Five things a city needs for a thriving fintech hub

Kent Mackenzie tells David Lee about the key principles behind successful fintech hubs

We hear a lot about the development of the fintech “ecosystem” in Scotland and how the constituent parts of an exciting, developing industry might best fit together.

Is there a global blueprint to follow to develop an effective ecosystem?

Kent Mackenzie, a director and head of fintech at Deloitte, thinks so.

The advisory company has been working across several other cities and regions which have, or hope to create, a fintech hub – including Manchester, Canada and Saudi Arabia, as well as here in Scotland.

“They are all very different, in terms of their existing strengths, their potential, their approach and their progress, but at their heart, the process they are going through to create an effective ecosystem is very similar and in many ways highly repeatable,” says Mackenzie.

Over recent months, Mackenzie has pondered what made Tel Aviv in Israel so successful in establishing an ecosystem around cyber security or what was behind the success Silicon Valley has had in generating amazing tech firms through its ecosystem for decades – and whether it could be possible to bottle the “secret sauce”.

He says: “I thought about this for quite a long time, studied how ecosystems had come together, reflected on it with friends and family (always a good source of challenge) and spoke to gurus within the industry.

“I spent time in cities like Tel Aviv, where the strength of the ecosystem is palpable, and lived and breathed it through helping create FinTech Scotland.

“And when all of those things coalesced in my head, I concluded that there was a way to build a blueprint for doing this. Sometimes, those fintech hubs move forward in a way very specific to their circumstances – but we thought there must be some key principles.”

Deloitte’s five guiding principles

1) Stop being good

“Fintech needs something different, some disruption,” says Kent Mackenzie.

“It’s important to step quickly away from that stage where you are just talking about it.

“How do you identify that bold step that can move your fintech city forward?

“In Edinburgh, the aspiration is to be the data capital of Europe.

“It’s brave to call it, but it makes sense to help order thoughts and be clear in building a strategy around a component of fintech.”

2) Create your own legend

“What do you want the story of your fintech future to look like?” asks Mackenzie.

“What do you want the ecosystem to achieve? In Saudi Arabia, for example, we are helping align the ambition of the fintech community against the broader ambition set out in the region’s Vision 2030 strategy and their desire to accelerate the growth of technology and other industries.”

3) Brave the brutal truth

“Recognise what you are good at – and what you are not so good at. Don’t try to do everything.

“Focus on some niche areas and do them really well. Where are you on the journey, and how you find those specialisms?

“So often I see cities or regions who want to be all things to all people when it comes to fintech, it is important to understand the power that can be created through partnering or linking to other communities to plug gaps that you might have in your own ecosystem.”

4) Scale at the frontier

“This follows on from creating the legend; within that big picture, what are the specific areas that you can really excel in, and how do you drive them forward?

“Take the things that you do well now, and scale them.

“Set the benchmark for other fintech hubs to aspire to, in the areas you excel.”

5) Go further together

“It’s all about collaboration and Scotland has done that very well,” says Mackenzie.

“No matter how many parties are involved in the fintech ecosystem, you have to collaborate and network.

“Never be more than one or two steps always from a partner you might need to work with to make progress.”


The result was the creation of Deloitte’s Fintech Cities playbook, launched at the Innovate Finance Global Summit in London in March and aimed at helping cities, regions and countries define a blueprint and strategy to accelerate the growth of an ecosystem and emerge on the global stage.

“I’ve learned about how to do this, and how to do it right,” says Mackenzie, an ardent fintech enthusiast and a major player in Scotland’s rise up the global charts.

“What we did with this playbook was two things – we developed a clear view of the mechanical elements you need to build an ecosystem and what you need to get it right.

“We then worked with colleagues in our innovation and design agency, Market Gravity, to bring it to life as something tangible, exciting and really output-focused.

“The end product is something really powerful – the process and framework for creating an ecosystem. It’s attracting interest in the Middle East, North America and in a range of cities and regions across Europe – places that want to power their way onto the fintech stage, but do so as a collective, leaving a legacy for those willing to step forward and lead. At its heart, building an ecosystem is about recognising the different parts of the jigsaw and understanding the roles each member of the ecosystem plays, their specific needs and expectations.

