Digital Technology Employer Survey
Photo by Branko Stancevic on Unsplash
Skills Development Scotland and partners are conducting an employer skills survey which will help shape the correct future skills provision for digital tech jobs in a number of sectors. If you manage a digital technology business/a business which has need of employees with digital skills, complete the survey; and share your skills issues and recruitment needs and challenges.
The Digital Technologies sector is important to Scotland as it plays an underpinning role in driving the competitiveness of Scotland’s other growth sectors as well as being a significant employer in its own right.
As part of this an employer skills survey is being conducted which will assess the current and likely future skills needs and issues in the digital technologies workforce. Ultimately, the research will deliver a strong and robust evidence base with which to inform skills investment planning for the digital technology sector and other sectors with a growing need for digital skills.
The objectives of the study are as follows:
- Detail the size and scale of the sector, and its economic importance to Scotland
- Detail the size and scale of the sector in Glasgow and Edinburgh
- Detail the size and scale of the Fintech sector
- Present the current composition and forecast changes in the sector’s business base
- Establish the current and likely future skills needs of employers
- Map the education supply pipeline for the sector
Can fintech help employees engage with their work pensions?
Manuel Peleteiro, CEO of Scottish fintech Inbest.ai, Ed Owens from Pension Wise and Gavin Marshal, Senior Financial Wellbeing Consultant at HSBC will be on a panel discussing how technology, amongst other things, can help with engagement when it comes to workplace pension.
This panel will be part of a series of event organised around the latest behavioural research into employee engagement with workplace pensions schemes by Dr. Robertson-Rose of the University of Edinburgh. Her research shows how HR practices influence employee behaviour and explains what employers can do to help increase pension scheme engagement.
Each seminar will last approximately one hour and will be followed by refreshments and an opportunity to network.
These free seminars will be of interest to employers seeking to improve the financial well-being of their employees
Book your tickets
| Locations | Dates | Venues | Tickets |
| Edinburgh | 15 May, 17:00 ”“ 19:00 | University of Edinburgh | Book here |
| Dundee | 16 May, 16:00 ”“ 18:00 | Gallery of Contemporary Arts | Book here |
| Glasgow | 21 May, 16:00 ”“ 18:00 | University of Strathclyde | Book here |
| Aberdeen | 23 May, 16:00 ”“ 18:00 | Society of Advocates Library | Book here |
FNZ becomes first Scotland-based fintech unicorn business
The Scottish financial sector has always punched above its weight, confident in its status as the largest UK financial centre outside London. It not only contributes billions of pounds to the UK’s GDP, but is recognised the world over for its innovation and forward thinking ”“ successfully picking up the baton passed by innovators from years gone by.
Add to that the country’s current ambition to become a globally recognised top five fintech hub ”“ nurturing start-ups, scaling up SMEs, encouraging growth, and attracting global firms ”“ and it’s easy to see why the Scottish fintech ecosystem is outperforming its rivals.
Scotland’s credentials as a leading fintech location were further reinforced recently with the news that the Edinburgh-based fintech giant FNZ has reached Unicorn status.
While it would be a stretch to claim FNZ as a truly home-grown Scottish company, a lot of the business’s rapid growth has occurred on Scottish soil. The company was founded by chief executive Adrian Durham in New Zealand, before they quickly expanded to Scotland in 2005. Many of the original FNZ team were from Scotland and importantly remain working for the company today, from its Tanfield base in Edinburgh, where they employ over 400 of its 1,500 members of staff.
FNZ has thrived during its time in Scotland, thanks at least in part to the combination of talent, customers and infrastructure needed to succeed.
The company now holds £330 billion in assets under administration from around five million customers globally, serving some of the world’s largest financial institutions, including Standard Life Aberdeen, Santander, Lloyds Bank, Vanguard, Generali and Barclays.
Its success caught the attention of Al Gore’s Generation Investment Management LLP and Canadian pension fund Caisse de Depot et Placement du Quebec, which combined to acquire the stakes previously owned by General Atlantic and H.I.G. Capital- in what was 2018’s largest fintech deal ”“ valuing the company at £1.65 billion a mere 15 years after it was founded.
The deal, if we accept that foreign direct investment is a good measure of attractability for any economy, is one of the best examples of what can be achieved in Scotland.
FNZ’s business is built on the desire to help people achieve their financial goals by developing excellent technology solutions that simplify the end-user experience and ultimately direct more of their hard-earned money into assets by bringing down the cost of managing those assets.
Adrian Durham, CEO and founder of FNZ said:
“The question we asked when launching FNZ was how can technology solve the problems faced by consumers of long-term savings products? We knew then, and it’s still true today, that technology is the key to unlocking many of the solutions to the problems typically faced by customers. It was important therefore for us to expand our business into a destination that was technologically advanced and would support our ambitions. We certainly found that in Scotland.”
“FNZ is a growth business and I’m pleased to say that we have continued to grow apace, benefiting from the investment being made in our own technology and processes, our increasing scale, and the effort and dedication of our highly-skilled people.”
