How data and AI are fuelling Scotland’s fintech boom
Find out how Scotland’s strengths in data and computer sciences are boosting innovation in financial service technologies.
Scotland has a reputation for being one of the world’s leading fintech hubs, with a rapidly growing fintech cluster of more than 200 thriving start-ups and many established financial services providers.
Collaboration between research and industry
The range of innovative technology being developed at Scottish universities such as Glasgow, Edinburgh and St Andrews is a key factor driving the growth of the sector.
The Bayes Centre, for example, is the University of Edinburgh’s innovation hub for data science and AI. It’s home to several major financial institutions. Another example is abrdn — a global asset management company based at the Edinburgh Futures Institute.
The Edinburgh Futures Institute also collaborates with the University of Edinburgh on the Centre for Investing Innovation — a £7.5 million, five-year research project to address the challenges facing the investment and asset management sector.
‘As one of the world’s leading research organisations, the University of Edinburgh is working in partnership with a range of major companies across the UK finance sector,’ says Ksenia Grant, Director of Financial Services and Fintech Sector Engagement at the University of Edinburgh.
Initiatives driving fintech innovation in Scotland
The Bayes Centre is also home to the University of Edinburgh’s renowned AI Accelerator. The programme is run by the Bayes Centre Data-Driven Entrepreneurship (DDE) Innovation programme and Edinburgh Innovations — the university’s commercialisation service.
Through the AI Accelerator, start-ups and established businesses can refine their commercial propositions, develop their skills and connect their ideas to applications and operations in the real world.
Businesses can access the network – including corporate supporters, the Bayes Centre AI community, and data science companies of all sizes – as well as the broader tech ecosystem both in Scotland and, importantly, London as well.
The Bayes Centre at the University of Edinburgh
Similarly, Edinburgh’s Smart Data Foundry works closely with FinTech Scotland and the Financial Data and Technology Association to encourage innovation and collaboration.
Awarded £22.5 million from the UK government in 2020, the organisation provides a secure environment in which real consumer data from British financial institutions can be safely shared with organisations that are tackling the biggest societal, economic and environmental problems.
In addition, Scotland has been the setting for many successful initiatives run by major financial institutions. In 2020, Lloyds Banking Group began its Launch Innovation Programme alongside FinTech Scotland. Other big financial players such as TSB and Phoenix Group also operate innovation labs here.
Scotland’s fintech start-up scene
Scotland has always had a vibrant start-up scene, with many businesses taking advantage of collaboration and partnership opportunities in its tech cluster. FinTech Scotland’s 10-year Research and Innovation Roadmap has been designed to ensure this growth continues over the next decade.
Scotland is the second-largest recipient of fintech greenfield foreign direct investment (FDI) in the UK, behind London, accounting for just over 9% of total greenfield fintech FDI projects. Investors have cited access to talent, a thriving fintech scene and government support among their reasons for choosing to set up in Scotland.
In fact, 59% of fintechs in Scotland are currently at the start-up stage, and 28% are scale-ups. Some 8% have grown into large companies, while 1% are listed, 1% have been acquired and 2% are unicorns valued at more than £1 billion, such as the global investment platform company FNZ.
Many companies in Scotland’s cluster originally launched overseas but were drawn to Scotland’s thriving data and AI ecosystem and its pool of available talent. Of course, Scotland’s enduring appeal as a great place to live and work is often cited as a significant draw.
Of the companies that have relocated to Scotland, 41% originated in the US, 31% in Europe, 17% in Australia, 7% in Asia and 3% in the Middle East.
Other overseas companies are also choosing to tap into Scotland’s advanced data and AI innovation. Recently, companies such as YayPay and Pace AP from the US, WeFund from Australia and Pulse Market from Ireland have chosen Scotland as a base.
The development of joint initiatives between the industry and academia – aimed at innovation, collaboration and training the next generation of industry leaders – needs to be the priority for the future growth and continued leadership of financial services and fintech sectors.
Find out more about Scotland’s fintech sector
This article is provided by Scottish Development International : sdi.co.uk
