One year on, the FinTech Research & Innovation Roadmap is driving FinTech growth in Scotland

A year on from the publication of the FinTech Research and Innovation Roadmap, FinTech Scotland today announced that it is on track to meet its economic growth targets.

In March 2022, FinTech Scotland, the independent cluster body, published a strategic FinTech Research and Innovation Roadmap, which identified industry priorities for the UK to accelerate its fintech ambition through research and development (R&D) and targeted innovation.

Developed in close collaboration with fintech entrepreneurs, the financial sector, academia, regulators, public bodies and consumer groups, the roadmap provides a pathway and action-oriented framework to increase the positive impact of FinTech Innovation across Scotland and the UK.

The roadmap also supports the recommendation in the Kalifa Review of UK Fintech, for increased R&D investment in fintech innovation to accelerate fintech cluster excellence, and was positively welcomed by Ron Kalifa, the financial sector, the UK and Scottish Governments and the City of London Corporation.

The priorities in the roadmap centered on four strategic innovation themes:

• Climate finance
• Open financial data
• Payments and transactions; and
• Financial regulation

Over a ten-year period, 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. These collaborations, at the forefront of innovation, drive results. 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 UK customers towards carbon efficiency
• Climate finance enabled through cross-sector collaboration with Space Scotland, accelerating innovations in ESG 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 build greater engagement and support customer wellbeing, driving greater financial inclusion
• Smart Data Foundry’s research on pension market vulnerability, the impact of late payments on the SME market and on the net zero agenda, all enabled through Open Finance 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 courses in crypto-finance, blockchain and distributed ledger at leading Scottish universities

Financial regulation

• 13% increase in fintech companies specializing in innovation in financial regulation
• Investment of £83m in fintech companies focused on financial regulatory innovation in the last 12 months
• Confirmed government and industry support to accelerate innovation in financial regulation enabling the creation 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 – helping 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.

“The FinTech R&I Roadmap demonstrates how collaboration and innovation can change people’s lives, creating positive outcomes for both businesses and citizens both in Scotland and across the UK.”

Charlotte Crosswell OBE, Chair 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 in financial innovation. A key component of this success is increased investment in fintech and ensuring the brightest minds across the UK are involved. It is encouraging to see that in just one year the FinTech Research and Innovation Roadmap has enabled more of the important R&D collaboration and is in line with our approach at CFIT.”

Damian Nussbaum, Chief Executive, Innovation and Growth City of London Corporation, said: “FinTech continues to be a major success story for the UK and its development is critical to ensuring the UK maintains its position as a global financial hub. The UK has a unique innovation ecosystem where research and development play a critical role. The roadmap highlights the power and potential of the ecosystem and the transformative impact that collaboration in this sector can have across society. The City of London Corporation welcomes the progress made and we look forward to working with Scotland and the other nations and regions of the UK to drive fintech forward -growth.”

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 economic outcomes and accelerate future growth.”

Catherine Martin, Vice Principal Corporate Services at the University of Edinburgh, said: “As a founding member of FinTech Scotland, the University of Edinburgh is fully committed to the role R&D plays in developing fintech economic opportunities in Scotland and across the UK. Our experience and academic excellence in both disruptive technologies and other sectors have shown how strategic and targeted partnerships can shape the future direction of vital industries and sectors in our economy and society We are committed to playing our role as a leader and as a collaborator in fintech and financial services innovation, advancing the priorities of the FinTech Research and Innovation Roadmap.

Pardeep Cassells, head of securities and claims at AccessFintech, said: “Fintech innovation cannot afford to slow down. Technologies are advancing rapidly, customer expectations faster and the need for a fairer, more inclusive and more sustainable financial sector continues to be met. The FinTech community has welcomed the FinTech Research and Innovation Roadmap. It focuses the mind, helping fintech companies like AccessFintech to accelerate by understanding the points of convergence across the sector, which in turn enables more collaboration and innovation.”

Eleanor Shaw, assistant vice-chancellor at the University of Strathclyde, said: “Strathclyde is proud of its role in shaping the future of fintech. It was one of the first universities to launch an MSc in fintech in the UK. Very early on, we understood the importance of financial innovation to reinvent a sector that was built to benefit the many, not the few. R&D is the key and the roadmap is a fundamental tool. It has been a key component in advancing our fintech strategy at Strathclyde. As a result, we are working in partnership with FinTech Scotland, the University of Glasgow and industry to establish the Financial Regulation Innovation Lab, to drive innovation in financial regulation.”

Frank Gauld, CEO of Smart Data Foundry, which sponsored the roadmap, said: “When it comes to data and innovation, the potential is exciting and limitless. The FinTech R&I Roadmap focuses the mind 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. The insights are used across the industry and by regulators to change outcomes for people and businesses for the better.”