Unleashing Fintech as a Driving Force for Economic Recovery
An independent review of the fintech commissioned by HM Treasury has highlighted the important role fintech can play in driving economic recovery by creating jobs, developing global trade and enabling financial inclusion.
FinTech Scotland along with fintech bodies across the UK contributed to the Fintech Strategic Review (FSR) recommendations which sets out a five-point plan to leverage innovation through a positive regulatory environment, developing diverse skills, facilitating investment to scale enterprises and accelerating a targeted approach to inward investment.
The detailed data-driven analysis of fintech innovation across the UK gave recognition to the momentum of the FinTech Scotland cluster, which included growing expertise in open finance, payments, regulatory innovation (RegTech) and “Fintech for Good”.
The Fintech Scotland cluster model was noted as a driving force since formation in 2018, progress over three years which has included,
- Entrepreneurial Growth, increasing number of fintech SME firms from 26 to 155 today
- Innovation Excellence ”“ collaboration to establish Global Open Finance Centre of Excellence in 2020
- Strategic Engagement ”“ 27 strategic partners from private, public, academic sectors
- Practical Collaboration ”“ developing mutual opportunities with UK colleagues in the Fintech National Network
- Global Recognition ”“ European cluster centre of excellence accreditation in 2020
Stephen Ingledew, Executive Chair of Fintech Scotland and a member of the FSR working group commented,
“Fintech has the potential to revolutionise how we live whether it’s paying for our shopping or managing our money or setting up a business”
“Crucially, it can play a pivotal role in stopping the exacerbation of economic and social inequalities. Fintech innovation is fast growing right across the UK and offers great potential for Scotland through investment, innovation and jobs.”
“We have been fully involved in the Review to share our learnings from the last three years, in which we’ve managed to build an inclusive and vibrant cluster, a model which The Review recognises can help foster innovation and collaboration in boosting recovery of the UK economy”
“ We believe the Review recommendations will support further progress in developing a growing fintech ecosystem and build on successes of home grown and international fintech firms already rooted in Scotland”
Linda Hanna, interim Chief Executive of Scottish Enterprise said:
“This independent review supports Scotland’s growing worldwide reputation as a leading fintech location. Scottish Enterprise has been proud to partner with FinTech Scotland in developing a vibrant environment that continues to attract international fintech firms from around the world, providing economic opportunities for our communities and high-quality jobs for our skilled workforce.”
James Varga, founder of Direct ID and Loral Quinn, founder of Sustainably also contributed to the FSR and welcomed the recommendations on behalf of the fintech community.
James Varga said,
“We have known for some time that Fintech has been one of the fastest growing parts of the economy driving innovation across the country and the findings of this report illustrate why the future of fintech is very bright indeed and, with the right drivers, can continue as one of the UK’s biggest success stories.”
Loral Quinn said,
“The FSR is a boost for fintech entrepreneurs across the country and the package of recommendations will enable innovative small and medium enterprises to accelerate growth nationally and globally”
Deloitte co-led the FSR National Connectivity Chapter with Tech Nation, undertaking a comprehensive data- driven analysis of the sector across the UK. Kent Mackenzie, Head of Fintech in Scotland, said
“the detail and data contained in this review will underpin and support what we’ve understood for a long time ”“ that fintech across the UK is alive and kicking, and primed for next stage of scaling’”.
The full report is available here
Glasgow-based Commodities Marketplace Closes €125k Round
Tech start-up BLK Global, that undertakes to help SMEs slash their procurement costs by connecting them directly with raw material producers, successfully raised its pre-seed round shortly after delivering proof of concept and entering the post-revenue stage.
“Today we’re thrilled to announce BLK Global’s partnership with Enry’s Island Srl”
Gabriele Dadò, Founder and CEO of the UK’s first raw materials marketplace.
Enry’s Island Srl (EI) is one of the most prominent Italian accelerators. As part of the deal, EI will be providing an ad hoc acceleration programme for BLK Global, with a dedicated team across four key business units, together with Enry’s Model™ Organisational framework. This means no runway issues, best business practices derived by over 15 years of entrepreneurial experience and the ability to scale up very rapidly thanks to EI’s remote team.
BLK and EI entered into discussions late in November 2020, and the terms of the deal were finalised and agreed just before the year was out.
The raise was made possible by HUI, an ERP platform for start-ups and investors.
Gabriele Dado explained:
“We chose HUI because it guarantees extreme transparency for investors which was key for us. The platform also displays detailed, real-time KPIs that enable them to make informed investment decisions whilst reducing risk. It only took 3 weeks for Enry’s Island to find us on HUI and make an investment decision
“The partnership with Enry’s Island allows us to achieve the right corporate structure, review our medium and long-term strategy so as to position ourselves as true enablers, especially during a very challenging time for business in the UK and Scotland.”
According to the Scottish Annual Business Statistics, Scotland imports over £25 bn of goods yearly. If just 1% of these were to be sourced locally, not only would it add £250 m to the Scottish Economy, supporting over 1,300 jobs; it would also remove 500,000 tons of CO2 from the atmosphere, in a decisive step towards the net-zero objective pursued by the Scottish Government in the fight against climate change.
“Our vision is enabling small and large businesses alike to be seen, connect and compete.”
“Just like e-commerce has revolutionised retail, it will revolutionise the trading of raw materials. It’s not a question of if. It’s a question of when.”
Says Gabriele
“And together, the answer is now.”
UK Government picks AutoRek for US roadshow
Scottish fintech company, AutoRek has been selected by the UK Government’s Department for International Trade (DIT) to showcase the best in British innovation during a US roadshow.
The DIT’s RegTech Roadshow will take place virtually between the 22nd and the 26th February 2021 and provide ten innovative innovative firms the opportunity to meet industry stakeholders, regulators and potential partners. AutoRek was chosen after a very competitive selection process.
Commenting on the accolade, AutoRek CEO, Gordon McHarg, said,
“Joining the trade delegation, with other leading regulatory innovators is an exciting and invaluable opportunity for AutoRek to demonstrate our services. We have proven success in the UK and are accustomed to working with global financial services firms and are looking forward to helping revolutionise the way US companies manage risk, compliance and regulatory change.”
Kunal Khatri, Director for DIT North America, said,
“The UK has been at the heart of the global financial services innovation for decades, and in 2021 we will continue to lead the global FinTech and RegTech revolution. We’re excited to showcase the talent and expertise that UK companies have to offer. This roadshow is a great opportunity to deepen our bilateral engagement on financial services with the US and encourage private sector collaboration to make the world a safer, easier, and more equitable place to do business.”
AutoRek further strengthened its US offering by signing a partnership with iSoftware4Banks in November 2020. With AutoRek’s growing clientele – together with the nine other roadshow representatives, these companies combined service nearly every major top tier bank.
Fintech For All in Scotland
Today FinTech Scotland and Scottish fintech firms have signed the FinTech For All charter.
The charter is an industry led initiative to promote diversity and inclusion in fintech. It was established in 2020 and is a commitment to use diversity and inclusion as a force for innovation and growth. The work is led by InChorus and is supported by a steering committee of members from the Financial Conduct Authority, Innovate Finance, FinTech Alliance and Level 39.
Signing the pledge reinforces the culture of inclusion across Scotland’s FinTech Cluster. Alongside the cluster management organisation, 23 fintech firms based in Scotland have also signed the pledge and commit to making fintech a sector where diversity is encouraged and businesses continue to build inclusive cultures.
By signing the pledge, the Scottish fintech community became the biggest contingent of signatories since the pledge was launched, reaffirming that fintech is a force for good.
Amongst other things the charter aims to:
- Support FinTech’s in promoting diversity and building inclusive environments
- Ensure the at least one member of the senior team is accountable for Diversity & Inclusion
- Develop employee awareness around what constitutes inclusive practices
The signatories include Scotcoin, DirectID, Gcex, Polydigi, Nude, Float, Exception, Pour, Bellrock, Level-E, Amiqus, LendingCrowd, Zumo, FastPAYE, Caseblocks, Broker Insights, WomensCoins, Hubb Insure, Blockchain Technology Partners, Gobbill, Modulr, Lightbox Rewards
Nicola Anderson, CEO at FinTech Scotland said:
“FinTech Scotland was established in 2018 around the values of innovation, collaboration and inclusion. The FinTech for All charter aligns to those values and demonstrates the ongoing commitment for diversity and inclusion. The FinTech Scotland cluster creates an environment of connection and belonging, welcoming a wide range of diverse participants and we’re stronger for it. Scotland has a strong reputation for FinTech for good and we’re looking forward to seeing this continue to grow. “
James Varga, CEO at Scottish fintech DirectID said:
“The FinTech community is crucial to the success of tech within the UK, and we must show leadership in every area we can ”“ including in our workplace culture”.
“As a company DirectID has taken steps to ensure that all employees have an equal voice, and an environment where colleagues are free to speak up. We encourage breadth of contribution and inclusion is vital to our future success. The culture within the company is very important to us, and one we have taken years to foster.”
Phyl Meyer Head of Business Development at Inclusion Scotland said:
“There is widespread recognition that we need to do a lot more to ensure people from all parts of society aren’t excluded from employment. We know from experience that it’s real action that counts, which is why we welcome ambitious efforts to make meaningful progress such as those being taken by Fintech Scotland, recent hosts of one of our Inclusion Scotland internships.”
You can join the movement by visiting the InChorus’ website
Sustainably’s Subscription-Based Service for Good.
Scottish Fintech Sustainably has developed a subscription-based service which enables the opportunity for customers to automatically donate whenever they shop.
How does it work?
The fintech has created a method of philanthropy accessible for the everyday person with a busy life. Branded as ‘smart-giving’, the launch has two notable features.
- Round Ups, which uses open banking to micro-donate spare change.
- Monthly Happiness, which allows the user to donate monthly and see the immediate of said donation.
Individual users face no charge for utilising the service. Charities are offered a no donation, no fee service in exchange for a new income stream and anonymised supporter shopping trend data.
“We started with the idea of creating a product where doing good was effortless. We examined urban lifestyles. Every aspect of the app has been created to enable people to give in seamless ways, and see their impact.” Loral Quinn, Sustainably co-founder.
You choose a charity and connect your card in the app. Then you get impact points and levels to show the difference you’re making. Impact points will become a currency in the future for loyalty rewards from your employer and the retailers you shop at. Sustainably reward doing good so you get that do good, feel-good feeling.
How has it Evolved?
Sustainably is the brainchild of Loral Quinn and Eishel Quinn. They teamed up with Mark McLauchlan who was formerly head of technology architecture at RBS/NatWest. E-commerce has experienced accelerated growth during Covid19, with Sustainably reporting a 60% rise in organic growth in the past six months.
Our innovative giving tech is designed to make it easy to give, and track your impact without sharing your personal details so you can give on your own terms. Research shows that gen Z and millennials are the largest giving segment. “86% of Gen Z and millennials (the UK’s biggest givers) want to donate via mobile and see their impact. And while 50%+ of donations are still made in cash, we live in an increasingly cashless society. People want to give with privacy, transparency and control.” says Eishel Quinn, the other co-founder of Sustainably.’
With links to 17 banks, you can choose a cause and connect your bank account to the Sustainably app. You start making a difference as soon as you shop on your card/connected device. The app allows you to track your impact as well as pausing/modifying donations and setting donation limits. The minimum donation is £5 and supporters get instant impact updates showing the difference they’ve made when they donate.
“With Sustainably and our giving tech, we’ve set out to enable people to contribute towards something important everyday and see their impact, with their spare change. The majority of Sustainably users are 18-35 year olds and they want to buy from and work for companies who do good.” Notes Eishel Quinn who spearheaded the product development.
Sustainably currently support over forty good causes, ranging from removing plastic from oceans to teaching young girls how to code. And for 2021, any UK registered charity is able to sign up to Sustainably’s services.
How is it Changing Everyday Philanthropy?
The current landscape for giving is large but very fragmented. This ranges from sponsoring your friends, choosing causes for retailers to support or making regular donations to many different causes.
“We’re creating one place for all your giving, which manages your tax and tracks your impact.” says Quinn.
In addition, Sustainably never shares any of your personal data. You’re able to donate with the confidence that you won’t be contacted by any additional third-parties looking for further donations. In addition, with Covid19 cancelling so many fundraising events, Sustainably has been able to not only provide a new daily income stream from cashless transactions but has enabled charities to connect and engage with a younger demographic.
Sustainably is crowdfunding to get more users and charities and launch its B2B platform this year to enable brands to give to causes their customer and employees care about in a simple, connected way.