As Daily Business revealed...
‘Fin-Spark’ hub aims to help build fintech sector
A specialist ‘hub’ to help nurture the nascent fintech sector will open in Scotland this year, confirming an exclusive report in Daily Business last October.
The hub, to be launched in May, will be backed by the UK and Scottish governments and will be based in the Entrepreneurial Spark offices at Royal Bank of Scotland’s headquarters in Edinburgh.
Fintech is a growing sector, estimated to be worth up to £6.6 billion to the UK economy. The hub will bring together industry leaders and networks in Scotland.
It encompasses innovation in financial services including e-banking, payment technologies, peer-to-peer lending, crowdfunding, digital currencies such as bitcoin, and ‘robo’ advice – automated investment advice delivered using algorithms.
Fintech is the current buzzword in the digital industries, though opinion is divided on its impact. While some boast that Scotland, and Edinburgh in particular, has already built a significant presence in the sector, more sceptical voices say there are no more than a dozen truly fintech businesses in the capital.
One source told Daily Business that some estimates are defining fintech too broadly, thereby making it appear bigger than reality. He said: “Some people are counting firms that simply come up with a piece of software that helps cut down on costs or makes an existing process a bit simpler. A true fintech firm is disruptive and completely changes the way things are done.”
There are others who fear that fintech will be more of a destroyer than a creator of jobs as it seeks to automate more labour intensive work, especially back office functions in banks and other financial services businesses.
Even so, most agree that fintech will be part of the digital future and the so-called ‘Fin-Spark’ will be an addition to Scotland’s enterprise armoury.
David Ferguson, entrepreneur and chief executive of financial services platform Nucleus was one of two Fintech Envoys appointed last year by the UK government to foster greater collaboration in the sector.
Speaking about the creation of the hub, he said: “It’s great to see larger companies engaging in fintech and supporting the growth of emerging businesses. Important lessons can be learnt on both sides and that should only be positive for everyone involved.”
The other envoy appointed by Economic Secretary to the Treasury, Simon Kirby, is Louise Smith, RBS head of design. She said the fintech sector has “huge potential for our economy” so it is “essential” that these entrepreneurs “are given all the support they need to ensure Scotland is at the heart of the fintech revolution.”
Lucy-Rose Walker, CEO of Entrepreneurial Spark said: “The new space is the first of its kind and will be a centre of excellence right at the heart of the financial services sector in Scotland.”
First Minister Nicola Sturgeon said: “Scotland is already playing an active role in the fintech sector and the strategy will further enhance our standing, both nationally and internationally.”
The fintech initiative has been fully embraced by Scottish Financial Enterprise whose chief executive Graeme Jones has been at the forefront of developing the hub.
“The creation of a dedicated fintech hub represents a huge leap forward in Scotland’s ambition to become a leading, global fintech centre,” he said.
“This first dedicated fintech hub is the beginning of what we hope will be a network throughout the whole of Scotland, offering a range of opportunities to companies large and small, and the ability to fully integrate with the wider industry. Congratulations to Entrepreneurial Spark and Royal Bank of Scotland for making this first exciting step possible.”