What does Scotland need to do to be a fintech leader?

ScotlandIS chief executive Polly Purvis. Picture: Chris Watt

ScotlandIS chief executive Polly Purvis. Picture: Chris Watt

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We asked leading figures from the financial services and technology sectors what they think.

• Polly Purvis, chief executive, ScotlandIS

'Scotland must invest in its people and the spaces that bring them together,' says Polly Purvis. Picture: Lisa Ferguson

'Scotland must invest in its people and the spaces that bring them together,' says Polly Purvis. Picture: Lisa Ferguson

Fintech provides a global opportunity but if Scotland is to grab a share of that we need to move quickly.

Potential fintech start-ups must bring together deep domain knowledge, technology and marketing expertise plus a clear understanding of the international market opportunities they can address.

Scottish businesses like Nucleus and ShareIn are already disrupting traditional markets and it would be great to see a host of new companies coming through.

We have one of the best start-up ecosystems in Europe, with access to smart, skilled people.

Deloitte director Kent Mackenzie. Picture: Contributed

Deloitte director Kent Mackenzie. Picture: Contributed

Creating dedicated fintech collaboration space and venture funding would help create a clear focus, but we also need to concentrate on innovation, encouraging people to think differently and challenge existing business models.

Opportunities exist both in simplifying traditional financial services, providing a range of apps that users can then bring together to suit their own financial requirements, and also in providing new ways of securely handling very complex, highly regulated areas by harnessing the power of data science, and advanced software technologies.

• Steve Tigar, chief executive, Money Dashboard

Scotland’s traditionally strong financial services sector and its wealth of skilled labour and resources has laid a foundation for several successful fintech companies like Money Dashboard, Nucleus and LendingCrowd to emerge in recent years.

ShareIn chief executive Jude Cook. Picture: Chris Watt

ShareIn chief executive Jude Cook. Picture: Chris Watt

For these companies to thrive and for new start-ups to enter, Scotland must invest in its people and the spaces that bring them together.

This enables the cross-pollination of ideas to create innovative products and services that complement those provided by financial institutions like Standard Life, JP Morgan and the major banks.

The creation of dedicated fintech hubs in central Edinburgh and Glasgow can give Scotland’s burgeoning industry a place to join forces, encouraging sharing of lessons learned with other companies, which will ultimately lead to faster innovation.

With this support platform in place, Scotland can catalyse the growth of its top start-ups to move beyond its geographical borders and create our next unicorn.

Nucleus Financial Group chief executive David Ferguson. Picture: Jane Barlow

Nucleus Financial Group chief executive David Ferguson. Picture: Jane Barlow

• David Ferguson, founder and chief executive, Nucleus Financial Group

Scotland’s fintech opportunity lies in cultivating an environment in which start-ups can thrive all the way through to real scale, and incumbent institutions are motivated and mobilised to adjust and re-purpose themselves for a more client and tech-centric world.

Customer interaction with financial services will change radically to be less about products and more about customer outcomes and while that is easy to say and hard to deliver, Scotland is very well-placed to execute on the global stage.

We have immense domain knowledge (in products and world-leading regulation) and a large and growing technology talent pool.

Complementing these with the right infrastructure and a clear vision for the future should allow us to become a top 20 global player in a more modern, more transparent and frankly better financial services industry.

• Jude Cook, chief executive, ShareIn

I believe for Scotland to become a true world leader in fintech requires three ingredients: funding for fintechs, world-class expertise getting attracted and retained and a pinch of luck.

Access to funding to truly scale great companies is crucial to disrupt and grow the ecosystem here in Scotland. Fixing a broken financial services industry doesn’t come cheap.

In terms of expertise we’re well placed already to benefit from people who have decades of experience and know-how from within the incumbent financial institutions.

Encouraging collaboration between them and technological innovators is going to attract more world-class expertise.

Decisions made at a UK or EU level are largely out of our control, the results of Brexit negotiations and potential second independence referendum create uncertainty.

A little bit of luck would be helpful. Although one thing is for sure regardless of whatever is thrown at us, Scotland’s fintech innovators are not going to sit around complaining. They are too busy innovating.

• Graeme Jones, chief executive, Scottish Financial Enterprise

All the parts of the fintech jigsaw are here, including a vibrant, established, multi-sector, financial services industry and world-leading universities producing skilled graduates.

Bringing them together to create a strong, connected community is happening now but to be a world leader in ten years, we need to be inspiring our future generations to see the potential for exciting careers in a very different, technologically driven, Scottish financial services industry.

Education and training are key, we must be developing the skills now, to give today’s young people the chance to be

the innovators and leaders of the industry in the future.

• Philippe Meyer, managing director, Avaloq Innovation

I think it is crucial for Scotland to develop a sound fintech industry as many existing financial services industry jobs are going to disappear in the coming ten years.

To face this challenge, Scotland already has a number of strengths: it is a strong financial centre, it has excellent universities and talented banking professionals and it has a very supportive regulator and good access to capital.

On the downside, exceptional talents are rather rare.

Growing a talent pipeline will enable Scotland to develop and staff more fintech companies. Increasing the awareness about banking and technology in schools from the youngest age is key to attracting youngsters to these kinds of careers.

But what Scotland needs most to lead in fintech is to be aware of its strengths, make sure they are pulled together and let the world know why Scotland is uniquely positioned.

• Kent Mackenzie, director, Deloitte

Choose being bold, brave, confident and assertive about what Scotland has to offer.

Choose to remember we are pioneers of fintech (think “creation of the ATM”).

Choose telling stories, colliding and not being shy to share your ideas.

