Scotland is perfectly placed to tackle the challenges and exploit the opportunities of new technology, says Kate Forbes.
The financial sector has seen huge innovation in recent years. Scotland is already home to some of the largest financial services companies in Europe, making it a globally-renowned financial hub with a strong reputation.
We have expertise across the board – in cyber, data and fintech – creating a wonderful melting pot of capability that can give rise to unique partnerships and collaborative working, which will ultimately lead to better solutions for the consumer.Kate Forbes
But Scotland’s financial sector is not resting on its laurels. The world of financial services is changing, and it is essential that we continue to find new opportunities to diversify our financial services industry so that it prospers and grows.
By embracing fintech, we have the potential to create an additional 15,000 jobs across Scotland’s financial sector, generating an additional £1.1 billion in salaries through to 2027.
Recognising this opportunity, the Scottish Government, with Scottish Financial Enterprise and partners in industry and the academic sector, established FinTech Scotland to focus on the needs of the sector and to drive its growth. Through their efforts we now have close to 100 fintech companies in Scotland.
Scotland has the fundamentals in place to achieve global recognition as a top-five location for fintech, and we are ambitious to achieve this. Our economy is open and competitive, we have a highly skilled workforce, great quality of life and an attractive cost base compared to other financial centres.
The financial services sector in Scotland employs about 86,200 people across 2,035 enterprises, and many of the large institutional companies already have significant technology operations and capability in Scotland. JP Morgan has located one of its two global software development hubs in Glasgow, employing more than 1,250 staff in technology roles across cloud computing, big data and mobile, while Barclays’ new Glasgow hub represents one of the largest inward-investment projects secured in recent times.
The success of the sector relies, first and foremost, on the talent of the people it employs. Availability of skills and a supportive investment environment is essential in ensuring that the sector is able to capitalise on future opportunities, particularly in the innovative field of fintech.
We have Skills Investment Plans in place for both the financial services and ICT and digital technologies sectors, with firms across the sector benefiting from these schemes.
Funding of £11 million has been targeted specifically on delivery of the Digital Skills Investment Plan, seeking to tackle both immediate digital skills shortages and to boost the number of skilled individuals we have in the pipeline and in the workplace.
Fintech has the potential for massive disruption and opportunity, but equally it brings new and emerging risks such as the threat of cybercrime. The volume and sophistication of cyber threats are increasing, alongside a growing awareness about how organisations should responsibly use and secure data.
However, Scotland has a real advantage in this space. We have expertise across the board – in cyber, data and fintech – creating a wonderful melting pot of capability that can give rise to unique partnerships and collaborative working, which will ultimately lead to better solutions for the consumer.
We have fantastic cyber capability both in terms of cybersecurity companies, which have doubled in Scotland over the last two years, and world-leading academic expertise across a whole host of cyber themes, from digital forensics and ethical hacking to blockchain, and many in between.
Our innovation centres such as CENSIS and DataLab connect industry and academia, and offer critical advice and support in the development of new products and services.
ScotlandIS, FinTech Scotland and Technology Scotland make it easier than ever to build connections, share information and engage within and across industries and sectors.
But there is still much to do to realise the long-term potential of fintech opportunities for Scotland.
The rapid pace of change in the world of technology is transforming the way in which financial services companies operate, and how customers access services.
Such changes present opportunities right across the financial services landscape – from the large firms who will derive great benefit from the innovative use of data to the small entrepreneurial start-up companies developing the ideas and technology we will rely on.
We are developing strengths in these areas that will allow us to carve out a niche in hi-tech, high-growth companies that will place Scotland at the very forefront of fintech development.
• Kate Forbes is Scottish Government Minister for Public Finance and the Digital Economy.