Blog: The infinite possibilities of FinTech



Sharon Hamilton
Sharon Hamilton

With its dual talents for finance and technology, Scotland is increasingly becoming the location of choice for businesses says Sharon Hamilton, international sector head of financial services at Scottish Enterprise.

 

These days the term ‘FinTech’ easily rolls off the tongue of anyone involved in financial services. In fact, it’s difficult to imagine the industry without technology these days – for the speed, efficiency, transparency and analysis it provides.

With a market currently estimated to be worth £20bn in annual revenue and growing, the UK and Ireland is the fastest-growing region for FinTech investment globally, according to a report published this year by the UK government chief scientific officer. Scotland is well placed to capture a strong share of this revenue.

Scotland has a highly-successful track record in financial services, renowned strengths in technology and innovation, a skilled workforce and easy links to London, all of which are enabling us to punch above our weight and remain the top location for inward investment outside London.

In fact, according to a survey by EY, 2014 was a record year for foreign investment into Scotland with scientific research and financial services well represented among the 80 new projects secured.

So what is it that sets us apart from other European locations? One example is Glasgow’s recent investment in becoming a smart city and technology hub. As part of a £24 million Future Cities grant awarded to Glasgow, pilot studies are being delivered to look into how everyday objects can talk to one another through a central data hub so the authorities can ease congestion and promote energy efficiency.

The connections to FinTech are not immediately obvious. However, big data analysis is currently one of the major drivers of the FinTech industry, helping banks and other financial institutions gain a far greater insight into their customers’ behaviour and market trends than ever before. Yet despite all the talk about big data, there’s still a gap between the demand and the ability to derive real business value. Many companies perceive the core problem is a shortage of data scientists – those rare individuals who combine business skills with technical expertise.

That’s where Scotland’s talent pool really comes into play. Companies investing here have access to a well-educated and skilled workforce, with an impressive ratio of graduates per capita. Initiatives such as Future Cities Glasgow and the Data Lab, a collaboration between industry, the public sector and world-class university researchers in Glasgow, Edinburgh and Aberdeen will help develop these new data science capabilities and attract pioneering new businesses. Already, clusters are growing around these hubs.

One such company attracted to Glasgow for these reasons is Encompass Corporation which provides visual information management technology to the insolvency and restructuring sector. In fact, the pull has been strong enough to lure their senior management team from Sydney to invest over £2.24 million in opening a new office in the city’s financial district, creating 23 new jobs. The investment is being supported by Scottish Enterprise through a Regional Selective Assistance grant worth up to £357,000.

It’s the first head office operation Encompass has established outside its Australian home market and marks the start of a planned period of expansion for the company across the UK and other international markets including the US.

The new Encompass office will be managed by Alex Ford, who told us: “We recognise Glasgow as a city focused on achieving its ambition of becoming a tech hub and smart city. We plan to use the grant to bring in highly-skilled staff from the rich local talent pool, take advantage of the city’s strong culture of cutting-edge research and capitalise on new commercial opportunities.”

Encompass is just one example of a number of dynamic companies looking to expand and grow in Scotland. The recent announcement by Avaloq of its intention to double its Edinburgh workforce is further evidence of the benefits Scotland can offer growing FinTech companies. Others such as CGI, Wipro, SAS and Cognizant have also increased their Scottish headcount recently.

Our thriving sector in Scotland makes it a ready-made market for incoming FinTech businesses. Together with our international arm, Scottish Development International, we can provide tailored solutions – such as grant funding, help to identify premises, support with staff recruitment, establishment of supply chains and partner networks - to support companies to grow and expand in Scotland.

Scotland is fast becoming a global centre of excellence for FinTech, attracting ambitious growing companies such as Encompass which will benefit from access to the best data science talent and research globally.