FNZ employs nearly 600 people in the UK, the majority of them in Edinburgh. The company’s dedicated research and development division invests heavily in its core technology platform and processes, including digital advice, blockchain, predictive analytics and end-to-end process automation.
Stephen Ingledew, CEO at FinTech Scotland said:
“FNZ is a global leader in blending new technologies with financial services to improve customer engagement with long term savings and investments and it is a shining example of how innovative enterprises can grow and expand on the international stage form Scotland.”
“I’ve known Adrian and FNZ team since their early formative days of arriving in Scotland and it has been inspiring to see first-hand their exponential growth with a focus on people skills development to support the delivery of world class customer outcomes through new technologies. The impact of FNZ on the UK and global savings and investment market has been seismic for both the financial services industry and many consumers and we are delighted FNZ are part of the Scottish ecosystem which is having such a significant international impact.”
Graeme Jones CEO of Scottish Financial Enterprise said:
“FNZ is a fabulous success story for Scotland. Reaching Unicorn status is a remarkable achievement and testament to what can be accomplished within our thriving financial services industry. The company is a leader in innovation, a major player within financial services and a sizable employer, all of which is evidence of Scotland maintaining its gold standard legacy within our industry.”
“I am delighted FNZ has joined SFE, further enhancing our membership. I am looking forward to working with Adrian and his team at FNZ as we continue to promote the strength of Scotland’s financial services industry in Scotland, across the UK and worldwide.”
The Global Open Finance Centre of Excellence project hits a new milestone
The Scottish bid for the development of The Global Open Finance Centre of Excellence (GOFCOE) has received very good feedback from the Strength in Places Fund assessors and moves to the second stage as announced todayby the UK Research and Innovation organisation
In October 2018 a Scottish consortium decided to come together behind the ambitious project of launching the Global Open Finance Centre of Excellence in Edinburgh and apply for funding from the Strength in Places fund.
The University of Edinburgh, FinTech Scotland, Scottish Enterprise and the Financial Data And Technology Association (FDATA) joined forces to produce a very strong application.
Open Banking, and its impending evolutions into open finance more generally, is the biggest global trend in financial services, for people and for businesses.
A centre of excellence would be a world first, providing leadership, coordination, research and capability to support this rapidly expanding and evolving phenomenon.
The GOFCOE is one of twenty-four ambitious projects, from pharmaceuticals to aerospace, and transport to the creative economy, that have received early-stage funding to develop full-stage bids that could lead to significant economic growth in places.
The GOFCOE project will receive early-stage funding, which will allow for the development of full-stage bids.
Ultimately, eight of the strongest bids are set to receive additional funding to carry out projects designed to drive substantial economic growth.
Announced in the modern Industrial Strategy in November 2017, the Strength in Places Fund will benefit all nations and regions of the UK by enabling them to tap into the world-class research and innovation capability that is spread right across the country. The fund brings together research organisations, businesses, and local leadership on projects that will lead to significant economic impact, high-value job creation and regional growth.
Chief Executive of UK Research and Innovation, Professor Sir Mark Walport, said:
Our clear vision is to ensure we benefit everyone through knowledge, talent and ideas. Significant support through the Strength in Places Fund will further catalyse economic potential across the country by bringing researchers, industry and regional leadership together to drive sustained growth through world-class research and innovation.’
The Government confirmed in the 2018 Budget that the Strength in Places Fund is to receive a further £120m to bring the fund budget for the period up to 2021/22 to £236m.
Stephen Ingledew, Chief Executive at FinTech Scotland said:
“The Global Open Finance Centre of Excellence builds on Scotland’s heritage of financial services and enviable entrepreneurial track record combined with an enlightened and progressive culture which aligns the social and economic benefits of innovation. Going forward the Centre of Excellence focused on data driven innovation will support the inclusive growth objectives of Scotland, leveraging the ongoing role of international collaboration across Europe and globally with the private sector, consumer groups, academia, regulators, governments”
Jarmo Eskelinen, Director of the Data-Driven Innovation initiative at the University of Edinburgh said:
“The University of Edinburgh is delighted to support the Global Open Finance Centre of Excellence [GOFCOE] and to be developing this exciting project in partnership with FinTech Scotland, FData Global, Industry and Academia across the central belt of Scotland. The success of the Strength In Places Fund [SIPF] bid is confirmation of the importance of innovation for industrial strategy in the UK and we look forward to engaging with the consortium to develop the GOFCOE in the coming months. As a partner in the Edinburgh and South East Scotland City Region Deal, this project exemplifies all we are aiming to achieve through our Data-Driven Innovation initiative; attracting talent and investment to the region; linking world-class researchers and data analytics expertise with industry and innovating to drive new products and services.”
Danny Cusick, Director Multi Sectors at Scottish Enterprise said:
“We’re excited to be developing this project with our partners as it has the potential to bring substantial economic benefits through increased innovation and inclusive growth to firmly establish Scotland’s reputation as a world leader in Open Finance. Scotland already has exceptional capabilities in fintech and data and the Centre of Excellence demonstrates what we can achieve through collaboration to create competitive advantage for Scotland.”
Fortnightly FinTech Fuse ”“ Falling in Love with FinTech!
