FinTech Scotland launches ground-breaking Innovation Lab, evolving the future of UK financial regulation
FinTech Scotland proudly announces the launch of the Financial Regulation Innovation Lab (FRIL) – a dynamic initiative set to revolutionise and shape the future regulatory landscapes in the UK and around the globe. Championing the frontier of financial regulation and harnessing cutting-edge technologies, FRIL is set to help ignite employment creation and business opportunities, while also unlocking the potential of future talent.
In partnership with the University of Strathclyde and University of Glasgow, FRIL will deliver a wide-ranging, ambitious research agenda, led by and actionable for the financial sector, to help advance understanding and adoption of new and emerging technologies. The Lab delivers 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.
The Lab will engage participants in industry-led innovation challenge calls, integrate academic research with an industry-relevant agenda, design and implement a skills and education programme, and facilitate knowledge exchange through workshops, roundtables, conferences and trade missions.
“FinTech Scotland is uniquely positioned within the Scottish fintech industry to lead such an initiative as it will work to inspire collaborators across Scotland, the UK and globally, enabling those around the world to see Glasgow’s financial services capabilities,” said Nicola Anderson, CEO of FinTech Scotland. “Bringing the fintech community of industry, academics and regulators together to explore, test and experiment with new technologies is an important part of our mission.”
Professor David Hillier, Associate Principal and Executive Dean of the University of Strathclyde Business School said “The University of Strathclyde is delighted to partner with Fintech Scotland and the University of Glasgow to deliver this critical initiative. We have significant capabilities across the university in emerging technologies including AI, space and quantum, which we look forward to leveraging through FRIL. We look forward to continuing our work with industry, policy makers, regulators and innovative SME’s to drive actionable solutions and deliver on FRILs ambitious agenda.”
Professor Eleanor Shaw, Head of the Adam Smith Business School, University of Glasgow said, “The Adam Smith Business School is very pleased to be a founding partner alongside our colleagues in Fintech Scotland and the University of Strathclyde to deliver FRIL. The opportunity to transform the regulatory landscape is remarkable and we are excited to work with partners across all sectors to deliver a collaborative centre of excellence for cutting edge developments in financial regulation.”
Stephen Ingledew OBE, Chair of FinTech Scotland, explained, “Once more, FinTech Scotland is taking proactive measures to showcase the effectiveness of how a cluster approach can accelerate the UK’s ability to seize competitive advantage in the future of financial regulation and fintech innovation. FRIL will allow us to continue to endorse the opportunity from the fintech sector to support growth across the UK economy.”
The research will cover various aspects of financial regulation, including the following areas:
- Explainable AI Applications for ESG Risk Management:
- Simplifying ESG Regulation Compliance through Explainable Intelligent Automation
- Using Automation and AI to Combat Money Laundering
- Synthetic Data for Financial Regulation Innovation
- Generative AI for Improved ESG Reporting and Monitoring in Financial Services
FRIL, which is specifically funded by the Glasgow City Region Innovation Accelerator programme (led by Innovate UK on behalf of UK Research and Innovation), will work with industry participants, including large established financial institutions, the Fintech community, academics, voluntary organisations and regulators across the UK. The first four industry-led Innovation Calls to be issued in conjunction with Lab will cover four topical areas:
- AI and compliance: Utilising emerging technologies to simplify compliance process and monitoring.
- Consumer Duty: Supporting consumer duty obligations and enhancing financial inclusion outcomes.
- Financial Crime: Addressing future challenges of financial crime.
- ESG: Meeting new regulatory requirements, leveraging new data and new technologies.
Full details of these Innovation Calls will be published here.
Facilitating collaboration and knowledge exchange, FRIL’s output will include white papers, podcasts, newsletters, blogs and a series of events including roundtables, conferences and trade missions. The white papers in particular will cover academic and industry thinking, addressing key questions posed by the opportunity emerging technologies present for financial regulation. The topics of the white papers will be added to and revised on a regular basis ensuring it is Industry led and responsive to Industry needs.
In its pursuit of researching the adoption of emerging technologies into financial services to build confidence in solutions and ultimately demonstrate their ability to meet regulatory standards worldwide, FRIL is committed to focusing on innovations and solutions that can effectively address some of the industry’s most pressing issues.
