SDI: FinTech opportunities in Scotland

In this video from Scottish Development International Stephen Ingledew of Scottish FinTech and Modulr’s chief financial officer Chris Brooks provide an overview of the Scottish FinTech sector.

What is FinTech?

FinTech is a portmanteau of the two terms “finance” and “technology”. It is an umbrella term for innovative technology-enabled financial services and the business models that accompany those services. FinTech is used to define a new tech that seeks to improve and automate the delivery and use of financial services.

It also ​​​refers to the use of advanced technology to supply financial services to consumers and businesses — from buying and selling cryptocurrency to authenticating electronic payments. It can take the form of software, a service, or a business that provides technologically advanced ways to make financial processes more efficient by disrupting traditional methods.

In some cases, it includes hardware, too like smart, connected piggy banks or virtual reality (VR) trading platforms.

The FinTech industry is composed of companies that use technology to make financial services more efficient. It includes any company that provides financial services through software or other technology and also includes anything from mobile payment apps to cryptocurrency.

What does FinTech do?

Some fintech developments have improved traditional services, for example, mobile banking apps, while others have revolutionized services such as pay per mile car insurance or creating new products, such as Bitcoin. From mobile banking and insurance to cryptocurrency and investment apps, fintech has broad applications.

FinTech is currently helping companies, business owners, and consumers to better manage their financial operations utilizing specialized software and algorithms that are used on computers and, increasingly, smartphones enabling financial services that can make online transactions and gain access to insurance or credit.

Some of FinTechs traditional uses are crowdfunding platforms (Patreon, Kickstarter, GoFundMe, etc), blockchain and cryptocurrency, mobile payments, insurance, robo advising and stock trading apps and budgeting apps, online lending business and RegTech (regulatory technology).

Video Summary

In 2018 FinTech Scotland set out with an agenda of three parts, developed through three circles namely FinTech Cluster, FinTech Collaboration, and FinTech Community.

FinTech Scotland works for both consumers and businesses to improve the outcomes and build a participative cluster involving people and organizations from across Scotland. It has 136 member firms and 15 firms in the process of joining, a rapid growth from 26 at the beginning in 2018.

FinTech examples from across the world operating in Scotland include Modulr, Avaloq, Agrud, Encompass, FNZ and Gobill. FNZ is one of the most famous FinTech firms, with its HQ situated at Edinburgh.

The innovative FinTech community is reinventing financial services through financing, access, protection, affordability, engagement, giving, literacy, identity, community, payments, and cash flow. FinTech is also reinventing the regulatory landscape to improve the outcomes for both businesses and customers. FinTech does not only have a reputation in banking and insurance but also in capital markets.

It’s also responding to COVID 19 challenges. The global pandemic has accelerated the adoption of new technologies and the demand for innovation. They are helping businesses to improve themselves and become sustainable at speed and to adapt into the digital world.

FinTech Scotland is connecting the community by learning and supporting each other through innovation, driving outcomes, building impactful collaboration and an inclusive cluster, addressing regulatory priorities through progressive engagement and focusing on challenging issues of the environment.

The cluster is developing global engagement with the help of UK International FinTech Development, FinTech Global Trade Missions, European FinTech Collaboration Group and European FinTech Cluster Excellence.

In 2019 Fintech Scotland celebrated Scotland’s International Fintech Festival, sharing financial innovation around the world, and received ‘Scotland’s Fintech Cluster Achieves European Excellence Recognition’ in January 2020.

Recently they released a report proposing plans for increased research and innovation to drive acceleration in fintech development across the UK.

Modulr

Modulr is a payment alternative for digital businesses, enabling end to end payments through three core services namely automate, embed and launch. Modulr maximize payment efficiency across the receivables payables collections disbursement etc. It helps people to build new banking or new payment services.

Modulr was founded in 2016 in London, with the CEO, leadership team, investors and funding team working from London. Modulr raised £43 million funding and moved to Scotland in June 2020 and since then has accelerated growth in Edinburgh to 120 people.

It has enjoyed a massive success through moving to Scotland. Modulr was awarded a £10m ‘Government Banking Innovation’ grant, and moving to Edinburgh empowered Modulr through a skilled workforce, customers, strong professional services and support, economics, and through a small and well-connected ecosystem and financial services and tech market.

Modulr grew quickly in Edinburgh because the city has major banks, a strong FinTech network and fantastic platform that enables companies with ambitions to grow rapidly. The challenges in Edinburgh were a competitive talent market, limited flexible office options in central Edinburgh, the availability of Scottish funding and the challenge of managing split locations whilst growing quickly.

Modulr managed the distance challenge by ensuring solid governance, established processes and procedures, communication, technology, agility and leadership.

Video Timeline

0:00 Introduction
7:38 Fintech in Scotland
10:00 Developing Fintech Opportunities (Innovative Community)
17:25 Impactful Collaboration – Developing Innovation in Scotland
21:00 Inclusive Cluster – Developing Global Engagement
25:55 What does Modulr do?
30:00 Journey of Modulr
42:47 Challenges in Edinburgh
50:55 Q&A