It is just so wonderful to see so many people falling in love with fintech and how it is fueling the opportunity to innovate through collaboration and inclusion.
This was very much the case on Wednesday morning when I joined the Lloyds Bank and Google teams for a Falling in Love with FinTech’ breakfast meet up.
The diverse audience from the fintech community, academia, large financial enterprises and many other organisations made a terrific atmosphere.
Big thanks to Misha Cunningham and Google Digital team for their fabulous hospitality
This meet up was brilliantly led by the inspiring Sarah Kenrick along with Tom, Kegode, Lisa Caldwell and Lloyds Bank team.
Lloyds, one of the initial founders of FinTech Scotland, are developing impressive innovations and collaborations by engaging the fintech community.
Community Love
The community love continued the next evening as we held FinTech Scotland Fusion’ gathering where we had a fantastic buzz and atmosphere. I know some carried it on into the very late hours!
The Fusion’ was expertly organized by our entrepreneurial friend Aleks Tomczyk with great collaboration and generosity from Kirsty Irvine and Johnston Carmichael.
Wonderful mini spotlight talks from Myles Stephenson of Modulr, Hannah Rudman of Wallet Services, Loral Quinn of Sustainably and Stuart Lunn of LendingCrowd as well as our fintech grandfather’ Gavin Littlejohn.
They all brought alive the evening by sharing their experiences and latest news and reaffirmed to a very diverse and engaged audience why falling in love with fintech was so easy.
We all decided that Fusion’ meet up will be a regular event in addition to our frequent fintech practitioner forums across Scotland so more on this to come
The community plays such an important role in welcoming new fintech enterprises working in Scotland and it was terrific to see firms new to the community with us on Thursday such as SageCity, Listings Ledger and Miconex.
The role of the community is something I shared with Stuart Harvey of Datatics and Graham Paterson a couple of weeks ago and we look forward to seeing them both at future events.
Supporting the growth of new fintech enterprises will see the community expand across Scotland and it is fantastic to be working with the Craig Wilson, Colin Carmichael of Sopra Steria and Gordon Donald and John Lonsdale of University of Edinburgh with a new accelerator programme.
Supporting the love of fintech innovation was very much in evidence when Mickael and I spent some time last week at Codebase with the Barclays Eagle Lab team.
Always wonderful to catch up with Trish McClay and talk about their terrific engagement along with the magical fintech entrepreneur Suhail Ahmad of AdviserDirect and the awesome Colin Hewitt of Float, who have now expanded into twenty plus nations.
We had been in Codebase the previous week for two fantastic sessions of massive significance in bringing more love into fintech, both of which will spread the fintech love far and wide.
Downstairs we had a FinTech consumer inclusion workshop with the Karen Rodger, Andrew McConnell from Scottish Government and along with Yvonne Macdermid, David Hilferty from Money Advice Scotland, Allison Barnes from Money Advice Service and other consumer groups.
The session was led by the inspiring duo Barbara Mills from CivTech and Nicola Anderson in developing a roadmap on how fintech can play a significant role in addressing financial inclusion challenges. This was all about the building new demand for fintech
Then, in parallel, upstairs, we had the Scottish Government session with entrepreneurs on how the engagement with small enterprises could be developed to improve the supply of innovation. This was a fantastic session led by Clare Mills, Carron McNab and colleagues.
It is a privilege to be part of this valuable work being led by Trish Quinn and hugely exciting to have the fintech community being involved in the opportunity to really impact big innovation with Government.
We shared these mutually aligned initiatives with the Digital Minister Kate Forbes and the FiSAB sub group with Graeme Jones the following day and it was great to get the endorsement to build on this big love’ opportunity for fintech.
Big Love
The broader love of fintech on a big scale is going to provide exciting opportunities to scale up the innovation in Scotland.
For example, in working with the rapidly changing M&G Prudential business engage with the fintech community and it was valuable to catch up with Mark Simpson and the Managing Director, David Macmillan a couple of times over this last fortnight
Then on Wednesday it was terrific to meet up with Sam Bedford, Gary McLellan and innovative team at CYBG in Glasgow.
Fantastic to see the leading edge examples from Jennifer and Jack of how they are innovating to improve customers financial engagement and the opportunities to engage with the fintech community in Scotland.
Really looking forward to progressing with the Sam and the team and combine our mutual love of fintech with real purpose.
The combination of big and small coming together to love fintech was one of the key themes for the discussion with Edinburgh Chamber of Commerce members on Thursday morning.
Thank you to everyone for the engagement and support, especially Liz Mcareavey and Rebecca Meish for inviting me to discuss how Scotland can develop the fintech love on a bigger scale.
This is something we were very much putting into action with senior executives Frank Tong and KC Tsui from HSBC Global who flew from Hong King to meet with us and firms from the fintech community.
Thank you to Ahmed El-Ryias from the School of Informatics at the University of Edinburgh for setting up the meeting, it was a terrific session late into the last Wednesday evening and onto the Thursday as well.
Thank you also to Colin Halpin who led HSBC to be one of Fintech Scotland initial founding partners and has played an important supporting role in our progress in the first year.
