We sat down with Mickael Paris, Marketing Director of FinTech Scotland to find out more about why Scotland is such a shining example of pioneering FinTech activity…
Hi Michael. So, for the uninitiated could you tell us a bit about what FinTech Scotland is and what it does?
FinTech Scotland is just over 3 years old now. It was set up as a collaboration between the private sector, government and universities in order to give Scotland’s burgeoning FinTech industry a boost – to create more jobs, increase GDP, promote economic growth and help FinTech firms to develop and export their services. Historically, there’s a long list of financial innovations that are synonymous with Scotland. We’re here to carry on that tradition and make sure that Scotland is seen as one of the leading FinTech hubs in the world. Both by playing on our existing strengths and developing new ones.
Our country is home to some of the best universities for FinTech courses and adjacent topics. For example the first MSc in FinTech in the UK was started by Strathclyde University. Then there’s the EPCC (Edinburgh Parallel Computing Centre) a world renowned centre for excellence in high-performance computing. Not to mention the already existing FinTech ecosystem that held, and still holds, such great potential.
I think if you add all that together it’s almost unavoidable to notice Scotland. And that’s something we’ve tried to make sure of from the start.
And your role in all of this, what does that involve?
I’m a Marketing Director. So that means I’m busy looking after the FinTech Scotland brand and helping Scottish FinTechs raise their profile. Not only that but making sure that we can create opportunities for them too. Our focus is on the ‘3 Cs’… community, collaboration and cluster.
Community is about growing the number of FinTech firms in Scotland. Either through new firms being born or companies who are delving into the world of FinTech (perhaps an organisation that specialises in data or the blockchain for example). Then there’s companies moving into Scotland from overseas. We’ve had considerable global interest over the last few years. Organisations from Hong Kong, Singapore, the USA, Australia, New Zealand… from all around the world, really. This is due to many reasons but the most important one has got to be the talent that exists here. Our universities and the research capabilities that we have.
Collaboration is really about exploring ways that FinTech and large institutions (not necessarily financial institutions) can benefit from working with each other. FinTech is a movement as opposed to a ‘vertical’. In this sense it’s about matching up fast moving FinTech firms who are developing new ideas – and large institutions who have millions of customers and might need help to better serve them.
Then, finally, cluster. Last year we were recognised for our excellence in cluster management by the European Secretariat for Cluster Analysis. They work across all countries in Europe so naturally they’ve got a huge amount of knowledge and experience. We were the first FinTech cluster to be recognised in the UK, and only the third one in Europe. That’s something we’re incredibly proud of.
In terms of examples of how FinTech Scotland has positively impacted the industry – does anything in particular spring to mind?
Yes! Our work with Scottish Enterprise and the University of Edinburgh. We were successful in securing £22.5m in funding for the establishment of the Global Open Finance Centre of Excellence. It’s there to reinforce Scotland’s position as a leading hub for open banking and open finance. But more importantly we’ll open the cluster up to the world. People from all around the world can come here and help innovate and develop new solutions that benefit the many not the few. That’s a great win for Scotland and the sector as a whole.
FinTech Scotland is like a coach on the side of the playing field. What we’re trying to do is get existing actors within the cluster to develop their own initiatives. That’s the role played by our strategic partners. For example PWC are a great alliance when it comes to helping FinTech raise investment through their Raise Program. Then you’ve got Dentsu who created the FinTech Scotland website and Deloitte are helping us with the internationalisation of the cluster. There are many more examples, in fact each of all of our 30 strategic partners are playing their part. That’s why we chose them as partners.
From what you’ve explained already, it sounds like there’s huge international ambition within the kind of FinTech companies you work with?
Of course. Scotland’s FinTech scene is very much open to the world. We collaborate with 16 hubs in Europe via a network called the Talent Route. We’re also working with FinTech NZ, Tokyo, Japan, many hubs in the Middle East, Israel, the USA and Northern Europe. It makes sense for us to be inclusive. There are two main reasons for this; we want to attract companies, large financial institutions and investors looking for innovation. We also want native Scottish FinTech firms to export to the world… so it’s a two way street.
What do you see as the next most exciting developments for the cluster?
I’d definitely say open finance. It’s the biggest disruption since ATMs. Put simply, it’s the evolution of open banking. It’s about going beyond bank data and looking at one’s entire financial life to help them manage their money better, access better suited financial products and financial support.
Plus, open finance is a movement that’s not defined by borders – almost every new avenue or idea that comes under the FinTech banner has international potential.
What part is FinTech playing in the current COVID situation?
FinTech is already playing a big part in COVID recovery. It’s been very helpful in terms of digital payments – helping companies like banks to digitise their process and to help onboarding new customers for example. Then there are companies such as Striver, who are working to help high street shops who have had to shut down to keep generating cash through vouchers, or Inbest, who are allowing people to understand what benefits they are entitled to. It’s also going to help with inclusion. In a year, COVID has accelerated things that, before, would have taken five; people using contactless payments, banking apps, cashing a cheque with an app… it’s a situation that has forced these innovations. Not just here in the UK either. The global repercussions on banking are being felt all around the world – on a practical level (as with contactless payment limits being raised) and in terms of recovery.
Going back to the international aspirations of the FinTech scene, it seems that companies looking to export would need a linguistic edge to be able to compete abroad?
Absolutely. With the internet it’s a lot easier to transpose a product to a new location. Language and cultural awareness are important factors when entering a new export market. I wouldn’t call it a barrier, as it’s easy to overcome when working with localisation experts such as McFelder. It’s just something to keep in mind from a practical perspective. It’s also important to have a partner who understands the cultural differences. Different cultures use money differently. Germany is very cash heavy, the UK is very much digitised for example. So if you can’t get to grips with the nuanced differences like that exporting can be problematic. When partnering with a professional translation company on the other hand, you’ll guarantee on brand, localised communications from day one.
When it comes to exporting, how do FinTechs handle regulatory complexity?
Well, that’s exactly the reason why, here, we have companies like Scottish Development International… they help from both sides; those who wish to export from Scotland and foreign companies looking to develop a presence here in Scotland. We work with them to help FinTechs connect with the right people and make sure that they are not on their own. Our strategic partners also play a big part in helping exporting FinTech firms identify the right contacts. As ever, you need to commit a lot of time and energy into reaching a global audience. The regulatory side of things is just another area within FinTech operations in which it’s important to have a trusted translation partner.