A year on from publishing the FinTech Research and Innovation Roadmap, FinTech Scotland has stated that it is on track to hit its targets for economic growth.
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 services sector, academia, regulators, government bodies and consumer groups, aiming to provide 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 laid out in the roadmap centred on four strategic innovation themes: climate finance, open finance 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 economic gross value add (GVA) through fintech innovation.
One year on, industry-led collaborations have driven growing action against each of the strategic innovation themes. Examples include:
Climate finance
- 100% increase in fintech enterprises in Scotland focused on climate finance.
- Accelerated fintech partnerships and fintech adoption through new innovation labs launched with Lloyds Banking Group and TSB with outcomes helping customers towards carbon efficiency.
- Climate finance enabled through cross-sector collaboration with Space Scotland, accelerating sustainable innovations using data from satellite sources.
Open finance data
- 26% increase in fintech enterprises developing innovative solutions using open banking.
- Accelerated fintech adoption and creation of commercial opportunities through the launch of Phoenix’s innovation forum to support the wellbeing of its customers.
- The Smart Data Foundry’s research on vulnerability in the pension market, the impact of late payments on the SME market and on the net zero agenda, all enabled through open data.
Payments and transactions
- 19% increase in fintech enterprises in Scotland developing payment solutions.
- Investment of £94m into fintech enterprises focused on payment innovation in the last 12 months.
- Development of crypto-finance, blockchain and distributed ledger courses at Scottish universities.
Financial regulation
- 13% increase in fintech enterprises specialising financial regulation innovation.
- Investment of £83m into fintech enterprises focused on regulation innovation in the last 12 months.
- Confirmed government and industry support to accelerate innovation in regulation enabling the creation of the Financial Regulation Innovation Lab.
Nicola Anderson, chief executive of FinTech Scotland, said: “By enabling collaborative innovation across the fintech ecosystem, not just in Scotland, but the whole of the UK and beyond, we can see how the FinTech Research and Innovation Roadmap is already making a real difference – helping businesses to build economic growth, create jobs, work through climate finance to enable a future net zero economy, and helping to alleviate the cost of living crisis.”
Charlotte Crosswell, chair of the Centre for Finance, Innovation and Technology, said: “The UK Fintech Sector Review clearly set out recommendations to ensure the country retains its global leadership position in financial innovation.
“An important component of that success is increased investment in fintech, and ensuring the brightest minds across the UK are involved.”
Jane Martin, managing director of innovation and investment at Scottish Enterprise, said: "Strong, effective and purposeful 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 purposeful strategic action can drive good economic outcomes and accelerate future growth.”
Frank Gauld, chief executive at Smart Data Foundry, which sponsored the roadmap, added: “The roadmap focuses the mind and provides a clear industry view on innovation priorities.
“In the last year we've worked closely with FinTech Scotland, progressing 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 in the area of APP fraud, research on consumer vulnerability in the pension market, the impact of late payments on the SME market, and working with Bankers for Net Zero to support the initiative to transition to a zero carbon economy.“
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