It was the fantastic presentations and engagement from the Scottish fintech firms which very much illustrated the innovative developments in Scotland and the significant opportunities to collaborate with the HSBC Global team.
In fact, Frank mentioned that the activities in Scotland were world leading and certainly made Scotland stand out as a global fintech centre, especially with date driven innovation.
Global Love
The global love continues to be an important part of work and this has been increasing even more over this last few weeks.
For example, absolutely I loved catching up with our good friend Thorsten Terweiden, who leads on fintech developments at Hong Kong Invest, on his visit to Scotland.
Great engagement with Thorsten and his team as we work with Graham Hatton and the SDI team in developing he Hong Kong Scotland bridge for our respective fintech communities.
This opportunity to share the mutual love of fintech opportunities was very much on the agenda when I met up on Tuesday with the fabulous Dan Roselli who is the founder of the impressive FinTech Accelerator Hub in Charlotte, North Carolina.
Dan took time out of his vacation to share the amazing story of what the team has achieved and there were so many parallels with the what we are building in Scotland.
I thanked Dan with one of the great Scottish beers and we agreed to take forward a joint number of areas to develop the mutual love of fintech both sides of the Atlantic.
The collaboration opportunities with USA was also the focus of my conversation with Jennifer Ericson, a Global Scot based in Minnesota and I very much value the connections Jennifer is helping us build for our fintech community.
Exporting is an important part of the fintech agenda, and it was valuable to catch up Suzanne Henderson from the Scottish Government team who is leading on the work to identify global market priorities for all sectors.
Very much looking forward to progress this work with Suzanne, Lesley Ward, Scott Strain along with Lorraine Mallon from SDI and build on the progress being made by a number of firms.
A great example of this is hearing last week about The ID Co, who are part of the DIT fintech trade mission to New York in a couple of weeks and Craig Buchan, the founder of QPal, who are progressing amazing innovations in the Middle east and Africa.
Last Monday, I was delighted to be invited by Graeme Jones of SFE to join him and SFE members for the dinner with the City of London Mayor Peter Estlin for an engaging conversation on the global role for Scotland in financial services and fintech.
I had met with Peter Estlin the previous week at the latest Department of International Trade Fintech Board meeting which considered a number of areas in developing the international reach of fintech.
In particular, it was great to hear from the very engaging Laura Royle from the FCA who outlined the valuable work in developing the Global Financial Innovation Network.
Laura recently led a fantastic FCA Project Innovate event for the Scottish fintech community and we are looking to do this again to cover some of the global regulation opportunities for fintech firms.
Collaborative Love
Last Thursday I had the opportunity to share this global opportunity for fintech at the City Deal Conference and the importance of collaboration to deliver data driven innovation success for the country.
I very much enjoyed the chance to share the stage with Digital Minister Kate Forbes as well as Professor Mark Parsons and Professor Charlie Jeffrey along with the distinguished panels.
To highlight the importance of collaborative love I was given the challenge by Andy Nichol form Edinburgh City Council to finish with the words from a song by The Men They Couldn’t Hang!!
This I duly did with the very apt words from their song Great Expectations’!
Huge thanks to Hamish Miller, Will Peakin and the Future Scot team for putting on such an important collaboration conference. Looking forward to the next one in Glasgow in May.
I’m also looking forward to speaking at the FinTech North events in April and May and always valuable to catch up with Julian Wells on Monday to talk through sharing the fintech collaboration love both sides of the border.
There are some great expectations from the data driven innovation programme and with the momentum growing now behind building the Global Open Finance Centre of Excellence then Scotland’s fintech enterprises will play a central role.
It was hugely exciting to be part of the collaboration bringing alive the Centre of Excellence working with various partners including Damien at University of Edinburgh and Gavin with his FDATA team.
You’ll hear more on that in the coming weeks although if you were with us on Thursday night at Fusion then Gavin gave you some of the exciting snippets of news!
Another wonderful collaborative initiative for Scotland is the forthcoming launch of The European FinTech Digital Satellite Office in Edinburgh next month
This is a first for Scotland and for Europe and it is brilliant to be collaborating with our friends in the EU to make this significant investment happen with the University of Edinburgh and Scottish Enterprise.
This Digital Office will invest in academic research in fintech as well as new start up fintech enterprises. Watch this space for more.
The collaboration with Scotland’s world leading universities is a hugely important and it was a real pleasure to be invited to speak to Heriot Watt students on career opportunities in fintech by the inspiring David Steinberg.
The talent from all disciplines is becoming an even stronger pull with international fintech enterprises, Datafest is a fantastic two weeks of sharing this with the world.
Terrific to work with MBN Solutions and Deloitte with excellent fringe meet up events as part of DataFest.
I shared this and the wider talent and diversity attraction of Scotland with long standing innovator and friend Nish Kotak of Talecco on his recent visit to Edinburgh.
Very much looking forward to working with Nish to encourage some large enterprises to come to Scotland.
The week finished off with the quarterly FinTech Scotland board meeting expertly chaired and hosted by David Fergusson at the impressive Nucleus Financial offices.
