Scotland warned to embrace Fintech or risk consequences

Daniel Broby
Daniel Broby
Promoted by Strathclyde Business School

New university course set to bring Scotland up to speed with very latest in innovative financial technology

Financial technology (Fintech) is developing rapidly, utilising software and programming code in innovative ways. It is driving efficiency up and costs down. With the adoption of Fintech, financial transactions will become instantaneous, traditional paper money could be replaced with digital money and entrepreneurs will be able to raise money directly from the public.

The new Masters in Fintech will help Scotland embrace its digital future

The new Masters in Fintech will help Scotland embrace its digital future

Adopting Fintech represents both a big opportunity and a big threat to the financial sector. Scotland could see huge benefits from getting on board with Fintech and the Scottish financial sector needs to capitalise on it – or miss out.

That’s the thinking in a paper by Strathclyde Business School academics released in the autumn at a Fintech symposium at the university’s Technology and Innovation Centre (TIC).

The paper argues that the adoption of Fintech in Scotland should be accelerated.

Scenarios developed in conjunction with the Fraser of Allander Institute illustrate that a slow adoption of Fintech initiatives in Scotland will result in a lack of competitiveness. This, combined with a shrinking banking sector, could result in a worse case loss of 3,295 jobs in the financial sector over the next three years.

The rapid adoption scenario, however would see the creation of 3,885 SME jobs in three years, which means 7,646 total jobs when indirect ones are included.

Over ten years the results are even more dramatic. The cumulative ten-year cost to the total salary bill if Scotland is inactive on this could be as high as £597million. However, if Scotland gets it right, the cumulative ten-year benefit to the total salary bill could be as high as £1.1billion.

So what can be done? Scotland needs the skills, infrastructure and vision to capitalise on Fintech. This could include:

· Adoption of a co-ordinated plan for incumbent, challenger financial companies, start-ups, universities, incubators and the Scottish Parliament.

· The establishment and expansion of a big data support facility for the financial sector, the installation of more dark fibre connecting its financial centres and the integration of timing and other digital security measures.

· The establishment and the financial support for a Scottish backed cryptocurrency.

· Creating a fund to invest in start-up Fintech companies, thereby giving them access to capital.

Some of this is in process, some already here and some is for the future – hopefully the near future or Scotland may miss out on its chance to become a digital hub.

The Business School is doing its part with the launch of a new programme, a Masters in Fintech, which will start in September 2017.

Daniel Broby, Director of the Centre for Financial Regulation and Innovation (CeFRI), helped design the course. It is his research that demonstrates the potential impact of Fintech on the financial sector. He said: "Fintech is a multi-disciplinary area and this plays well to Strathclyde’s strengths. Programming code, data analytics and the theory of financial markets are all core teaching modules and areas of research excellence for us.”

Believed to be one of the first in the UK, this will be another step in further establishing Scotland as a leader in financial innovation. The programme combines finance, programming and data analytics and is taught jointly by the Department of Accounting and Finance and the Department of Management Science.
Students will be offered a rigorous core academic curriculum combined with the entrepreneurial and innovative elements of the Fintech sector. It includes a selection of financial method, programming, data analytics and regulations and technology, and will introduce the applications of blockchain and distributed ledgers.

Graduates of this programme will be highly employable and have the relevant skillsets for future careers in capital markets. Strathclyde Business School is confident the course will help students to fast-track into a successful career in the finance sector.

As a Strathclyde Business School programme, it has business at its heart, with real industry experience a key component. For example, one class is led by industrialists in partnership with academics, allowing students to experience the practical reality of applying analytical methods in financial technology business.

The MSc in Fintech has received letters of support from Scottish Investment Operations (SIO) and the Skills Development Scotland (SDS) as well as a number of leading financial institutions.