Notes:
This project is funded (or part-funded) by the Glasgow City Region Innovation Accelerator programme.
Led by Innovate UK on behalf of UK Research and Innovation, the pilot Innovation Accelerator programme is investing £100m in 26 transformative R&D projects to accelerate the growth of three high-potential innovation clusters ”“ Glasgow City Region, Greater Manchester and West Midlands.
Supporting the UKGovernment’s levelling-up agenda, this is a new model of R&D decision making that empowers local leaders to harness innovation in support of regional economic growth and help attract private R&D investment and develop future technologies.
Glasgow has a remarkable history rooted in industry and innovation and is home to world-leading science and technology expertise. The Innovation Accelerator programme will support the Region’s key economic aims of increasing productivity, delivering inclusive growth and achieving net zero.
Special Scotland Fintech Festival 2023 – Nicola Anderson, CEO at FinTech Scotland
Season 3, episode 10
Listen to the full episode here.
Scotland Fintech Festival took place between the 21st of September and the 12th of October. With over 50 events the festival was a real success this time again.
During the launch event, the Fintech Summit, we recorded special episodes in collaboration with collaboration platform Findr.
In this episode we speak with Nicola Anderson, CEO at Fintech Scotland about the festival itself as well as initiatives that are underway, delivering the recommendations of the UK Research & Innovation Roadmap.
Navigating the Future: The UK’s Competitive Edge in Fintech Regulation and Innovation
“The UK has a strong competitive advantage in areas like cybersecurity, privacy and, increasingly, artificial intelligence. A lot of work, however, remains to be done. This is not an automatic process by any means,” outlines Dr Devraj Basu, Senior Lecturer in Finance in the Accounting and Finance department at the Strathclyde Business School. Basu helped set up the RegTech Forum which brings together industry, academia and government to help understand the fast moving RegTech landscape and how Scotland and the UK can position themselves to become leading global players.
“While the UK has well established strengths, it needs to pull together all these very different areas by creating an ecosystem solution,” he continues. Basu feels that if the UK provides a proper regulatory framework in the context of technology it will provide a greater impetus in unlocking innovation. A stable regulatory framework is also needed to adapt to technological change to ensure it’s fit for consumers – AI being a prime example. But the UK needs to simultaneously join up with international best practice as well. “These elements require a deep understanding of all the issues, as well as an aspect of agility to bring together all the different stakeholders,” he says.
Regarding the appetite of UK regulators towards the development of overarching digital public infrastructures (such as the so-called India Stack’ built on Aadhaar, India’s digital ID system), Basu believes that the UK can learn from establishing digital identities, preferably through the creation of an overarching framework for privacy regulations. However, the parallels stop there. This is because the UK would, unlike India, have to tackle its legacy technology issues. Further, the UK’s Financial Conduct Authority (FCA) can only play a limited role in transforming legacy infrastructure because rather than dishing out prescriptive directions to industry, the FCA is a principles-based regulator which can only outline overarching maxims.
In terms of innovating financial regulation itself, Basu feels that the UK has done the right thing by introducing regulatory sandboxes. Moreover, he feels strongly that the FCA should start looking at the costs that regulations impose on businesses and how they can be minimised. This could be achieved by implementing a by design’ philosophy by providing either high-level roadmaps that minimise cost or interactive processes that lead to better regulation. “One way of being innovative is if the regulator could convince organisations that the adoption of new regulations would actually improve products or sales. One thing that’s come out of our RegTech Forum is this notion of the by design’ philosophy, which takes a proactive view on regulation, which in turn encourages innovation,” Basu explains. “Ideally a regulator should be a body that guides businesses through a process and helps them get better.”
New partnership to tackle financial fraud using synthetic data
In the ever-evolving landscape of financial fraud, Authorised Push Payment (APP) Fraud has become a prominent concern for both regulators and financial institutions. In 2022 alone, a staggering £485.2 million was lost to APP Fraud scams, accounting for a significant 40% of all financial fraud losses during that period. To combat this growing problem, the Financial Conduct Authority (FCA) and the City of London Corporation have teamed up with Smart Data Foundry to provide innovative solutions and support their mission to eradicate APP Fraud.