A very valuable and constructive conversation on the longer term future strategy for FinTech Scotland as we look to the next stage of our journey.
It was great to have Digital Minister Kate Forbes join us for the discussion and I am looking forward to progressing over the coming months.
Running Love
My running love has been hugely strained over this last two weeks as illness and unusual toe injury have meant I have not run for a fortnight!
Going from running 55+ miles a week to none is really tough in so many ways although the intensity of the fintech engagement and presentations has taken my mind of this a little bit.
However, it has even more reinforced my passion and love for running and I hope to be back on the road and the Spring races in the next week.
With trips to the EU in Brussels and Dublin to build Scotland fintech collaboration over the next two weeks I am hoping to take my love of running and fintech to Europe! Until next time.
FinTech Scotland and FinTech North to collaborate in 2019
FinTech Scotland announced today the strengthening of its relationship with FinTech North, one of the leading fintech organisation in England.
Together they will collaborate around many initiatives this year including Stephen Ingledew, FinTech Scotland’s chief executive delivering presentations at FinTech North’s conferences in Manchester and Leeds in the Spring
and then a joint collaboration conference by the two organisations in in Scotland in the Autumn
Julian Wells, Director of FinTech North, says:
“Its a pleasure to welcome Stephen and FinTech Scotland to our first two major conferences of 2019. We have enjoyed a mutually supportive relationship since the creation of FinTech Scotland in 2018 and the progress made by Stephen and the team in that time is highly impressive. We look forward to developing even stronger links with FinTech Scotland over the coming months and are excited to run our first event north of the border later this year.”
Stephen Ingledew, Chief executive of FinTech Scotland, says:
“FinTech Scotland is delighted to be working with the FinTech North team, with whom we share a common passion for the development of strong and vibrant FinTech communities and economy across the country. In Scotland over the last year we have made significant progress in bringing together the innovative Scottish fintech community across multiple cities, organisations and universities and I look forward to sharing our journey with the FinTech North community.”
FinTech Scotland and FinTech North were already closely aligned as both organisations are chaired by HM Treasury FinTech Envoys. Chris Sier is FinTech Envoy for the Northern Powerhouse and chairs FinTech North, while David Ferguson is Scotland’s FinTech Envoy and chair of FinTech Scotland.
Orca launches Innovative ISA to help investors access multiple P2P platforms
Orca, the Scottish fintech, announced today the launch of its Innovative Finance ISA (IFISA). It will enable investors to invest across multiple peer-to-peer lenders (P2P) by taking down
Until now, investors were only allowed to one P2P platform in an IFISA each tax year. Should they want to invest in an ISA from different platforms, they had to go through a painful process of creating separate accounts with each P2P platform.
One interesting stat given by Orca is that in order to achieve the same level of diversification enabled through Orca’s IFSA, it would have taken five years as opposed to minutes now. They can now invest in 5 leading P2P platforms at once.
Iain Niblock says: “The Orca ISA is an innovation that can make investing in P2P far more accessible to the wider investing public. It gives them a diversified, highly attractive alternative to Cash and Stocks and Shares ISAs.
“Investor funds are automatically spread across many of the UK’s leading P2P platforms. This reduces exposure to any one platform and distributes investment across a much broader range of asset classes and risks.
The dangers of cashless and how to design for a digital economy
Blog written by Sergei Miller-Pomphrey – analyst, designer, full-time finch nerd – @goforsergei on twitter and medium
Many have recently spoken about the dramatic cashless uptake by consumers. June 2018 was a big month with the breaking news that UK debit card transactions had overtaken cash transactions for the first time (13.2bn transactions compared to 13.1bn)”Š”””Šreported in various media, examples here, hereand here”Š”””Šand contactless transactions (5.6bn) had grown dramatically, also.
In terms of debit cards, the uptake is an outcome of many factors like fewer branches and cash machines, but probably most prominent is the general cultural shift toward using cash less frequently and leveraging the efficiencies that card transactions bring.
As for contactless, this has been made possible in part by the enhancements made to UK bank cards”Š”””Šall new cards printed in the last several years have generally been contactless-enabled, barring a few slow off-the-mark legacy banks, with the earliest contactless adopters going back a decade (and longer if you’re a real pedant).
Contactless debit cards coupled with smartphone ubiquity, the rise of smartwatches, and Apple, Google and Samsung Pay enabled on almost every device, has made paying by some form of cashless payment easier.
Not to mention the meteoric rise of internet shopping, which now goes beyond buying books and small electronics, with everything available online from food and clothing to holidays and cars.
Also, Direct Debits are now so standard it’s hard to imagine that there ever was a time when you got a physical bill from a supplier and you went to the Post Office to pay it!
(Many) Users are obviously embracing contactless and a cashless economy.
But none of this could have been made possible without merchants evolving to accepting cashless payments as a standard, also.
Your local coffee shop these days is as likely to have a sign that says “No Cash” as it was a decade ago that the sign read “Cash Only”.
The challenge
Let’s cut to the chase”Š”””Ša cashless economy requires democratised, stable and secure infrastructure.
Users need the ability to engage in a cashless economy, which means they need bank accounts to get debit cards and smart-enabled devices to pay for things cashlessly.
