some way, and we know for many it’s been extremely difficult. This past year has transformed nearly all aspects of life for many of us. And it’s been a year where technology and digital have been vital components for how we remain connected, work, learn and maintain access to the vital services we need.

Fintech Innovation has played an important role in helping us develop some of the new norms’ we first started talking about at the beginning of this pandemic. A year on and the fintech Community in Scotland has grown and evolved. It has also developed the propositions and services that have helped people and businesses maintain the access to vital financial services.

There’s a growing understanding of the fintech potential to make a difference through new technologies and access to data as well as determination in fintech businesses to build solutions that help future progress.

Scottish fintech innovations are looking to the future. Zumo’s hard work and smart money wallet and platform is transforming how we think about the future of crypto currency and money, with financial inclusion at its heart. Nudelaunched its app this week guiding students and newly employed to raise a deposit more quickly for their first home. Qpal is working to help those financially stretched or financially vulnerable and VistalWorks is working to protect people from fraud, keeping online shoppers safe from harm.

Scotland has an established and growing reputation for fintech for good, a point recently recognised in the recent UK Fintech Strategic Review, also known as the #KalifaReview. The Kalifa Review provided an opportunity to take stock of fintech across the UK and learn about the strengths and opportunities across all the regions. It positively identified the value of a Cluster model in helping economic growth and recognised Scotland’s fintech Cluster as a well-established environment for future fintech expansion.

The energy across Scotland’s fintech cluster offers the kind of practical support and determined optimism for more development and an ambition that sees us embrace more inspiring and often extraordinary opportunities as we look at the potential for cross sector innovation.  If we needed one, the Kalifa Review has given us even more impetus to harness the fintech opportunity for economic growth and social change.

We have another catalyst in the Scottish Technology Ecosystem Review, led by Mark Logan, the recommendations here set out a clear programme for collaborative action. It’s a call to action for us all and offers a future vision of how technology can help catalyse the post-pandemic recovery. This week’s announcement from Scottish Government confirmed its commitment to utilise the potential and support the broader opportunity to strengthen Scotland as a tech ecosystem.

If we needed an accelerant the COVID-19 pandemic has given us a year where we’ve experienced the power of digital and the role for technology. We’re learning from the experiences of the past and turn our attention to the hopes for the future. The Kalifa Review and the Scottish Technology Ecosystem Review have a number of common themes, apart from the obvious technology connection both call for action through collaboration to help us recover and embrace our full potential for an extraordinary future. Collaboration sits at the heart of what we do at FinTech Scotland and if you’re keen to hear more please get in touch.

Accelerating Scotland’s tech-led recovery.

Programme backed by £7 million funding in the first year.

A leading expert in scaling digital businesses has been appointed to oversee an ambitious programme to establish Scotland as a world-class technology hub. 

Mark Logan, former Skyscanner executive and Professor of Computing Science at the University of Glasgow, will advise ministers on implementing the recommendations stemming from his independent review of the Scottish tech ecosystem. 

The programme will be delivered with £7 million Scottish Government funding in its first year (2021-22). This will include a £1 million fund to make strategic investments in organisations and activities ”“ such as tech conferences, meet-ups or training programmes ”“ that create the best possible environment for Scottish start-ups to succeed.

Procurement for a network of growth-focused entrepreneurial hubs known as “tech scalers” will open for bids later this year. It is anticipated that there will be five scalers in different parts of the country by 2022, with the aim of supporting around 300 high-quality start-ups over the next five years.

Progress will be supported by a gender-balanced advisory board composed of some of Scotland’s most successful entrepreneurs and digital leaders including:

• Lesley Eccles, founder and CEO of HelloRelish and co-founder of gaming platform Fanduel
• Roan Lavery, co-founder of online accounting firm FreeAgent
• Sarah Ronald, founder of Nile HQ service design agency
• Stephen Ingledew, Executive Chair of FinTech Scotland

Finance Secretary Kate Forbes said:

“Mark is one of the most respected figures in Scotland’s tech scene and his experience, passion and global profile will be invaluable in our joint mission to elevate Scotland’s tech ecosystem to world-class level. 

“The expertise and industry perspective of the advisory board will also be instrumental in ensuring we create the conditions and infrastructure needed to incubate a stream of start-ups that reach sustained profitability and can do so at scale. 

“From attracting young people into computing science courses to supporting a community of high-growth businesses, this programme of work will be critical in determining the future contribution of Scotland’s tech sector to our economic recovery.”

Online travel businesses Skyscanner was Scotland’s first “unicorn” ”“ the industry term for a tech company valued at more than $1 billion. Professor Logan joined the firm as Chief Operating Officer in 2012 until its acquisition in 2017. 

Professor Logan said: 

“It’s very exciting to witness the shared sense of mission and ambition across government, industry and the education sector in bringing the tech ecosystem review’s recommendations to life. I’m pleased to have the support of such an experienced board as we strive to make Scotland a leading technology economy.”