Choose connecting to our artists in Glasgow, our financiers in Edinburgh, our gamers in Dundee and engineers in Aberdeen.

Choose empowering our children, upskilling our workforce, and reaching the underrepresented fintech revolutionaries, rogue-coders and introvert innovators.

Choose creating a fintech eco-system that’s connected online, through a network of physical hubs and incubators.

Choose gathering and socialising to discuss how fintech can solve some of society’s challenges around financial inclusion.

Choose going global and not being concerned about political uncertainty. Choose a lifestyle that works.… Choose fintech in Scotland, and shout about that choice.

• Susan Fouquier, regional managing director for business banking in Scotland, Royal Bank of Scotland

This is an exciting time for the fintech sector and it is crucial that as a country we embrace the potential the industry has to offer.

As a bank we are working hard to help maximise opportunities for businesses in the sector – and to help our clients make fintech a part of their business make-up.

Many of our business banking customers are already using a new free finance tool called FreeAgent, which has been developed by a fintech business in Edinburgh.

This month we will also launch our new fintech accelerator programme at Gogarburn.

Based at our entrepreneurial hub, this will be Scotland’s first dedicated fintech centre and, working with our partners Entrepreneurial Spark, it will offer entrepreneurs six months of core acceleration support and bring together industry leaders and networks.

Our head of design in personal and business banking, Louise Smith is also a UK government fintech envoy.

By working together and sharing learning we can help develop nimble businesses which are able to operate in this fast-moving sector and create an ecosystem in Scotland where fintech can thrive.

• Callum Sinclair, partner – technology/commercial, Burness Paull

Scotland needs to be bold and agile, keeping pace with the fast-moving political, regulatory and technology landscape.

We need to embrace innovation and improve collaborative working between large financial service (FS) business with its experience, established brands, market penetration and regulatory licences and small disruptors who bring creative thinking, agility, and understanding of new technologies.

We should also look internationally to other fintech hubs from Singapore to Sydney to ensure we are adopting best practice, and potentially to collaborate.

Our talent pipeline is enviable, but we need to continue to upskill our workforce from the earliest stages in STEM education to avoid a skills shortage slowing us down.

And we must attract the top talent from graduates outside Scotland.

Early-stage funding sources for Scottish fintechs are plentiful, but demystifying the funding ecosystem and providing help to navigate it will be key.

Improving Scotland’s infrastructure and connectivity will also be important.

Finally, a mature understanding of the regulatory environment and strong relationships with regulators, such as the FCA and ICO, will allow Scotland to see FS regulation as an opportunity, not a compliance burden.

• Duggie Carlyle, founding partner, Carlyle

Scotland has a rich, globally recognised heritage in financial services and banking, which has led to many brands of note choosing to have a significant presence here.

As the world becomes a smaller place and the mobility and behaviours of the workforce evolve, this heritage puts us in a position of strength.

As a relatively small nation we need to promote these strengths and broadcast the high levels of collaboration and sharing that reside here.

We have a thriving community of innovators, investors and educational bodies, as well as an increasingly relevant workforce, and we all must continue to pull together towards a collective vision of building an influential fintech centre.

The more opportunity that exists here, the easier it will be to continue to attract and retain world-class talent.

Skilled and ambitious workforces are attracted not only to the job today, but to the wider environment, culture and the belief they are contributing to a larger, sustainable movement.

• Steve Ewing, director of operations, Informatics Ventures

Scotland has a thriving technology entrepreneur ecosystem, that’s no longer up for debate. We have a wealth of tech talent coming out of our universities, not least the University of Edinburgh School of Informatics, the largest in Europe.

Against this propitious backdrop, for fintech to thrive in Scotland in the coming years we need to work even better collectively, we need to attract experienced – “been there, done it” – fintech talent to help build and scale our early-stage fintech ventures.

We’d like to see fintech start-ups move their operations to Scotland even, we need greater access to the opportunities and challenges facing the financial services industry, we need more dedicated physical space akin to the newly-opened fintech hub at the Royal Bank of Scotland at Gogarburn.

In short, we need greater critical mass. There’s always more we need to do… so let’s just get on with it and do it.

• Russell Dalgleish, founding manager and partner, Exolta Capital Partners

Fintech is hot and the competition is on to see which countries and cities will win out as examples of fintech excellence.

I’ve visited some contenders recently, Hong Kong, London, San Francisco, how can Scotland hope to compete?

We have similar assets to our competitors; great talent, strong universities, tremendous tech and of course a financial sector heritage.

However, to win I believe we urgently need to nurture an environment of collaboration between financial sector players, technologists and the end user.

We are beginning to recognise the start of this with an ecosystem developing but this is something we must all proactively support.

The future competitors for financial services will not be other Scottish (or even UK companies) but instead international companies whose names we as yet probably don’t know.

So the answer to the question is simple, it’s time to open our arms and work together to define our future.

• Stuart Mitchell, director, Quest Corporate

Scotland has a rich heritage in banking and financial services and has for years applied human capital to drive forward these institutions to become global players.

Scotland now needs to harness its entrepreneurial spirit and bring together its financial services and technology skill sets to build out fintech solutions that can compete on the world stage.

We are well placed to understand the challenges faced by financial institutions and must use that knowledge to deliver solutions.

While the financial services market has played an important role in the Scottish economy, it is changing and if we are complacent we will lose.

A fintech company is generally geography agnostic. To thrive our universities must continue to attract the best talent, “brand” Scotland must be maintained and enhanced and we must attract inward investment.

If the product is right, I am convinced that the world will always buy from the Scots.

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