Getting a bank account means you need proof of identification and a fixed physical location to call a home.
Even mobile numbers and email addresses are mandatory in many instances these days when applying for a bank account, which means you need a home landline or mobile phone contract and some form of internet access.
And all of that is just for the consumers”Š”””Šbusinesses that rely on cash and cheque need to invest in business bank accounts that generally charge the business a monthly fee and additional fees for transactions, payments, deposits, withdrawals.
Businesses need EPoS machines (electronic point of sale”Š”””Šcard readers) to take payments. In order for card readers to work, they need internet. EPoS vendors can charge monthly fees, flat percentage fees on transactions, or varying tiers depending on value or number of transactions.
Then comes the underlying payments network infrastructure. Mastercard and Visa, the two biggest players in the game”Š”””Šcheck your bank cards, their logos are likely on them! (With American Express being another biggie.)
Last year, in June, the Visa network went downall across Europe. It was a pretty crazy day.
Then, a month later, Mastercard went down.
With the growth in cashless payments, these down times were felt by consumers hard ”“ people were rushing to cash machines to withdraw funds to pay for dinner, buy shopping, go out, or even just manage to make it home safe from wherever they were.
It exposed just how reliant we are, now, more than ever, on systems rather than people. When working in hospitality. If you’re working in a café and your till system goes down, you just have to use a piece of paper, a pen, and a calculator, and you take cash only.
There was no alternative here for those that didn’t already have cash on them or who couldn’t get to a cash machine.
In the grand scheme of things, a few hours of payment processing being down is manageable”Š”””Šthink about how we manage power cuts and bus replacement services, we just need a back-up infrastructure.
At the moment, that backup infrastructure is cash. But this may not always be.
Cash and cashless
Cash
One of the huge benefits of cash and the physical economy is that it is democratised for, of and by the people ”“ you don’t needa bank account for cash, you don’t need a home, you don’t need a driving license, Council Tax bill, phone number, email address or passport.
While some may have more or less money than others, nobody (practically) owns money or the cash economy itself”Š”””Šregardless of who prints the money.
Another huge benefit is that you don’t need a technical infrastructure”Š”””Šcash is good old brain and brawn (counting and moving).
If there’s an issue with a register, EPoS machine or calculator, you can always just figure it out yourself.
Cashless
In essence, many of the benefits of cashless are just the negative points of cash”Š”””Šlike all good evolving innovations, cashless is finding and fixing the weak(er) points of its predecessor.
Cash is physical, so it’s SUPER dirty”Š”””Šit’s pretty disgusting when you think about it.
Cash is physical, so it’s fragile”Š”””Šthe number of times I washed my last fiver while in school makes me want to cry just thinking about it. Or that ripped £20 that you taped back together so you could top up the leccie card and keep the lights on!
Cash is physical, so it goes missing”Š”””Šremember looking all over the house for the tenner that fell out when you emptied your pockets that night?
Cash is physical, so it takes up space”Š”””Šall those times you walked down the street with your pockets sounding like the unmistakable jingle jangle of a high-school janitor!
Holding cash can bring risk.
You could be mugged in the street for the contents of your wallet, if you’re lucky, or sustain injuries or worse if you’re unlucky that day.
Your business could be burgled, losing a day or week’s or month’s takings depending on how often you get to the bank.
One big point about digital however, is that it is every bit as susceptible to theft as hard cash.
The difference being that we now put even more of that burden of protection on the organisations that hold our cash, in exactly the same way that we did when banks first started operating.
The pros of cashless essentially boil down to three things, efficiency, security and convenience.
The bigger issue
System infrastructure is one thing, but socio-economic infrastructure is another, much more difficult issue altogether.
There has been a lot of discussion about two main things to do with the negative effects of a cashless economy (with, of course, many other issues and nuances, also):
- Inherently denying access; and
- Hurting businesses that rely on cash
Let’s take them in turn.
Access
The first part of the infrastructure outline above should act as a warning bell to every one of you reading this”Š”””Šhow do the homeless, those who can’t prove their identity, those without access to internet, the unbanked and the underbanked gain access to the cashless economy?
Access to the cashless economy is a privilege.
Cashless is inherently baking additional privilege in to the world’s economies.
This additional privilege thereby adds more disadvantage those who are already hugely disadvantaged and deprived in our societies to start.
With cashless adoption growing, there’s less need for a physical infrastructure such as bank branches or cash machines (though, of course, more reliance on an network of card readers).
This has negative effectson those who rely on those services, which invariably includes the poor, the elderly, the not-digitally-enabled, the un- and under-banked, and those who just don’t know how to manage their finances, digitally, or engage in the system.
There are many, many, manyarticles to read on the subject.
Business
The second part is about how micro and small enterprises can survive in a cashless economy.
Part of the reason for this struggle is due to cash flow.
Businesses that rely heavily on cash and cheque transactions are able to manage their cash flow more easily against low turnover.
For example, if a cheque takes a few days to clear, then they can write the cheque on the Friday but use the takings from the weekend to pay for the cheque come Tuesday.