Smart Data Foundry’s aizle Synthetic Data Engine
At the heart of this collaboration lies Smart Data Foundry’s cutting-edge aizle® synthetic data engine. This powerful tool is being harnessed to create a synthetic dataset tailored specifically for APP Fraud. This dataset will be accessible through the FCA’s Permanent Digital Sandbox, providing a resource for innovators and stakeholders in the fight against APP Fraud.
Understanding APP Fraud
APP Fraud occurs when individuals are deceived into transferring money to fraudsters posing as legitimate entities or individuals. The consequences of falling victim to these scams are devastating, particularly for those who are financially vulnerable. It is a pervasive issue that requires comprehensive and innovative solutions to address effectively.
TechSprint Initiative and Continued Development
Recognising the urgency of the problem, the FCA and the Payment Systems Regulator (PSR) organised a TechSprint event in September 2022, focusing on combating APP Fraud. Smart Data Foundry played a pivotal role during this event by providing their APP Fraud synthetic dataset. Building on this momentum, Smart Data Foundry has continued to refine and expand their dataset to meet the evolving needs of the industry.
The Importance of Quality Data
Access to high-quality data is essential in the fight against financial fraud. It enables innovators to test ideas, develop proofs of concept, and refine models effectively. The APP Fraud synthetic dataset, provided by Smart Data Foundry, covers the entire lifecycle of APP Fraud, offering a representative and relevant resource for researchers and organisations striving to combat this growing threat.
Bryn Coulthard, Chief Product and Technology Officer at Smart Data Foundry, stated,
“We focus on creating high-utility synthetic data to enable innovation within the financial services industry. We are delighted to continue partnering with the FCA with our APP Fraud datasets to help play a part in tackling this growing problem and to help ignite and accelerate innovation in this space.”
Photo by Sora Shimazaki: https://www.pexels.com/photo/crop-cyber-spy-hacking-system-while-typing-on-laptop-5935794/
New opportunity to join Scotland’s thriving fintech cluster
The University of Strathclyde has just published a new job opportunity and is on the look-out for a High Growth Advisor who will be working very closely with FinTech Scotland.
The successful candidate will play a key role in supporting the development of the Financial Regulation Innovation Lab which is launching later this year. They will collaborate closely with the University’s Industry Engagement and Innovation Directorate, the University’s FinTech Cluster Lead, and Fintech Scotland’s Strategic Innovation Director, Trish Quinn whose appointment was announced recently.
The Financial Regulation Innovation Lab builds upon the UK Fintech Research & Innovation Roadmapunveiled last year. The roadmap highlighted the potential for further research and innovation in financial regulation. Aligned with the UK Government Science and Technology Framework published in March 2023, the Lab aims to position the UK at the forefront of global science and technology.
The Lab will create a unique environment where fintech entrepreneurs, established UK and global financial services firms, technology enterprises, regulators, universities, and third-sector organisations come together to drive financial innovation, addressing opportunities and challenges in financial regulation.
Key responsibilities for this role include facilitating the Innovation Call series for the Lab, which comprises demand-led challenges set by industry.
Additionally, the role will involve developing essential partnerships between the University of Strathclyde, FinTech Scotland, and the University of Glasgow, to create more collaboration opportunities in the Scottish and UK fintech clusters.
The ideal candidate for the role should have extensive leadership experience gained from transforming leading financial sector companies digitally. They will be instrumental in shaping the Lab’s interactions with diverse stakeholders, developing effective networks, sector relationships, and multi-party collaborations through their strong negotiation skills, business acumen, and strategic vision.
Interviews for this exciting opportunity are scheduled for October 2, 2023.
To apply visit this page
For more information or informal inquiries, please contact Catherine Breslin, Head of Industry Engagement & Commercialisation, at catherine.breslin@strath.ac.uk.
FinTech Scotland appoints senior leader to accelerate plans for the Financial Regulation Innovation Lab
FinTech Scotland has announced today the appointment of a new senior leader, Trish Quinn, who joins as Strategic Innovation Director. Trish will be leading the development of the Financial Regulation Innovation Lab (FRIL) which is due to launch later on this year.
The Financial Regulation Innovation Lab (FRIL) is one of the recommendations laid out in the UK Fintech research & Innovation Roadmap published in March 2022. It is set to be a new collaborative centre of excellence for cutting-edge fintech developments in financial regulation. The Lab will explore solutions that aim to streamline regulatory processes, enhance compliance measures, and drive efficiencies across the financial sector.
FinTech Scotland, in partnership with industry partners, and with the University of Strathclyde and the University of Glasgow, will stand up the launch the Lab and drive progress this year. This industry-led initiative showcases the power of the Fintech Scotland Cluster to drive innovation. This project is funded by the Glasgow City Region Innovation Accelerator programme, led by Innovate UK on behalf of UK Research and Innovation. This financial support from the UK Government continues to endorse the opportunity from the emerging fintech sector to support growth across the UK economy.
As the newly appointed Innovation Director, Quinn will be responsible for leading the Lab and working with partners across Scotland and in the UK, in delivering a programme that will enable efficiencies through technology to meet the needs of current and future financial regulation. Quinn brings a wealth of experience in digital transformation and digital product development to her new role, having previously served in a number of senior digital roles in both the UK and Scottish Government.
Commenting on her appointment, Trish Quinn said:
“I am delighted to join FinTech Scotland as the Innovation Director and lead the Financial Regulation Innovation Lab. The potential to reshape the financial industry through technology applied to financial regulation is significant, and I am excited to join the team at FinTech Scotland to drive innovation, foster collaboration, and contribute to the growth of the fintech sector.”
Nicola Anderson, CEO of FinTech Scotland, said:
“Trish brings extensive experience in digital transformation, leading strategic initiatives across her career with an emphasis on change through collaboration and partnerships. Her leadership and experience will help us accelerate the Lab’s development, creating the conditions needed for more fintech growth in Glasgow and the FinTech Scotland cluster.
David Hillier, Associate Principal and Executive Dean of the University of Strathclyde Business School said:
“We are excited to welcome Trish to lead this critical initiative. The University of Strathclyde has significant expertise to bring, and we’re looking forward to driving this initiative, working closely with our industry partners across the FinTech Scotland Cluster and our academic partners in the University of Glasgow to drive this opportunity for Glasgow City Region. The Lab creates the environment for high-potential innovation in a subject that’s fundamental to the success of our financial system”.
Eleanor Shaw, Head of the University of Glasgow Adam Smith Business School said:
“Trish will lead a ground-breaking initiative that’s a first for Scotland and the UK, and we are delighted to be working with her. It’s fantastic to see Glasgow City Region’s innovation capabilities and ambition come together to create what will become a key asset for Scotland and the UK in driving innovation in financial regulation. The University of Glasgow is looking forward to playing a leading role.”
Dr. Catherine Martin, Vice Principal Corporate Services, University of Edinburgh said:
“I’m very pleased to welcome Trish to FinTech Scotland and want to congratulate her on this appointment. The Financial Regulation Innovation Lab is an exciting new endeavour and we at Edinburgh are pleased to support this opportunity for Glasgow and for Scotland. As a founding member of FinTech Scotland it’s a pleasure to see the fintech opportunity continue to grow across Scotland and the UK”.
OneSpan
AutoRek secures Best CASS Solution for the fourth consecutive year
Scottish fintech AutoRek achieved outstanding recognition at the Systems in the City Fintech Awards 2023.
Demonstrating unrivaled excellence, Autorek clinched the highly coveted title of Best CASS Solution for a fourth consecutive year. Organised by specialist business and technology consultancy Goodacre, those awards celebrate the finest achievements in the industry.
Leahn Parry, Head of Governance, Risk, and Compliance at AutoRek, claimed the individual award for Compliance Specialist.
In addition to securing the crown for Best CASS Solution, AutoRek was also recognised as a contender for Best Wealth Management Solution.
Lyn Canavan, Vice President of Marketing at AutoRek, stated,
“The recognition of winning this prestigious award, along with reaffirming AutoRek’s standing as the indisputable Best CASS Solution, fills us with immeasurable joy. Over the years, we have meticulously refined and perfected our CASS solution in close collaboration with our esteemed clientele. This victory serves as a testament to the unwavering dedication and tireless efforts exhibited by the entire AutoRek team behind the scenes.”
Leahn Parry added,
“It is with immense honor that I receive this prestigious award. I extend my heartfelt gratitude to Goodacre, the distinguished panel of judges, and the individual who nominated me.”
The Systems in the City Fintech Awards serve as a resounding endorsement for suppliers of services and systems within the regulated financial services sector.
Guided by an independent and fact-based annual accreditation process, the selection procedure is meticulously overseen by a panel of three independent judges.
These awards serve as a pivotal reference point for enterprises evaluating the suitability of their operational infrastructure, cementing their crucial role within the industry.
Fintechs and DORA, everything you need to know!
Season 3, episode 7
Listen to the full episode here.
On November 10th, 2022, the Digital Operational Resilience Act (DORA) was approved by the EU.
It is designed to standardise IT risk requirements in the financial sector to ensure that all participants of the financial system are subject to a common set of.
Amongst other things it introduces an oversight framework for critical third-party providers.
In this podcast we will discuss how this new EU regulation can impact fintech firms that are very often providing 3rd party services to established financial firms.
Guests:
Yvonne Dunn, Partner at Pinsent Masons
Wayne Scott, Regulatory Compliance Solutions Lead at NCC
Jamie Graves, technical advisor on the TrueDeploy project
One year on, the FinTech Research & Innovation Roadmap drives FinTech growth in Scotland
A year on from publishing the FinTech Research and Innovation Roadmap, FinTech Scotland announced today that it is on track to hit its targets for economic growth.
In March 2022, FinTech Scotland, the independent cluster body, published a strategic FinTech Research and Innovation Roadmap, identifying industry priorities for the UK to accelerate its fintech ambition through research and development (R&D) and targeted innovation.
The Roadmap was developed in close coordination with fintech entrepreneurs, the financial services sector, academia, regulators, Government bodies and consumer groups, and provides a pathway and action-oriented framework to increase the positive impact of FinTech Innovation across Scotland and the UK.
The Roadmap also supports the recommendation in the Kalifa Review of UK Fintech, for increased R&D investment in fintech innovation to accelerate fintech cluster excellence, and was positively welcomed by Ron Kalifa, the financial services sector, UK and Scottish Government and the City of London Corporation.
The priorities laid out in the Roadmap centred on four strategic innovation themes:
- Climate Finance
- Open Finance Data
- Payments and Transactions; and
- Financial Regulation
Over a ten-year period, the ambition is to significantly increase fintech related jobs across Scotland and the UK, as well as produce an increase in economic gross value add (GVA) through fintech innovation.
One year on, industry-led collaborations have driven growing action against each of the strategic innovation themes. These collaborations, at the cutting edge of innovation, are driving results. Examples include:
- Climate Finance
- 100% increase in fintech enterprises in Scotland focused on climate finance
- Accelerated fintech partnerships and fintech adoption through new innovation labs launched with Lloyds Banking Group and TSB with outcomes helping UK customers towards carbon efficiency
- Climate finance enabled through cross-sector collaboration with Space Scotland, accelerating innovations in ESG using data from satellite sources
- Open Finance Data
- 26% increase in fintech enterprises developing innovative solutions using Open Banking
- Accelerated fintech adoption and creation of commercial opportunities through the launch of Phoenix’s innovation forum to build greater engagement and support the well-being of its customers, driving forward greater financial inclusion
- The Smart Data Foundry’s research on vulnerability in the pension market, the impact of late payments on the SME market, and on the net zero agenda, all enabled through Open Finance Data
- Payments & Transactions
- 19% increase in fintech enterprises in Scotland developing payment solutions
- Investment of £94m into fintech enterprises focused on payment innovation in the last 12 months
- Development of Cryptofinance, blockchain and Distributed ledger courses at leading Scottish universities
- Financial regulation
- 13% increase in fintech enterprises specialising financial regulation innovation
- Investment of £83m into fintech enterprises focused on financial regulation innovation in the last 12 months
- Confirmed government and industry support to accelerate innovation in financial regulation enabling the creation of the Financial Regulation Innovation Lab
Nicola Anderson, CEO of FinTech Scotland, said:
“By enabling collaborative innovation across the fintech ecosystem not just in Scotland but the whole of the UK and beyond, we can see how the FinTech Research and Innovation Roadmap is already making a real difference ”“ helping businesses to build economic growth, create jobs, work through climate finance to enable a future net zero economy, and helping to alleviate the cost of living crisis.
“The FinTech R&I Roadmap demonstrates how collaboration and innovation can change people’s lives, driving positive outcomes for both business and citizens both in Scotland and across the UK.”
Charlotte Crosswell OBE, Chair of the Centre for Finance, Innovation and Technology, said:
“The UK Fintech Sector Review clearly set out recommendations to ensure the country retains its global leadership position in financial innovation. An important component of that success is increased investment in fintech, and ensuring the brightest minds across the UK are involved. It’s encouraging to see that in just one year, the FinTech Research and Innovation Roadmap has enabled more of that important R&D collaboration and aligns with our approach at CFIT.”
Damian Nussbaum, Executive Director, Innovation and Growth City of London Corporation, said:
“FinTech continues to be a major success story for the UK, and its development is critical to ensuring the UK maintains its position as a global financial hub. The UK has a unique innovation ecosystem where research and development play a critical role. The Roadmap highlights the power and potential of that ecosystem and the transformative impact that collaboration in this sector can have across society. The City of London Corporation welcomes the progress made and we look forward to working with Scotland and the other nations and regions of the UK to drive further fintech growth.”
Jane Martin, Managing Director of Innovation and Investment at Scottish Enterprise, said:
“Strong, effective and purposeful collaboration between industry, academia and the public sector is key to delivering much needed innovation and growth for Scotland. The FinTech Research and Innovation Roadmap is a demonstration of how collaborative action through purposeful strategic action can drive good economic outcomes and accelerate future growth.”
Catherine Martin, Vice Principal Corporate Services at the University of Edinburgh, said:
“As a founding partner of FinTech Scotland the University of Edinburgh is fully committed to the role R&D plays in developing fintech economic opportunities in Scotland and across the UK. Our experience and academic excellence in both disruptive technologies and other sectors has shown how strategic and purposeful partnerships can shape the future direction of vital industries and sectors in our economy and society. We’re committed to playing our role as a leader and as a collaborator in fintech and financial services innovation, pushing forward the FinTech Research and Innovation Roadmap priorities”.
Pardeep Cassells, Head of Securities and Claims at AccessFintech, said:
“Fintech innovation can’t afford to slow down. Technologies advance fast, customer expectations faster and the need for a fairer, more inclusive and more sustainable financial sector is still to be fulfilled. The fintech community has welcomed the FinTech Research and Innovation Roadmap. It focuses the mind, helping fintech businesses like AccessFintech accelerate through understanding the points of convergence across the sector which in turn enables more collaborations and innovations.”
Eleanor Shaw, Associate Principal at the University of Strathclyde, said:
“Strathclyde is proud of its role in shaping the future of fintech. It was one of the first universities to launch an MSc in fintech in the UK. Very early on we understood the importance of financial innovation to re-invent a sector that was built to benefit the many, not the few. R&D is key and the Roadmap is a fundamental tool. It’s been a key component in advancing our fintech strategy at Strathclyde. As a result we’re working in collaboration with FinTech Scotland, the University of Glasgow and the industry to establish the Financial Regulation Innovation Lab, to advance innovation in financial regulation.”
Frank Gauld, CEO at Smart Data Foundry, who sponsored the Roadmap, said:
“When it comes to data and innovation, the potential is exciting and unlimited. The FinTech R&I Roadmap focuses the mind and provides a clear industry view on innovation priorities. In the last year we’ve worked closely with FinTech Scotland, progressing research and innovation to unlock the power of financial data to improve people’s lives across society, the economy and the environment. Examples include our work with the FCA to innovate in the area of APP Fraud, research on consumer vulnerability in the pension market, the impact of late payments on the SME market, and working with Bankers for Net Zero to support the initiative to transition to a zero carbon economy. The insights are used across the industry and by regulators to change outcomes for people and businesses for the better”.