Paul Wheelhouse: Leading the way into future of money management

Paul Wheelhouse MSP.
Paul Wheelhouse MSP.

Scotland boasts a proud, world-renowned history of innovation in financial services, dating back centuries; indeed, Scotland can be said to have invented retail banking and ATM technology.

We continue to punch far above our weight in the global finance sector and we’re now leading the way into the next generation of money management.

As minister for both business and innovation – and also an economist by trade – I’ve been able to witness an exciting and dynamic period in which Scotland is positioning itself as a potential world centre for financial technology (or fintech) industries.

Financial services are going through a global transformation, driven by demand from customers and the growth of smartphone use, so there’s never been a more vibrant time to mark our place in this sector on the world stage.

While the trend in consumer preferences presents challenges, such as branch closures, there also exists a wealth of opportunity for fintech in Scotland.

As well as opening up new markets, this is stimulating continued innovation – one of the things we already do best.

Fintech in Scotland has attracted nearly £37 million of investment over the last decade, with a flourishing network bringing together start-ups, large firms, universities and public sector partners.

Scotland is an important location for many multinationals – JP Morgan, HSBC, Morgan Stanley, NCR, Ingenico and Avaloq, to name a few. Indeed, JP Morgan’s European Technology Centre in Glasgow, for example, is a vital strategic technology hub that hosts 1,300 employees. The 2017 Global FinTech Hubs Federation report from Deloitte identified Scotland as the most complete financial and business services industry cluster in the UK outside London and the south-east, with Edinburgh ranked 15th out of 44 global fintech centres.

I want Scotland to make it into the top five in the next couple of years.

Scotland has created an environment that will help firms in this sector to evolve and thrive, as well as supporting the evolution of start-ups and attracting investment. Our universities are already world leaders in many of the technologies driving this revolution, including artificial intelligence, data analytics and blockchain.

Moreover, they are providing a stream of graduates with world-class technical skills in these crucial areas in which there are excellent career prospects.

We are building on Scotland’s global reputation for banking, asset management and insurance, underpinned by academic and research expertise.

Change in the nature of financial services is inevitable and the Scottish Government is determined to ensure Scotland capitalises on opportunities that arise and retains its place at the forefront of the industry.

FinTech Scotland was launched last year with £250,000 Scottish Government and Scottish Enterprise funding combined with financial and practical support from Edinburgh University. A further £250,000 was provided by Scottish Financial Enterprise members. This exciting initiative sees us work with industry and academic partners to unlock the economic benefits of a successful fintech sector.

Our support for FinTech Scotland will help drive sustainable economic growth in financial services through innovation, collaboration and inclusion.

We want FinTech Scotland to make financial services more open, creative and inclusive to all through new innovative technologies and assert Scotland’s capability as a leading and thriving fintech environment.

FinTech Scotland aims to create an integrated (fintech) ecosystem through funding, support, infrastructure and talent that recognises and responds to the needs of all stakeholders.

It will provide an opportunity for business creation and growth, as well as attracting diverse entrepreneurs and talent; securing Scotland’s place as a significant player in the global fintech sector and associated funding circles.

A key objective for FinTech Scotland is creating a better Scotland through financial innovation, collaboration and inclusion – and that’s an exciting legacy for those who forged Scotland’s leading reputation in global finance.

Paul Wheelhouse MSP is Minister for Business, Innovation and Energy for the Scottish Government.