“It’s also about understanding the collective desire and focus and structuring a voice and story around that to develop your own sense of connection and focus on shared goals.

“You must also be tuned into the heartbeat of a region or city and feel what needs to be done – but importantly try not to be ‘all things’.

“Find out what your unique selling point is and leverage it.

“What normally happens with a fintech hub is that a body or person steps forward and says, ‘We need to bring this together’. That’s the catalyst and, once this happens, things start to move.”

While it is important to have a number of guiding principles, there are five that emerged strongly in Deloitte’s work (see 'Five Guiding Principles', below).

Mackenzie feels Scotland is doing well in terms of these big themes. “There was, for a while, in Scotland and elsewhere, lots of talk about the ecosystem but nobody was really doing anything about building an ecosystem strategy or plan.

“Collectively we have now done this and, although it will flex over time, it is a blueprint for Scotland we can all begin to work from.”

Edinburgh City Region Deal

Mackenzie is also excited about the opportunities presented by the £1.1 billion Edinburgh City Region Deal, which has put data innovation at its heart.

It has £300 million earmarked for “world-leading data innovation centres” which play a part in enabling fintech development.

“The timing of this is brilliant. Data is the lifeblood of fintech, the timing of city deal and its ambition is a perfect,” he says.

However, Mackenzie cautions against Scotland trying to copy a specific global hub: “Some of them take a very broad definition of fintech, or fail to define it at all.

“Some do it with a specific commercial partner, or in direct collaboration with a university or professional partner.

“There are lots of different models but I think the five big themes always apply.

“It’s not a competition; there is huge opportunity to build relationships with other global hubs that can be valuable and complementary, not just in bringing new insights but also opening up talent and funding networks.”

He is very impressed by what has been achieved in Israel: “I get really excited by Tel Aviv, I’m back there in June with some of the firm’s leadership teams to explore and understand the ecosystem in more detail.

“A number of elements have led to Israel excelling in cyber-security technology and developing a world-class reputation for it, and there is also an amazing spirit of edgy innovation.

“There is also a real desire to build things and get them to market quickly. To me, that is the spirit of innovation – be clear in what you are good at and the problem you are solving, be bold and come to market quickly to test and learn.

“If we can capture that spirit in Scotland, it would be brilliant.”

The fintech pioneers in Scotland deserve major credit for driving the agenda forward quickly, says Mackenzie.

“There’s always a danger these things can become talking shops – but we seemed to get beyond that quite quickly.

“It’s testament to Graeme Jones at Scottish Financial Enterprise, Louise Smith, David Fergusson, Hugh Edmiston, Colin Halpin and Scottish Enterprise that it has really moved forward.

“The creation of FinTech Scotland, clarity around its strategy and appointment of Stephen Ingledew have been really significant steps and it’s a success story that it has happened relatively quickly.”

Mackenzie sees a growing maturity and evolution of one of the key relationship in creating a successful fintech hub: “There is a lot more open innovation, with large financial services organisations doing more work with new fintechs.

“There is more fluidity in the model and a cultural change that has seen a much closer collaboration with fintechs, and a desire internally to understand emerging technologies and how they can help re-imagine the customer journey, or create huge efficiency gains and, in some cases, new revenue streams.

“What is also incredibly important, however, is how we use these fintech hubs and centres to help build confidence among budding fintech entrepreneurs and train the next generation of talent.

“I believe that central to our strategy in Scotland has to be the way in which we engage our young people.

“That means programmes and meet-ups, coding clubs and the like, but also coaching and encouragement to be creative and think about how we could re-imagine financial services. It is important that we not only teach the skills, but also build confidence, encourage creativity and define a culture that allows people to be bold and unencumbered in their thinking.

“In summary my experience over the last few years has taught me that there is, to a degree, a formula that can be followed to capture the energy and ambition of a city or region – and to channel that in a certain way to accelerate the growth of fintech and the ecosystem.

“It’s not straightforward though – it requires tenacity, good timing, resilience, diplomacy, commerciality, emotional intelligence and good old-fashioned grit to drive toward what often ends up being a very shared and powerful vision.

“But why wouldn’t we do that? The future is incredibly bright and now that Scotland has captured and understood what it means to be a fintech hub, our focus must now be on execution.”

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