Background 

Mark Logan’s Scottish Technology Ecosystem Review was published in August 2020 and the Scottish Government has committed to implementing its recommendations.

A full list of board members will be published ahead of its first meeting in May 2021. 

The £1 million Ecosystem Fund is expected to open for applications in summer 2021.

A document setting out the Scottish Government’s initial expectations of tech scalers will be published shortly and used as a basis for discussions with potential bidders.

Work to develop the technology sector will contribute to the successful delivery of Scotland’s updated digital strategy which was published this month and complements the artificial intelligence strategy published earlier this week

Picture Credit: Pexels

Unleashing Fintech as a Driving Force for Economic Recovery

An independent review of the fintech commissioned by HM Treasury has highlighted the important role fintech can play in driving economic recovery by creating jobs, developing global trade and enabling financial inclusion.

FinTech Scotland along with fintech bodies across the UK contributed to the Fintech Strategic Review (FSR) recommendations which 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.

The detailed data-driven analysis of fintech innovation across the UK gave recognition to the momentum of the FinTech Scotland cluster, which included growing expertise in open finance, payments, regulatory innovation (RegTech) and “Fintech for Good”.

The Fintech Scotland cluster model was noted as a driving force since formation in 2018, progress over three years which has included,

• Entrepreneurial Growth, increasing number of fintech SME firms from 26 to 155 today
• Innovation Excellence ”“ collaboration to establish Global Open Finance Centre of Excellence in 2020
• Strategic Engagement ”“ 27 strategic partners from private, public, academic sectors
• Practical Collaboration ”“ developing mutual opportunities with UK colleagues in the Fintech National Network
• Global Recognition ”“ European cluster centre of excellence accreditation in 2020

Stephen Ingledew, Executive Chair of Fintech Scotland and a member of the FSR working group commented,

“Fintech has the potential to revolutionise how we live whether it’s paying for our shopping or managing our money or setting up a business”

“Crucially, it can play a pivotal role in stopping the exacerbation of economic and social inequalities. Fintech innovation is fast growing right across the UK and offers great potential for Scotland through investment, innovation and jobs.”

“We have been fully involved in the Review to share our learnings from the last three years, in which we’ve managed to build an inclusive and vibrant cluster, a model which The Review recognises can help foster innovation and collaboration in boosting recovery of the UK economy”

“ We believe the Review recommendations will support further progress in developing a growing fintech ecosystem and build on successes of home grown and international fintech firms already rooted in Scotland”

Linda Hanna, interim Chief Executive of Scottish Enterprise said:

“This independent review supports Scotland’s growing worldwide reputation as a leading fintech location.  Scottish Enterprise has been proud to partner with FinTech Scotland in developing a vibrant environment that continues to attract international fintech firms from around the world, providing economic opportunities for our communities and high-quality jobs for our skilled workforce.”

James Varga, founder of Direct ID and Loral Quinn, founder of Sustainably also contributed to the FSR and welcomed the recommendations on behalf of the fintech community.

James Varga said,

“We have known for some time that Fintech has been one of the fastest growing parts of the economy driving innovation across the country and the findings of this report illustrate why the future of fintech is very bright indeed and, with the right drivers, can continue as one of the UK’s biggest success stories.”

Loral Quinn said,

“The FSR is a boost for fintech entrepreneurs across the country and the package of recommendations will enable innovative small and medium enterprises to accelerate growth nationally and globally”

 

Deloitte co-led the FSR National Connectivity Chapter with Tech Nation, undertaking a comprehensive data- driven analysis of the sector across the UK.  Kent Mackenzie, Head of Fintech in Scotland, said

“the detail and data contained in this review will underpin and support what we’ve understood for a long time ”“ that fintech across the UK is alive and kicking, and primed for next stage of scaling’”.

The full report is available here

An update from Nicola Anderson on 2021

Happy new year and welcome 2021. With the continued lockdown and restrictions 2021 continues to throw a variety of challenges at us all, from all of us at FinTech Scotland we hope you’re all safe and well in what continues to be difficult times.

Fintech Scotland, new norms, new fintechs

2020 ”“ Establishing New Norms

We’re starting to wind down and think about finishing up for a break over the festive period at FinTech Scotland and like so many of you and other organisations out there we’ve been reflecting on what a year!

2020 has felt like a year where we’ve lost what was normal. Like so many, we’ve been working from home since March ”“ our last day in the office was the 12^th of March, forever etched in my memory! Since then, we’ve been getting used to a new norm’, new ways of working and phrases like you’re on mute’ have made it into our everyday working vocabulary.

Life moved online with technology and digital connectivity vital for new norms that were being established at work and school, for learning, shopping, social interaction and connection with family and friends!

We’ve been able to count our blessings in so many ways and continue to be privileged, inspired and energised by the FinTech Scotland Cluster.

Fintech driving New Norms’

The purpose and commitment to enable greater financial inclusion is a strength right across the fintech community in Scotland. The financial impact of COVID-19 on businesses and people has presented even more need to drive this agenda and Scotland’s fintech SME’s are providing a range of different products and services to help, enable and empower people.

