Greetings from a new Scottish fintech
Blog by Adam Greenberg, founder of SageCity
Welcome to our first blog post and a big thank you to Fintech Scotland for inviting us into the community. We are an early stage business and have been really touched by the warm welcome we have received from everyone in the community when we attended the fintech fusion event on Thursday.
One of the most explosive growths in the fintech sector in recent years has been the emergence of cryptocurrency and blockchain technology. Our team have gravitated around the industry since 2013 and we’ve seen the technology evolve from initial Proof of work systems to smart contracting all the way through to DAG technology and mimble-wimble protocol (We didn’t make that last one up).
Blockchain technology is often heralded as the beginning of a new technological era and it has now reached a point where the stage is set for some good old-fashioned adoption. At SageCity, our focus is on bridging the gap between the technology and those who could truly benefit from it. Edinburgh has a vibrant and successful startup industry with some amazing ideas for the future and we’ve been fortunate enough to rub shoulders with a few and offer our support in their vision. Since our inception in August, we’ve been working with local Edinburgh based businesses who are facing challenges which are limiting their business potential by taking the time to listen and design blockchain solutions which are not only successful but efficient and sustainable for the future.
Blockchain had become a bit of a buzzword in recent times with a lot of loosely linked terms tossed around alongside it and that makes it difficult to decipher and comprehend. At its root, we like to think of blockchain as the swiss army knife of ledgers because of the multiple functions and purposes it can serve. Blockchain technology at its core has three key qualities which depending on the situation can offer a number of long and short term benefits to businesses, especially startups and those looking for a competitive edge.
It’s adaptable
Blockchains are system agnostic meaning they can be adapted and managed where and when required. Their primary function is often finance related but can equally be data or communications orientated. They can be the top dog running the show or compliment an existing system, be public or private and in some cases, both. The key advantage here is that unlike typical traditional solutions, blockchain technology is extremely flexible and can often be adapted and built upon with minimal difficulty.
It’s cheap to operate
In most cases, we can design systems where the only maintenance cost related to a blockchain is the electricity that the computer or server consumes to remain online. Also, depending on the business model, these costs could be cancelled out by the issuance of tokens as a “reward” for those running the blockchain and creating forms of circular economies within the overall business’ ecosystem.
Its reliable and secure
Blockchains come in many shapes and sizes but they are almost always designed to be peer to peer. This means that the network has no single point of failure which can be crucial for modern businesses. The nature of peer to peer makes sure that the integrity of the data stored within is virtually untamperable and that content is also heavily encrypted making the blockchain an ideal candidate to be reliable and secure.
Our long term vision is to be able to provide tailored blockchain solutions to startups and businesses around the globe and make deployment a quick and hassle free experience. We’ve got some interesting concepts in the works which we are looking forward to sharing soon which will not only be useful for our endeavours but could be utilised by other Fintech companies who offer industry leading products and solutions.
Hopefully you’ve found this introduction into SageCity and blockchain interesting and hopefully even enjoyable. We are proud to be part of the Scottish Fintech community and looking forward to sharing our journey and helping others on theirs too. We love talking blockchain so if you have any questions you want to bounce off us we’d be happy to help at team@sagecity.ioand sure to follow us on twitter @teamsagecity to stay in the loop.
Mi Rewards: the first card-linked, city-wide loyalty scheme. Here’s how it works
In 2018 we launched Mi Rewards, the cardless, city-wide loyalty scheme, in Perth. It’s the first UK scheme to offer rewards that can be earned and spent across a town or city.
Mi Rewards is unique: consumers don’t need a loyalty card or app. They link their payment cards to the programme and, when they spend in participating businesses, they are automatically rewarded.
Over 2600 consumers and 60+ businesses have signed up. So how and why did we develop Mi Rewards?
Miconexhave nearly a decade of experience working with UK towns and cities on digital communication and local currency programmes. We manage a successful Gift Card programme with Perth & Kinross Counciland we’ve helped nearly 30 other cities and regionsto replicate this model.
Next we wanted to add a town/city rewards scheme, to:
- encourage shopping in the city;
- stimulate additional spend;
- better understand and communicate with customers;
- develop new consumer communication channels;
- measure the impact of events, marketing and planning decisions.
