Fintech fast lane: Scotland sees job numbers jump by quarter in two years with more to come

Industry leaders highlight the benefits of collaboration between start-ups and major financial institutions.

Scotland is punching above its weight globally when it comes to developing the next generation of financial technology with the number of people employed in fintech growing by almost a quarter over the past two years.

The country’s burgeoning fintech cluster now supports in excess of 10,500 people across 226 small and medium-sized enterprises (SMEs), according to industry organisation FinTech Scotland. It comes as more and more of us switch to digital banking and use apps to manage a range of services such as savings, investments and pensions.

FinTech Scotland said the 24 per cent increase in headcount numbers since 2021 had been driven by a “growing maturity” across the sector and more international businesses choosing to settle in Scotland. The latest research also reveals that around two-fifths of “fintech enterprises” have reached scale-up stage, creating further employment opportunities.

Nicola Anderson, chief executive of FinTech Scotland, said the country was beginning to realise its fintech potential.

FinTech Scotland, which this month celebrates its sixth anniversary, said there had been an increase in the number of smaller enterprises scaling through collaboration with large financial institutions. Fintech innovation labs are said to be playing a key role in the sector’s growth, “creating the environments that enable product development to thrive and support partnerships to develop”.

Those innovation labs have been launched with major financial institutions such as Lloyds Banking Group, TSB and pensions provider Phoenix Group. Examples of collaboration between fintech SMEs and their larger peers include: Snugg and TSB, with their tie-up enabling the bank’s customers to improve their home energy efficiency; Behavioural Finance and Phoenix supporting better retirement outcomes for consumers; and GoCodeGreen teaming up with Lloyds around “digital sustainability”.

Nicola Anderson, chief executive of FinTech Scotland, which was founded in January 2018 as a joint initiative involving the University of Edinburgh, Lloyds Banking Group, HSBC and Scottish Enterprise, said Scotland’s thriving fintech SME community had made the country a major destination for companies worldwide. Fintechs tapping into Scotland as part of their development plans include AccessFintech, Clearwater Analytics, Two Hands and Mail Metrics.

Anderson said the cluster body had further plans in 2024 to support fintech SMEs to scale, while maintaining a focus on investment, international connection and “impactful collaborative partnerships”.

More and more people are opting to use digital banking and apps to manage a range of services such as savings, investments and pensions.

She said: “As we mark Fintech Scotland’s sixth anniversary, we’re focused on building on the strong foundations that are enabling Scotland to continue to realise its fintech potential. Seeing the increase in SMEs and the growth in jobs is a testament to the fintech businesses and the commitment from all involved in the FinTech Scotland cluster. It spurs us on as we look to the year ahead and continue to focus on growth, the fintech community, and supporting Scotland to achieve its ambition as global fintech leader.”

The not-for-profit organisation was jointly established with the financial services sector, universities and Scottish Enterprise to ensure that Scotland seizes global fintech opportunities and achieves “positive economic and social outcomes”. It is now supported by a broad range of global financial services, technology and professional services firms as well as major universities, the Financial Conduct Authority and Scottish Enterprise.

In August 2022, FinTech Scotland was formally recognised for the development of the fintech cluster and accredited with the silver label for cluster management excellence by the European Secretariat for Cluster Analysis (ESCA).

Jane Martin, managing director of innovation and investment at Scottish Enterprise, said: “The 24 per cent increase in jobs in the fintech cluster reflects Scotland’s commitment to nurturing an environment where technological and financial innovation can thrive. The growth in employment is a clear indicator of our country’s attractiveness to global fintech companies, driven by our rich talent pool, academic excellence and well-established strengths of our financial services sector.

“We look forward to working with Fintech Scotland and the wider sector to see even more companies coming through, achieving scale and creating new jobs over the years to come.”

Jackie Leiper, chief customer and distribution officer, insurance, pensions & investments at Lloyds Banking Group, and chief executive of the bank’s Embark arm, said: “Over the past three years through our Launch Innovation Lab we have worked with more than 30 fintech firms, supporting their product development, generating new products for our customers, clients and colleagues whilst tackling some very important challenges around climate, cost-of living and financial inclusion.

“A growing fintech sector benefits the whole industry, supporting talent development and attraction, driving innovation and enabling purpose-led collaboration with good outcomes for business and consumers. The lab will continue to grow, and we will continue to work in close collaboration with FinTech Scotland to build on our success to date and create more opportunities to engage fintech businesses in 2024.”

Robin Peters, co-founder and chief executive of Edinburgh-based Snugg, which has developed an “eco platform”, said a “collaboration mindset” was at the heart of the fintech cluster’s success. “Thanks to our new partnership with TSB, secured through their innovation lab, we’ve been able to accelerate our growth plan and develop our team further,” he added. “Now on our scaling-up journey, we’re excited to see FinTech Scotland’s plan to provide many more collaboration opportunities, helping us move to the next stage of our growth.”

Pardeep Cassells, global head of buy-side customer experience at AccessFintech, said: “The growth we’re seeing shows how fintech companies like AccessFintech can have an impact on Scotland’s economy. It echoes what we are experiencing within our organisation. In the past three years, we’ve grown the number of full-time colleagues from zero to 24 and will continue to grow in 2024. Our company started in the US and Glasgow has been a great second home for us.”

FinTech Scotland roadmap: 'Collaboration and innovation changing people’s lives’