Other issues include the additional overheads that businesses need to absorb in order to engage in a cashless economy”Š”””Šphone line, card reader rental, fees on transactions, all of that needs to either come off the business’s bottom line or be put on to the consumer.
The future of cash
Cash will die. Eventually.
Just like the horse-and-cart are no longer the primary mode of logistics and transportation, and the quill is no longer the prevalent form of writing implement”Š”””Šcashless is the evolutionof cash.
It is inevitable.
Now, it may not happen tomorrow or in the next decade. Cash still has some fight in it yet, but that isn’t necessarily down to any inherent traits in the benefits of cash.
The necessity of holding on to cash actually comes from the sheer scale of the culture change required and our failures in being able to adapt quickly enough to build for a cashless economy that was peaking over the horizon for the last decade.
Let us re-frame and reverse a position above”Š”””Šcashless does notinherentlydeny access to the economy.
Cashless doesn’t think. It’s not a thing or a person. It’s a concept. It’s a culture. And it’s a culture born out of the real world and how people interact.
And those that are denied access to the cashless economy is not because of those that are engaging with it, but because financial institutions have not solved access to the economy for those people.
For those that don’t have access to internet, this is due to government and big telcom not having solved issues of access as a right for the populace.
The last one is more difficult”Š”””Šfinancial literacy and awareness, in being consciously able to adapt and embrace a cashless / digital economy. That’s huge culture change and the government and banks and all financial institutions should be working together provide access to information and knowledge that can help these people engage.
And businesses, how do we help them?
Well, part of this isn’t cashless’s fault, again. High-streets all across the UK are being squeezed because of online shopping and changing demand.
Cashless is only one part of a larger trend for businesses and they need to adapt their business models regardless of whether they take card or not.
But they must know that if the trend is leaning towards cashless payments, then they risk losing customers if they can’t accept this payment.
And as for managing suppliers and cash flow, there are ways to re-set yourself there, too”Š”””Šbusinesses need to recalibrate to be able to hold cash for future payments, not pay yesterday with today.
So, what..?
Well, we need to do something about it.
And by we’, I don’t mean consumers. I don’t mean that they need to shop local, ignore online retailers, and hoard cash under their mattresses.
Consumer trends are consumers voting with their feet and the economy needs to react to them, not attempt to control them.
The worry here is that government may impede progress by placing regressive policies on consumers or businesses, instead of acknowledging that change is needed and pushing onwards.
It’s always better to fix forward instead of policing back.
We need to have some form digital economy design council that coordinates and aligns financial institutions, businesses, consumers, and most importantly, government.
We need to agree that access to the digital economy is a right, not a privilege.
If we agree that access is a right and not a privilege, it changes how we frame the issue.
It becomes a social imperative to provide access, just like health, education, security, and infrastructure, rather than putting the blame on consumers and changing habits.
Then we can begin designing forward, finding ways to include individuals that are excluded or at risk of exclusion by the many criteria out there.
Maybe we could increase and speed up government incentives for telcoms to provide internet and cellular infrastructure to those in remote or rural areas?
Maybe financial institutions could leverage their Corporate Social Responsibility policies to provide low-cost starter’ smart-enabled devices to allow those without a mobile phone, a computer, internet, or even a branch to access their bank account?
Maybe financial institutions could provide starter’ bank accounts for immigrants, vagrants, and transients?
Maybe government can create a basic account associated to your national insurance number so that every single citizen has basic access to some form of bank account?
Maybe that could be provided in collaboration with a challenger bank like Starling, who have an infrastructure built for the modern economy?
Maybe.
Maybe.
Maybe.
None of these issues are easily solved, but the conversation needs to be had to start trying to solve them.
Thinking forward instead of back is the key to how we can solve this and build for the inevitable digital economy.
But the first step is to think at all.
LendingCrowd in top 30 fast-growing tech startups – Interview with CEO Stuart Lunn
Stuart, well done on being named among the top 30 fast-growing tech startups to watch by Tech Nation. What do you think is the main thing that led to this recognition?
“Thank you! I think the Upscale team have recognised the progress we’ve made since we launched in late 2014, and potential we have to really take this business to the next level. It’s also great to see that 20% of the Upscale 4.0 cohort are fintech businesses.”
What does joining the 2019 cohort of Tech Nation’s Upscale 4.0 programme mean for LendingCrowd?
“This is further validation of our work in building a sustainable business capable of being scaled in a high-growth sector. We founded LendingCrowd to help bridge the funding gap facing so many small businesses, and the experience gained through Upscale and working with Tech Nation will be invaluable. We are proud to be based in Scotland, so it was pleasing to be selected as the only Scottish company to join this year’s Upscale programme. We hope this paves the way for more great Scottish businesses to be recognised.”
How is your firm transforming from being a start-up to being a scale-up business?
“Since our launch, we’ve always been focused on creating robust in-house infrastructure that can scale and underpin growth. This business is built on solid foundations of technology, financial services and regulatory experience, and we’ve proven the benefits of our business model in terms of enabling hundreds of SMEs to access the finance they need to grow. As we continue to bring in larger funds, we’re able to deliver higher levels of funding ”“ helping our borrowers create more jobs and generating real knock-on benefits for the economy.”
