A NEW industry group designed to help Scotland capitalise on the rapid growth of ‘fintech’ – financial technology – is to be launched in Edinburgh this week. More than 30 specialists from companies including Royal Bank of Scotland, Aberdeen Asset Management, Standard Life and Swiss banking technology group Avaloq will join government and higher education representatives on the FinTech Strategy Group being set up by Scottish Financial Enterprise (SFE), the representative body for Scotland's financial services industry. Estimated to be worth £20 billion in annual revenues to the UK and employing 135,000 people, fintech encompasses innovation in financial services including e-banking, payment technologies, crowdfunding, digital currencies like bitcoin, and ‘robo’ advice – automated investment advice delivered using algorithms. Global investment in fintech businesses tripled last year from $4 billion to $12bn, and is predicted to reach $46bn by 2020, according to Innovate Finance, a City of London initiative to promote the sector in the UK. “The speed of development in financial technology is truly breathtaking and the industry in Scotland is well placed to be a serious global contender,” said SFE chief executive Graeme Jones. “The financial services cluster in Scotland is second only to London in the UK in scale and diversity, providing a critical mass to build on with the new developments created by fintech.” Investment manager Aberdeen Asset Management said it was buying, using and investing in fintech, including its acquisition last year of Parmenion Capital Partners, a Bristol-based robo advice specialist that delivers digital services to more than 900 adviser firms and has £2bn assets under management. “We’ve got a great opportunity in Scotland to really play in this market,” said Derrick Hastie, deputy global head of business systems at Aberdeen Asset Management and a member of the FinTech Strategy Group. “We’ve got cracking universities, we’ve got good professional services businesses, a strong industry base and accelerators like CodeBase (the UK’s biggest technology incubator), as well business angels and venture capitalists. So we have all the right components – it’s just about how we help that community grow.” Stephen Ingledew, managing director of marketing at Standard Life and another member of the group, said the insurer was using fintech to develop its online platforms, including the use of artificial intelligence to deliver a more seamless and personalised experience. “What’s really significant for Scotland is that we’ve got this ecosystem coming together of large financial institutions who are working together to bring new innovation and disruption to the financial sector,” Mr Ingledew said. “When you’ve got collaboration, you’ve got greater creativity. And with greater creativity comes more innovation.” Avaloq builds the software behind a wide range of banking processes and also provides an e-banking system for mobile, tablet and web platforms. It employs about 80 people at its research and development centre in Edinburgh is currently recruiting another 25 to 30. “Access to talent [in the fintech sector] is the main thing for us,” said Avaloq managing director Chris Zwicker, also a member of the strategy group. “For example, people from outside the EU might be able to study in Edinburgh, but they have a hard time getting a visa to work here. So we’re losing quite a bit out of the labour pool.” The FinTech Strategy Group is chaired by Royal Bank of Scotland’s head of design, Louise Smith, and aims to identify new fintech opportunities, map out employment needs and draw up a five-year strategy for success.
The Scottish Financial Enterprise (SFE) is setting up the FinTech Strategy Group, chaired by Royal Bank of Scotland’s head of design, Louise Smith, to explore fintech opportunities in Scotland. It comprises government and higher education representatives, as well as specialists from companies including Aberdeen Asset Management, Avaloq and the Royal Bank of Scotland. SFE chief executive Graeme Jones said Scotland’s financial services were “second only to London”, while Derrick Hastie, deputy global head of business systems at Aberdeen Asset Management, said: “We’ve got a great opportunity in Scotland to really play in this market.”