Fintech – supporting business growth and recovery

As we emerge from lockdown determined to experience the things we missed the most, we can also be confident that some of the developments we saw during the pandemic will remain.

I was reminded of this recently when I heard some of Scotland’s business community share their hopes, aims and ambitions for a post Covid recovery, while being candid about consumer expectations and the efficiencies digital interactions allow. Recovery and development in the ever-evolving digital economy was firmly part of the discussion as well as the role that fintech can play in enabling both.

Fintech is a key component in a developing digital economy that demands services and products to meet consumers changing habits, and help businesses deliver efficient and cost-effective operations. It is the thread that financially connects businesses with customers and suppliers and vice versa.

What’s exciting is the range of FinTech businesses in Scotland who are all working in this environment and here already, working with commercial and business customers.

They enable business owners to make truly informed decisions, using technology to analyse business and financial data to provide an accurate and up to date (often up to the minute) picture of their business. Float helps businesses make informed decisions about their cash. It’s an online cash management and forecasting tool that helps business leaders manage their business and make decisions with confidence.

Other fintech are providing a range of new digital tools to help businesses when it comes to managing payments, revenue, invoices, suppliers, and creditors. Know-It enables businesses to automate their credit control processes helping to manage credit risk, reduce debtor days improve cashflow and the businesses understanding of its customers.  Optimum Finance another fintech uses technology and data to unlock cash tied up in unpaid invoices supporting business with flexible invoice financing options.  Modulr works to simplify business payments including staff payments, merchant services, supplier payment workflows or payments reconciliation, helping to improve operational efficiencies.

FinTech’s in Scotland are also creating an accessible and transparent alternative to bank lending helping the non-bank lending sector to grow.  LendingCrowd has been working in this capacity since 2014. Authorised by the UK financial regulators it supports ambitious SME’s to grow their business by providing a range of funding and lending options including working capital loans, growth finance and the recent Coronavirus Business Interruption Loan Scheme (CBILS).

I’m continually reminded of the dedication and profound purpose of fintech founders in Scotland. It’s even more apparent in the fintech’s focused on the business and commercial sectors. These fintech teams continue to inspire us at FinTech Scotland with their focus and determination to use fintech capabilities to help the business sector recover post COVID.

FinTech Innovation continues to grow, putting more spring in our step!

We all hope we’re starting to emerge from lockdown and see green shoots helping us get closer to what we refer to as ‘back to normal’. Those green shoots are hopefully giving us some cause for optimism coupled with the change in seasons and the firm feeling that spring is in the air.

That turns our attention to the opportunity for growth and potential change, new horizons and hope for the future. Growth is firmly on our mind at FinTech Scotland and in the last few months we have welcomed 22 new FinTech SME’s into the FinTech Scotland’s community. The new additions include start ups, established tech businesses applying their capabilities to fintech, as well as international businesses building a home in Scotland.

The FinTech Scotland Cluster continues to build and create the environment to help business develop, grow and scale, all enabled by the continued collaboration across industry, public and academic sectors. We will be working in continued collaboration as we consider the support needed to help FinTech SME’s to scale.

Supporting UK FinTech’s scale was one of the recommendations from the Kalifa Review that was endorsed by the UK Chancellor during UK FinTech week in April. The Chancellor outlined that the Financial Conduct Authority (FCA) will take forward the concept of a ‘scale box’. FinTech Scotland will support the work to develop this idea further, working collaboratively to share experiences and needs for those businesses aiming to scale.

In addition Scotland is advancing it’s plans for a series of Tech Scalers following the Mark Logan review. Another conscious effort to provide support to scale tech businesses that aligns with our focus for FinTech SME’s in Scotland.

Both fit well with our ambition for Scotland to be a global fintech hub that enables business  development and growth, and has put an even more determined spring in our step.

Reflecting on an extraordinary year, looking to the future

For all the right reasons we’ve paused to reflect this week on the extraordinary year we’ve all had were the COVID-19 pandemic has touched all of us in some way, and we know for many it’s been extremely difficult. This past year has transformed nearly all aspects of life for many of us. And it’s been a year where technology and digital have been vital components for how we remain connected, work, learn and maintain access to the vital services we need.

Fintech Innovation has played an important role in helping us develop some of the new norms’ we first started talking about at the beginning of this pandemic. A year on and the fintech Community in Scotland has grown and evolved. It has also developed the propositions and services that have helped people and businesses maintain the access to vital financial services.

There’s a growing understanding of the fintech potential to make a difference through new technologies and access to data as well as determination in fintech businesses to build solutions that help future progress.

Scottish fintech innovations are looking to the future. Zumo’s hard work and smart money wallet and platform is transforming how we think about the future of crypto currency and money, with financial inclusion at its heart. Nudelaunched its app this week guiding students and newly employed to raise a deposit more quickly for their first home. Qpal is working to help those financially stretched or financially vulnerable and VistalWorks is working to protect people from fraud, keeping online shoppers safe from harm.

Scotland has an established and growing reputation for fintech for good, a point recently recognised in the recent UK Fintech Strategic Review, also known as the #KalifaReview. The Kalifa Review provided an opportunity to take stock of fintech across the UK and learn about the strengths and opportunities across all the regions. It positively identified the value of a Cluster model in helping economic growth and recognised Scotland’s fintech Cluster as a well-established environment for future fintech expansion.

The energy across Scotland’s fintech cluster offers the kind of practical support and determined optimism for more development and an ambition that sees us embrace more inspiring and often extraordinary opportunities as we look at the potential for cross sector innovation.  If we needed one, the Kalifa Review has given us even more impetus to harness the fintech opportunity for economic growth and social change.

We have another catalyst in the Scottish Technology Ecosystem Review, led by Mark Logan, the recommendations here set out a clear programme for collaborative action. It’s a call to action for us all and offers a future vision of how technology can help catalyse the post-pandemic recovery. This week’s announcement from Scottish Government confirmed its commitment to utilise the potential and support the broader opportunity to strengthen Scotland as a tech ecosystem.

If we needed an accelerant the COVID-19 pandemic has given us a year where we’ve experienced the power of digital and the role for technology. We’re learning from the experiences of the past and turn our attention to the hopes for the future. The Kalifa Review and the Scottish Technology Ecosystem Review have a number of common themes, apart from the obvious technology connection both call for action through collaboration to help us recover and embrace our full potential for an extraordinary future. Collaboration sits at the heart of what we do at FinTech Scotland and if you’re keen to hear more please get in touch.