Amiqus has progressed a collaborative initiative to ensure those facing homelessness and a loss of address can maintain access to vital services. @Proxy address, a new normal perhaps, is a solution that aims to overcome issues of financial exclusion because proof of identify to access products is closely tied to a permanent address.  It’s an innovative approach that’s enabling new insights on old issues and focused on purposeful outcomes.

Empowering people by making personal finance more insightful and transparent, while using technology to see all your accounts in one place, is fast becoming a new norm and driven by fintech’s such as Money Dashboard. The team there were recently successful in the NESTA Rapid Recovery Challenge to help people financially hit by COVID-19. The award recognised both Money Dashboard’s innovation to help people manage money and its ability to quickly scale to support more people and a growing need.

New ways are also driving the team at Nude, who are working to enable aspiring first time buyers to build a deposit for their first home. The innovation aims to help people build that deposit quicker and is working to support new savings norms to empower people through data, behavioural insights and investments.

The team at Sonik Pocket have been innovating to help children with money. They’ve been focused on the potential new norm that generation Alpha will have less experience with physical cash and are building a product to help teach them about the value of money in a digital way. The inspiring team come from a teaching background and want to see children included and engaged with money and finances.

Float, working with SME’s, is integrating a range of activities to give businesses new tools to manage cashflow, accounts, and other business finance needs. Driving a new norm that helps business owners forecast accurate cashflow using real time information to get a visual view of ins and outs, pinch points and supporting confident business decisions.

There are many more fintech’s working and collaborating with industry partners, regulators, consumer organisations and universities to build the next phase of New Norms where technology in financial services supports inclusive outcomes for businesses and people.

New Fintech SME’s

The FinTech Scotland community of fintech SME’s has grown throughout 2020 and it’s a pleasure to welcome a host of new enterprises who are all aspiring to build and support other new norms and ways of working. Focused on cyber security Lupovis helps identify and divert cyber hackers away from crucial operating systems to keep businesses digitally safe, an increasingly vital need as we embrace new ways of digital working.  Love Your Employees is focused on employee health and financial wellbeing, enabling employers to support colleagues through changing financial, emotional and other health needs.

In addition, an established norm continues to see international fintech’s join the FinTech Scotland community. Montoux, Access FinTech, UNest, all international fintech’s, have started to establish and build business in Scotland. All attracted to Scotland because of the strength of talent and data driven innovation expertise available here, and all working in different markets. Montoux, a New Zealand business is focused on the life and health insurance industry. AccessFintech from New York is using its innovation to help financial operating and risk models evolve, and UNest, a Californian business is focused on enabling people to save for university and education costs.

New Connections

The positive outcome of the new working from home norm has been the ability to broaden our reach and speak to more innovative fintech communities across the world. This opportunity to welcome global innovations and to learn from shared experiences continues to energise us. Mickael, our French Scot has been building new alliances with fintech hubs around the world.  The FinTech Scotland festival reach worldwide audiences across the 70 virtual events held in September and we’re hoping to build on this experience for next year.

FinTech Scotland visited seven different countries virtually in 2020 and virtual events have brought about a new meaning to airmiles as we visited’ India, Australia, Hong Kong, Singapore, Europe and the US without leaving home. The ability to connect and learn from these experiences is wonderful as is the opportunity to profile Scotland’s fintech community at these international events.

New Year Ahead

Team FinTech Scotland are all hopeful for a healthier 2021 for all. We’re also looking forward to welcoming more fintech entrepreneurs into the FinTech Scotland community, through continued homegrown talent and through attracting international enterprises. We know Scotland will continue to inspire us through innovation, collaboration and inclusion, that there will be opportunities to continue to establish many more positive new norms and we’re ready to welcome all of that too.

Creating a Culture of Support in the Financial Services Industry

Pinsent Masons recently published a report Creating a Culture of Support in the Financial Services Industry’, produced in collaboration with a number of key stakeholders in the financial services industry, including financial institutions, fintechs and third sector organisations, to explore this important topic in more detail.

As part of the report, Pinsent Masons commissioned a consumer survey to obtain insight into the role individuals see their bank playing in helping to support them if they are affected by a mental health condition.  Their findings show that consumers are very much in favour of banks taking a proactive approach in helping consumers to manage their money, for example by implementing spending controls or notifying the consumer if an abnormal spending pattern is identified.

One of the key areas of focus for the FCA is ensuring that consumers with mental health issues are treated fairly and the report looks at the FCA’s approach, the legal issues associated with banks and other financial services institutions being proactively involved in supporting consumers, what the industry is doing to support consumers with mental health issues and how the COVID-19 pandemic has increased the need for additional support to be offered to consumers.

Creating a Culture of Support in the Financial Services Industry’ highlights the positive steps already taken by the financial services industry to ensure that consumers with metal health issues have access to the support they need and shows that that there is a huge opportunity for collaboration between industry players to offer even better solutions for consumers in the future.

A copy of the report is available here.