Increasing adoption of technology is driving the rapid development of the fintech sector from being barely recognised to becoming one of Scotland’s fastest growing industries.

New figures reveal that since the launch of FinTech Scotland in 2018 there has been a tenfold increase in the number of fintech SMEs to 200. Employment in the sector grew by 8% in the last year alone to more than 11,300.

FinTech Scotland, initially led by Stephen Ingledew, who is now its chair, was established jointly by the financial services sector, universities and Scottish Enterprise to develop a cluster of companies around financial services and technology.

FinTech companies are ‘enablers’, focused on technology that serves financial processes, such as mobile banking, data transfer and cybersecurity.

A significant cluster development in 2024 has been Fintech Scotland’s implementation of the Financial Regulation Innovation Lab (FRIL) which has delivered £18m of investment for the region in its first year.

This has been achieved by bringing together 25 financial and technology institutions from across the UK to address more than 20 industry challenges, attracting local and global fintech SMEs to create new products.

Nicola Anderson, CEO at FinTech Scotland said: “Our cluster initiatives are delivering a positive economic outcome through more jobs, investment and innovative SME businesses.

“The Financial Regulation Innovation Lab highlights our leadership in using collaboration and technology adoption to deliver this growth and shape the future of financial services.”

Jackie Leiper, chief customer officer at Lloyds Banking Group: “There’s a real buzz around the fintech sector in Scotland and Lloyds Banking Group is thrilled to be a part of that. We’re working hard to drive more digital investment here which will help us to build new skills and capabilities and make the country a global destination for financial services tech talent.”

SNP MSP Michelle Thomson hailed the figures as further evidence of the success of Scotland’s evolving economy.

“Scotland is a natural place for the fintech industry to flourish with our long-established financial services industry and world leading universities.

“We have leading experts in a wide range of fields including data, cyber security, artificial intelligence, machine learning and blockchain.  

“From data research and management services to AI initiatives and cyber security, the fintech sector in Scotland is one of innovation and opportunity.

“The SNP Scottish Government has made economic growth one of its key priorities and has set out a budget with transformative investment proposals to continue to grow the economy.”

Catherine Martin, vice-principal corporate services at the University of Edinburgh, said: “As a founding partner of Fintech Scotland, we are proud to be an active participant in the cluster and to support its impact by leveraging our world-renowned expertise in data-driven innovation, and interdisciplinary research to address real-world challenges in finance.”

Jane Martin, managing director, Scottish Enterprise, added: “The remarkable growth of Scotland’s fintech sector reflects the strategic efforts by the whole cluster to develop a thriving innovative environment. Scottish Enterprise has been supporting this journey by providing early-stage investment and facilitating international market access”.