FinTech Scotland celebrates sector growth in line with roadmap
A year after publishing its FinTech Research and Innovation Roadmap, FinTech Scotland has stated that it is on track to meet its economic growth targets.
In March 2022, the independent cluster body published a strategic roadmap identifying industry priorities for the UK to accelerate its fintech ambition through research and development (R&D) and targeted innovation.
The plan was developed in coordination with fintech entrepreneurs, the financial sector, academia, regulators, public bodies and consumer groups, with the aim of providing a framework to increase the impact of fintech innovation across Scotland.
It also supported the recommendation in the Kalifa Review into the sector, for increased R&D investment in fintech innovation to accelerate cluster excellence.
The priorities in the roadmap centered on four strategic innovation themes: climate finance, open financial data, payments and transactions and financial regulation.
Over the next decade, the ambition is to significantly increase fintech-related jobs across Scotland and the UK, as well as produce an increase in gross economic value added (GVA) through fintech innovation.
One year later, industry-led collaborations have driven increasing action towards each of the strategic innovation themes. Examples include:
Climate finance
- 100% increase in fintech businesses in Scotland focused on climate finance.
- Accelerated fintech partnerships and fintech adoption through new innovation labs launched with Lloyds Banking Group and TSB with results helping customers towards carbon efficiency.
- Climate finance made possible through cross-sector collaboration with Space Scotland, accelerating sustainable innovations using data from satellite sources.
Open financial data
- 26% increase in fintech companies developing innovative solutions using open banking.
- Accelerated fintech adoption and creation of commercial opportunities through the launch of Phoenix’s innovation forum to support customer wellbeing.
- Smart Data Foundry’s research on vulnerability in the pensions market, the impact of late payments on the SME market and on the net zero agenda, all made possible through open data.
Payments and Transactions
- 19% increase in fintech companies in Scotland developing payment solutions.
- Investment of £94m in fintech companies focused on payments innovation in the last 12 months.
- Development of cryptofinance, blockchain and distributed ledger courses at Scottish universities.
Financial regulation
- 13% increase in fintech companies specializing in innovation in financial regulation.
- Investment of £83m in fintech companies focused on regulatory innovation in the last 12 months.
- Confirmed government and industry support to accelerate innovation in regulation enabling the establishment of the Financial Regulation Innovation Lab.
Nicola Anderson, CEO of FinTech Scotland, said: “By enabling collaborative innovation across the fintech ecosystem, not just in Scotland but across the UK and beyond, we can see how the FinTech Research and Innovation Roadmap is already making a real difference – to help businesses build economic growth, create jobs, work through climate finance to enable a future net zero economy, and help alleviate the cost of living crisis.”
Charlotte Crosswell, head of the Center for Finance, Innovation and Technology, said: “The UK Fintech Sector Review set out clear recommendations to ensure the country retains its global leadership position in financial innovation.
“A key component of this success is increased investment in fintech, and ensuring the brightest minds across the UK are involved.”
Jane Martin, chief executive of innovation and investment at Scottish Enterprise, said: “Strong, effective and targeted collaboration between industry, academia and the public sector is key to delivering much-needed innovation and growth for Scotland.
“The FinTech Research and Innovation Roadmap is a demonstration of how collaborative action through targeted strategic action can drive good financial results and accelerate future growth.”
Frank Gauld, CEO of Smart Data Foundry, which sponsored the roadmap, added: “The roadmap focuses minds and provides a clear industry view of innovation priorities.
“Over the past year we have worked closely with FinTech Scotland, promoting research and innovation to unlock the power of financial data to improve people’s lives across society, the economy and the environment.
“Examples include our work with the FCA to innovate on APP fraud, research into consumer vulnerability in the pensions market, the impact of late payments on the SME market, and working with Bankers for Net Zero to support the transition to a zero carbon economy initiative.”
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