You on-boarded some very high profile collaborators last year on your board and in your marketing team. Are you planning on growing significantly more in 2019?
“We announced the appointment of Sir Sandy Crombie as our Chairman in November, and the following month Darren Cairns joined us as CMO. We hope to announce some more additions to the senior management team as we scale this year. In January alone, we’re advertising for seven roles on our careers page. Our team currently numbers 25 and I expect that figure will be close to 40 by the end of this year.”
What are your plans and objectives for 2019?
“To keep growing our investor and borrower base. We’ve now helped more than 570 businesses access over £50 million in funding, including more than £12 million in Scotland. As we attract more investors looking to make their money work harder, we’ll continue making a positive impact for our vital community of SMEs. We want to be the go-to company for Scottish SMEs that are being failed by traditional lenders.”
What’s your view on the future of P2P lending?
“We’ll see increasing levels of institutional money flowing in as the sector matures. Individual investors remain an important part of the mix, and I believe that financial advisers will increasingly recommend this market to their clients as an alternative to traditional savings and investments.”
FinTech Scotland’s first anniversary heralds a growing fintech economy across Scotland
FinTech Scotland has confirmed that the number of innovative fintech SMEs based in Scotland has grown by three times to over eighty in the last twelve months.
The announcement comes on the first anniversary since the formation of FinTech Scotland, a joint initiative by a number of financial services firms, University of Edinburgh and Scottish Government.
The growth in the new fintech enterprises focused on reinventing financial services has been driven by both new start-ups and existing fintech firms moving to Scotland.
In addition, the number has also been bolstered by early stage Scottish technology firms expanding their proposition into financial services.
Since its inception FinTech Scotland has facilitated the growing fintech innovation by fostering the connection between entrepreneurs, large financial services firms, the universities, Government and public sector as well as a range of strategic stakeholders.
Examples of FinTech Scotland’s strategic enabling role have included:
- Developed fintech access to funding and business services with the appointment of a fintech commercial partner Vivolution in conjunction with Scottish Enterprise
- Connected fintech firms with over a dozen large financial services firms and members of Scottish Financial Enterprise to develop new routes to market
- Collaborated with Scottish Development International and Deloitte to develop global connections in Far East, Europe and USA for inward investment and exporting
- Supported the development of fintech entrepreneurial networks and accelerators hubs such as the University of Strathclyde Technology and Innovation Centre
- Developed fintech skills with Scotland’s universities, colleges such as Fife Fintech Skills Academy and student groups such as Glasgow University FinTech Society
- Close collaboration with the Financial Conduct Authority to support fintech firms regulatory understanding reinforced by a senior secondment to FinTech Scotland
- Grew the visibility of the Scotland’s fintech activity through the launch of new digital platformand over 80 fintech events including the FinTech Festival with Visit Scotland
- Developed financial inclusion and diversity initiatives working with consumer groups, social enterprises and bodies such as Equate Scotland
- Facilitated cross sector fintech innovation, for example, with Law Society of Scotland and Scotland IS Cyber team as well as Scottish Government and the CivTech initiative
Digital Economy Minister, Kate Forbes said: “Congratulations to FinTech Scotland for an immensely successful year. With Stephen Ingledew at the helm, FinTech Scotland has galvanised collaboration between Scotland’s universities, financial industry and public sector. Together, we are building Scotland’s reputation as a major global FinTech centre. I personally commend FinTech Scotland for their hard work last year and their vision for the future.
Commenting on the first year Stephen Ingledew, Chief Executive of Fintech Scotland said: “It has been a privilege over this last twelve months to lead the FinTech Scotland team and galvanise the broad range of support from across Scotland to support the growth of innovative fintech enterprises in this last year.
Our progressive, collaborative and inclusive agenda is certainly establishing Scotland as a major global fintech centre which can contribute to Scotland’s economic and social ambitions.
One year on there is still much to do but with a very supportive Board and strategic partners plus a range of stakeholders from private sector, Government and academia actively participating we can achieve the top ranking global fintech status “
Graeme Jones, Scottish Financial Enterprise Chief Executive, said: “FinTech Scotland has made a significant impact over the past 12 months by raising awareness of Scotland’s fintech capabilities and the opportunities available for new and existing businesses. Scotland’s financial services industry has always been at the forefront of innovation and I’m pleased to see this momentum continue. SFE and our members will continue to work collaboratively to support Stephen and his team as they strive to make Scotland a global fintech leader.”
The first anniversary was recognised on Tuesday the 8thof January at the Financial Services Advisory Board (FiSAB) meeting held at the University of Edinburgh, one of the founding partners of FinTech Scotland.
Picture taken at FiSAB on 8 January 2019.
Economy Secretary, Derek MacKay, Digital Economy Minister, Kate Forbes, Jim Pettigrew, FiSAB Co-Chair and Chairman of CYBG plc, Stephen Ingledew, Chief Executive, FinTech Scotland.
At the FiSAB meeting, Stephen Ingledew outlined the key priorities for FinTech Scotland in 2019:
