FinTech Scotland secures UK Government funding to Accelerate Innovation in Financial Regulation
FinTech Scotland has secured UK Government funding to accelerate innovation in Scotland’s fintech cluster. The funding will advance research and innovation in financial regulation.
The FinTech Scotland initiative in partnership with industry partners, and with Strathclyde and Glasgow universities includes the creation of a new collaborative centre of excellence, called The Financial Regulation Innovation Lab.
The ground-breaking collaborative Lab will focus on leveraging new technologies to accelerate efficiencies, revolutionise risk management and shape future regulatory developments, accelerating the UK’s ability to seize competitive advantage in the future of financial regulation and fintech innovation.
The new funding is part of a broader successful bid by Glasgow City Region included in the UK Government’s initiative to accelerate the growth of high-potential innovation clusters’ in Glasgow, Greater Manchester, and the West Midlands. All of the projects in the Innovation Accelerator Programme will commence in the Spring, following Innovate UK’s normal diligence.
The funding allocation to fintech in Glasgow demonstrates the national commitment to drive fintech innovation across the UK.
The Lab enables FinTech Scotland to deliver one of the strategic recommendations laid out in the FinTech Research & Innovation Roadmap, launched in March 2022 and aligns with the recently announced UK innovation initiative, the CFIT, formed in response to the HM Treasury FinTech Sector Review.
FinTech Scotland will work across industry leading the development of the Lab, with initial actions focused on
- A sandbox to test and advance fintech innovations that meet industry demand.
- A facility to develop new businesses with an accelerated path to commercial success.
- Industry driven academic research, advancing new deployment of tech in finance.
- A technology focused skills programme for risk and regulatory professionals.
- Researched, data driven contributions helping advance financial regulation policy.
Nicola Anderson, CEO at FinTech Scotland commented:
“I am delighted to see the commitment and recognition from the UK Government in the high-growth potential of fintech innovation in Glasgow. The Innovation Accelerator funding will help push this forward.
The Financial Regulation Innovation Lab is a ground-breaking initiative. It brings together, industry partners, fintech entrepreneurs, universities, and regulators to revolutionise the future of financial regulation and risk management through technology and data. The outcomes will shape jobs for the future and propel our fintech ambition, here in Scotland and across the UK. “
Charlotte Crosswell OBE, Chair at the Centre for Finance, Innovation and Technology (CFIT) commented:
“The development of the Financial Regulation Innovation Lab is an exciting opportunity both for Glasgow and for the UK.
We have significant potential across the UK to drive fintech innovation and realise our full fintech potential. Drawing on our regional strengths and bringing experts across the finance and technology ecosystem is key. This is our mission at CFIT, and we’re delighted to support FinTech Scotland as it continues to demonstrate its impact, identifying opportunities for fintech growth and working in collaboration to drive the Innovation Acceleration across the UK.”
Encompass unveils pKYC maturity model
Encompass Corporation has recently introduced a perpetual Know Your Customer (pKYC) maturity model, which aims to set a new standard for regulatory compliance to combat financial crime. The model has been developed by the pKYC Advisory Board, a group consisting of representatives from global banks and trusted data, technology, and consulting partners. It aims to evaluate financial systems and assess their readiness to identify and prevent financial crime by placing them in a pKYC framework.
pKYC is a desirable state for many in the banking industry, as it uses automation technology to detect risk more accurately and quickly, while also increasing operational efficiency without the need for more headcount or time commitment. Typically, financial institutions re-evaluate customer data every one, three, or five years, depending on the level of risk, leaving the door open for undetected activity to occur over long periods.
The pKYC maturity model evaluates financial institutions in five core areas: Policy, People, Process, Data, and Technology. These factors are then further broken down into subcategories and assessed against the four stages of KYC: Manual KYC, Early Automation, Mature Automation, or pKYC. This provides a benchmark to determine the institution’s readiness for pKYC.
Encompass is providing banks with the means to assess their readiness for pKYC, facilitate discussions among stakeholders, and evaluate the progress of their transformation journeys. They are offering advice and technology solutions to expedite the process. According to Howard Wimpory, KYC Transformation Director for Encompass, financial institutions need to adopt automation technology to avoid undetected financial risks, comply with regulatory requirements, and protect themselves and society against financial crime.
Encompass has also released an industry whitepaper titled Planning your journey to perpetual KYC, which offers a comprehensive understanding of pKYC and the core components necessary to achieve this goal.
Scottish fintech Biscuit Tin shortlisted for UK StartUp Award
Biscuit Tin, a startup based in Dunbar, Scotland, has been announced as a finalist for the Fintech StartUp of the Year award at the upcoming Scottish Final of the StartUp Awards.
The StartUp Awards aims to celebrate the thriving startup scene across the UK, which has seen a 4.3% increase in new businesses founded since 2021, totaling over 800,000.
The program received a record-breaking number of applications this year, with 1,100 firms shortlisted across ten UK regions, all of which were started in the last three years.
These startups have collectively created over 5,000 new jobs and generated annual sales of £584 million. Biscuit Tin, launched in 2020 by serial entrepreneur Sheila Hogan, is a personal, digital legacy vault designed to simplify life administration for individuals and their loved ones by creating a digital legacy.
The StartUp Awards are supported by several national sponsors, including Starling Bank, BT, and British Business Bank. The finalists will be judged by a panel of experienced judges, including entrepreneurs and industry experts. The StartUp Awards were launched in 2022 in collaboration with the team behind the successful Great British Entrepreneur Awards.
New solution for Pensions Dashboards onboarding
A consortium of four leading technology providers has joined forces to offer a comprehensive end-to-end solution for pension providers seeking to integrate into the UK pensions dashboards ecosystem.
The collaboration between Target Professional Services, mypensionID, Bravura, and Delta Financial Systems is designed to simplify the complex processes and regulatory requirements that providers face when connecting to the ecosystem.
Each firm specialises in a particular area of expertise to ensure a seamless journey toward dashboard readiness before the staging deadline. Target Professional Services uses its leading tracing capabilities to screen and cleanse member data while mypensionID verifies and traces individual members using a verification app tailored to the pensions industry.
Bravura and Delta then provide a jointly developed cloud-hosted Integrated Service Provider (ISP) solution for providers’ data, with a focus on configurability and compliance with the Pensions Dashboards Programme’s (PDP) Code of Connection. The four firms’ technical expertise and market knowledge combine to create a unique solution capable of addressing pensions providers’ urgent and specific needs.
Jonathan Hawkins, Principal Consultant & Pensions Specialist at Bravura, said:
“Delta, mypensionID and Target’s deep expertise and technical know-how in the pensions and data sectors, combined with our ability to process huge volumes of assets and trades on our systems, brings a level of reliability and scalability that pensions providers require right now.
“Pensions dashboards are a crucial step towards modernising and digitising the UK’s pensions sector and, with the clock ticking, pensions providers up and down the country need tech partners with proven scale and expertise. This unique collaboration delivers that solution.”
Photo by Andrea Piacquadio: https://www.pexels.com/photo/young-woman-helping-senior-man-with-payment-on-internet-using-laptop-3823488/
Strategic AI Investment Partnership in fintech Level E Research by M&G
Level E Research has announced that it has received a minority stake investment from M&G plc in its latest seed funding round. The two companies are collaborating to develop a suite of investment strategies using Artificial Intelligence (AI). The AI investment strategies will be focused on regional equity markets and will be supported by an initial investment of GBP £100 million each. The first strategy, AI Smart US, has already been launched, with the aim of outperforming the US S&P 500 Index. The other strategies will have a similar aim of delivering excess investment returns compared to specific financial indices.
AI investment strategies rely on powerful computers to analyse vast amounts of data to identify investment opportunities. They can uncover value in areas that are difficult for humans to recognise and execute investment decisions faster and more efficiently. Additionally, they benefit from economies of scale and scope, making them more cost-effective.
Edinburgh-based Level E Research, founded by Dr. Sonia Schulenburg, is pioneering an innovative approach to AI-driven investing using a process called “Co-Creation.” Institutional investors can use this approach to create bespoke AI-driven investment strategies that run on Level E’s in-house “E-platform.” The strategies are backed by rigorous academic research.
M&G and Level E Research aim to bring AI and Machine Learning to the forefront of investment management. Dr. Sonia Schulenburg, CEO of Level E Research, expressed her excitement about the partnership with M&G and stated that Level E Research is perfectly positioned to provide AI solutions that empower the investment industry in the UK and beyond. David Montgomery, Managing Director at M&G Wealth, emphasised that AI solutions are becoming increasingly important in constructing bespoke investment options and that the partnership with Level E Research will help to offer a wide range of investment choices at a great value to financial advisers and clients.
New Scotcoin reward programme
Scotcoin, a decentralised digital currency created to provide a secure and stable alternative to traditional fiat currencies, has recently announced its new Rewards Programme. This exciting programme is designed exclusively for Scotcoin holders and is a unique opportunity for cryptocurrency enthusiasts to enjoy significant savings on various products and services.
The Rewards Programme, which is the first of its kind, is aimed at providing an innovative approach to incentivising Scotcoin holders to continue holding and using the cryptocurrency. The programme offers a wide range of discounts, including significant savings on shopping, groceries, entertainment, theme parks, audiobooks, and online classes. By utilising Scotcoin as a payment method, users can enjoy these savings and support the growth of the cryptocurrency ecosystem.
One of the most remarkable features of the Rewards Programme is its affordability. For only 1,000 SCOT, users can access the programme and take advantage of the discounts on offer. The availability of such a low-cost programme is a testament to Scotcoin’s commitment to democratising access to its services and supporting its growing community.
The Scotcoin team’s dedication to social responsibility is evident in its recent partnership with Scotcoin Carbon Offset, which allows Scotcoin holders to use their cryptocurrency for carbon offsetting. By using Scotcoin for this purpose, holders can contribute to environmental conservation efforts while enjoying the benefits of the cryptocurrency.
The Rewards Programme is just one of the many exciting initiatives that Scotcoin is launching to promote the widespread adoption of cryptocurrency. With the increasing acceptance of cryptocurrencies worldwide, Scotcoin’s unique approach to incentivising users to hold and use their cryptocurrency could serve as a template for other digital currencies.
For cryptocurrency enthusiasts looking for an ethical and community-focused alternative to traditional fiat currencies, Scotcoin is the way to go. By participating in the Rewards Programme, users can not only enjoy significant savings but also contribute to the growth of a sustainable and socially responsible cryptocurrency ecosystem. To access the Rewards Programme, simply visit the Scotcoin website at scotcoinproject.com/rewards.
New identity verification standards for new home sales
The Home Builders Federation (HBF) has announced the launch of new and updated customer identity verification (IDV) and anti-money laundering (AML) checks following a successful 3-month consultation period run by Etive. The new process aims to improve the customer experience and align with emerging Government legislation and standards.
The HBF’s new process aims to eliminate the need for customers to show their ID separately to different parties throughout the purchase journey, reducing frustrations, costs, delays, and errors in the process. Customers will only have to prove their ID once during the home buying process.
The HBF consulted with 84 HBF members who responded to the survey, and one-to-one in-depth interviews were conducted with a range of different sized builders across the membership groups. The consultation helped the HBF develop an industry-centered set of rules that reflect good practices amongst home builders and ensure alignment to planned Government legislation.
The consultation’s output has led to the development of two new standards that go over and above the standards set out by DSIT to facilitate the selling of a home. The new standards are compliant with the DIATF and the HM Land Registry ‘safe harbour’.
Steve Turner, Executive Director of the HBF, said, “The new procedures are a huge step forward that will benefit both businesses and our customers and reduce delays, costs, and the opportunity for errors.” Stuart Young of Etive said, “A standard for IDV and AML will drive the industry towards higher standards, reducing the likelihood of money laundering and ID/property fraud, which can only benefit the sector, buyers, and the UK economy.”
The HBF is holding an online industry briefing session on Wednesday the 22nd March at 3 pm to provide further information on the new process. Those interested in attending can email Stuart at s.young@etive.org to receive details.
Photo by Dom J: https://www.pexels.com/photo/uk-driving-license-45113/
Encompass concludes UK North America Roadshow
On Friday, the Department for Business and Trade (DBT) concluded its North America Roadshow 2023 in Glasgow, marking the end of a 12-day tour that covered 12 UK cities.
The aim of the Roadshow was to promote export deals between the UK and the US and Canada, with experts delivering presentations and interactive sessions to offer guidance on exporting, trade negotiations, and the economic outlook.
Scottish fintech Encompass Corporation, a leading provider of the Know Your Customer (KYC) automation platform, was selected as a trusted partner for the Roadshow, representing both a prominent Scottish technology company and a North American success story since its expansion to the region in October 2021.
During the Glasgow session, Encompass representatives discussed the company’s active involvement in the UK Government’s efforts to promote UK financial services overseas, including a fireside Q&A session on FinTech opportunities in North America.
The event also featured practical advice from legal, banking, and tax industry experts on opportunities in the North American region, with the National Association of State Procurement Officials presenting on demystifying US State procurement.
Encompass has been serving the North American market since its regional launch in late 2021 and has experienced significant growth while operating from New York under President, North America, Alex Ford, including receiving industry recognition such as the AML Impact Award for Best Know Your Customer/Business (KYC/KYB) Innovation from Aite-Novarica Group last year.
Stories from female fintech entrepreneurs
To celebrate International Women’s Day 2023, we met with two female fintech entrepreneurs to hear about their stories, why they chose to become fintech leaders, their successes and challenges.
Ana Gallacher, founder of BabyReady Finance
Sheila Hogan, CEO and founder of Biscuit Tin
I am Sheila Hogan CEO and Founder of Biscuit Tin a “death-tech” SaaS business – we make life admin easier for you now and easier for those you love in the future by helping you create a digital legacy to be proud of. Biscuit Tin is a digital secure vault holding all your life information that is released to those you nominate when you die, providing them with the direction they need to easily and effectively close down your life and a digital biography of your life to hand down the generations.
I had an entrepreneurial flair from a young age ”“ from making pencil cases that I sold to my school mates, Pencil skirts with my own , clothes label ItFitz and I tried everything to make money ”¦ every party plan going. I left School at 16 and went into Tech as I had a feeling it was a thing of the future. I started at Bradford Council as a Junior Computer Officer, I then went to study Computer Studies part-time at Huddersfield Uni.
A Programmer in the early days, I progressed onto analysis project & programme management and up to creating Biscuit Tin I was a Consultant Business Architect designing the way businesses need to operate to leverage technology. Predominantly for large financial services institutions.
The challenges I faced before Biscuit Tin were mainly my own making ”“ always looking for the next thing’ and trying to find my niche and the career I felt destined for. It appeared after closing down the lives of both of my parents armed with a physical Biscuit Tin of old papers. The two worlds of my professional technology career and personal experience collided as I realised that the life close-down’ process is completely broken and needs to change.
It seems many of my challenges since then have revolved around money ”“ from bootstrapping, winning grants and investing what I could from my pension to get the business off the ground. To the challenges of raising capital I face now to forge ahead to scale-up and deliver to our mission to make a difference in this space and be a global Digital Legacy leader within 5 years.
Schroders Personal Wealth adopts fintech Aveni
Schroders Personal Wealth (SPW) has partnered with Aveni, a Scottish AI fintech firm, to overhaul its compliance function.
Through the use of Aveni’s Detect platform, SPW will utilise Natural Language Processing (NLP) to monitor client interactions and create data-driven evidence of compliance. By adopting cutting-edge technology such as generative AI and large language models.
SPW aims to provide unparalleled risk management and oversight, which will drive material efficiencies and lower its cost to serve.
This move reflects SPW’s strategic approach to transforming how it delivers, monitors, and assesses its advice offering and control environment. The latest generative AI and NLP technology will allow SPW to address all areas of the value chain, enabling it to identify vulnerable and high-risk clients and support them in the best way possible.
Ray Milne, Chief Risk Officer at Schroders Personal Wealth, said,
“Our partnership with Aveni shows our commitment to using technology to ensure the quality of our advice. It will enable us to identify vulnerable and other high-risk clients, helping us support them in the best possible way.”
The Financial Conduct Authority (FCA) has recently called for companies to invest more in technology to guarantee that future regulatory requirements are met. This investment from SPW demonstrates its commitment to meeting a data-first approach and positions it at the forefront of the advisory community with its use of cutting-edge technology.
Joseph Twigg, CEO of Aveni, said,
“Placing AI technologies at the heart of business operating models is no longer a nice-to-have; it will determine who wins and who loses over the coming years. SPW is demonstrating its commitment to remaining at the forefront of the market.”
Aveni Detect has been established as a “Machine Line of Defence,” analysing all customer interactions and mitigating a range of risks from conduct and complaints to customer vulnerability. The platform will meet the data-first requirements introduced by the new Consumer Duty regulation, which comes into effect in July 2023.
This partnership between SPW and Aveni is a significant step forward in transforming the investment industry. By leveraging the latest AI and NLP technology, SPW aims to drive material efficiencies, lower its cost to serve, and deliver exceptional advice to its clients. As the industry continues to evolve, investment firms that leverage cutting-edge technology will have a distinct advantage over those that do not.