UK fintechs, particularly Scotland’s growing sector, are robust post-epidemic and post-Brexit. Discover how FinTech Scotland is leading innovation and making Scotland a worldwide fintech centre.

After the epidemic, UK-based fintechs had to deal with difficult economic conditions, employment issues, and the realities of post-Brexit concerns. Many had close calls when Silicon Valley Bank collapsed. The UK, the “fintech capital of the world,” has persevered despite a slowdown in fintech funding, in part because of England’s fintech centers, particularly Manchester and London. How long, though, will Scotland’s fintech sector remain unnoticed?

The Scottish fintech industry has no intention of becoming stagnant. FinTech Scotland, a single independent cluster organization, was created to support the establishment of the nation as one of the top five worldwide fintech hubs.

The group released its strategic FinTech Research and Innovation Roadmap in March 2022, detailing how targeted innovation and research and development (R&D) may help the UK as a whole advance its fintech goals.

Roadmap accomplishments after a year

After the roadmap’s release a year ago, Scotland’s fintech industry has already seen development and improvement.

The strategy aims to create over 20,000 new jobs related to fintech by the conclusion of the specified ten-year term. It also outlines a target to raise economic gross value added (GVA) through innovation in fintech from £598 million now to £2.1 billion by 2031.

FinTech Scotland’s assertion that it is “on track” to reach these economic development goals shows progress. Scotland invested almost £83 million in financial regulation fintech startups last year.

In a year of economic uncertainty, open banking fintech companies increased by 26%, Scottish payment fintech companies increased by 19%, and climate finance fintech companies doubled.

“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 help to alleviate the cost of living crisis,” said FinTech Scotland CEO Nicola Anderson.

“The FinTech R&I Roadmap demonstrates how collaboration and innovation can change people’s lives, driving positive outcomes for both business and citizens both in Scotland and throughout the UK,” the report adds.

Rivalry with London

In March 2023, Jeremy Hunt proposed 12 new investment zones, including one in Scotland, Wales, and Northern Ireland. Each zone receives £80 million over five years. Hunt highlighted the move to “supercharge growth” in the UK and pledged £100 million to boost research and development centers in Glasgow, Manchester, and the midlands.

Despite these plans’ support for Glasgow, more must be done to expand Scotland’s fintech environment. Scotland must work hard to catch up to England’s capital.

DollarWise CEO Jack Prenter thinks Scotland would lose market share and jobs if London-based fintech businesses dominate the UK market. Scotland must invest more in this industry to compete with London. It’s back.

To succeed in this industry, Scotland must become a desirable place for great talent to live and start businesses. Develop ideal work environments with incubators and universities. If not, talent will relocate to California, London, and New York.

Scotland needs a strong venture capital and investment business. Scottish entrepreneurs will stay and build great enterprises if finance is available. Bringing VC finance to Scotland will make it easier to find and invest in new fintech startups, making it the most important step in making Scotland a fintech hub.

“A maturing of Scottish fintechs”

Thomas Gillan, CEO of Edinburgh-based payment orchestration platform BR-DGE, listed opportunities Scotland can seize to boost economy. “North of the border, there is a thriving fintech sector thanks to Scotland’s rich history in financial services,” he said.

“Our world-class university system supports our extensive talent pool, and our founders now have high aspirations for global expansion. Scottish fintechs should mature in the next years as the ecosystem develops and assumes a prominent position in determining the direction of global finance and technology.

“Several characteristics that speed up the ecosystem’s expansion are the motivation for this goal. Numerous prosperous start-up incubators provide creators with the necessary resources to create innovative products and get early financing.

Firms are also helped by increased public-private sector cooperation, the university system, and cross-sector projects like Converge, Edge, and Fintech Scotland.

Scottish Development International and Global Scots are important global growth friends for founders. Hybrid working has also helped companies recruit talent and expand in Scotland.

Room for improvement

Despite the fact that Scotland clearly has promise, Gillan emphasized the fact that more has to be done to promote growth and identified the regions that might require the most assistance.

“While the groundwork is in place for future growth, there is still room for development,” he said. VCs and angel investors are excellent partners for early-stage businesses. For businesses in Series A and B and beyond, there is a later-stage investment gap with a small pool of investors. To support the expansion goals of Scotland’s fintech innovators, the later-stage venture capital market in Scotland must be strengthened. The founders I meet with likewise have lofty goals, but Scotland’s fintechs should brag more about their achievements. If not, worldwide peers will definitely exceed the country’s clusters.

“Scotland’s fintech sector is poised for future growth and success, according to the report. Scotland has a lot of untapped potential to become a fintech capital.

Scotland’s Fintech Sector
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