The main issue with traditional town and city loyalty programmes is that the consumer has needed to identify themselves at the point of sale. This means that either all staff in all the businesses require training or that additional hardware/software is required (expensive and unwelcome). We had to remove this friction.
Following extensive research, we concluded that payment-card-linked technology would remove the barriers. We partnered with Stampfeet, Perth and Kinross Council’s City Centre Management Team and a steering group of Perth businesses.
“Stampfeet has vast experience with card-linking technology, and our flexible loyalty platform supports the requirements of a city-wide scheme. We were excited about delivering an excellent product with a great vision.”
Asaf Rozin, Stampfeet CEO
Our proposition provides a frictionless solution:
- Automatically rewardsparticipating customers;
- No joining fee;
- No staff training, additional hardware/software;
- Cost to business is 1% of qualifying transactions;
- Points are converted into Perth Gift Cards.
This is highly attractive for consumers and businesses. Once they have registered for the programme the rest of it works automatically. We reward our customers just as Tesco and Nectar do ”“ but without a loyalty card. Mi Rewards and the businesses benefit from data insights into consumer behaviour; we are essentially creating a “single view” of a consumer across a whole network of businesses.
“Mi Rewards allows Place Managers to better understand how people engage with towns and cities and how we can adapt to satisfy evolving consumer preferences. We can improve residents’ experiences and the local economy.”
Leigh Brown, Chair of the Association of Town and City Management and City Centre Manager at Perth & Kinross Council“I love that Mi Rewards encourages people to shop locally. And it doesn’t pitch one business against another but rewards customers for shopping with us all.”
Dawn Cotton Fuge, owner of Precious Sparkle
We now have 2600 Mi Rewards users (1400 of those have linked at least one payment card). We’ve tracked over £100,000 of local spend to date, gaining powerful insights into retail trends. To engage customers further, we introduced “Points, Perks & Prizes”, where they earn points, win prizes or get perks, e.g. exclusive discounts and offers.
How it works
Because Mi Rewards is cardless and requires no additional software, hardware or training, it’s easy to use. Consumers register at Mi Rewardsand link their payment card(s). Businesses register at Mi Rewards Business. Shoppers are rewarded with pre-loaded credit cards (e.g. a Miconex Gift Card) to spend in registered businesses.
Moving forward
We’ve recently partnered with Stagecoach Group to offer Mi Rewards to bus users. We will also shortly introduce mobility tracking apps which will reward people for walking/cycling into the city centre.
Mi Rewardsallows us to communicate more effectively with consumers, gain insights, reward loyalty and encourage healthier living. We’re in discussions with many towns and cities about the UK/Ireland programme rollout. We believe that Mi Rewardsis the future of town/city loyalty.
Contact
Colin Munro, Managing Director, Miconex
01738 444376
colin@mi-cnx.com
Would your business benefit from an in-depth piece of research and analysis?
The University of Edinburgh is currently looking for projects for MSc Business Analytics, MSc Banking and Risk, and MSc Finance.
Their students are among the best in their field and combine their strategic business and management skills and specialist knowledge with the refinement offered through our 12-month, intensive programmes. They offer different types of projects and will match you with an individual postgraduate student with the specialised skill set suited to your research needs.
The University of Edinburgh MSc in Finance covers all aspects of investment, corporate and energy finance. MSc Banking & Risk projects could cover such topics as analysis of corporate financial information, credit risk management, econometrics applications and many others.
They University can consider almost any topic that has a finance, accounting, investment, energy market, banking or risk focus. Successful projects tend to have an empirical element, which has practical relevance. Most students are keen to work with practitioners on projects which will be of real value to them, helping them find solutions to strategic financial issues such as validity forecasting, forecast asset market returns, risk modelling, dynamic lifecycle strategies etc.
The MSc in Business Analytics (recently ranked 9th in the world in the QS Global Business Masters ranking) is designed to train analysts capable of taking on complex challenges and getting them industry-ready. The programme prepares students not only to be able to analyse and digest data available, but also to translate this into effective decision-making.
A key part is a research-based dissertation project. They are particularly interested in dissertation topics in optimisation or data science. Can you help?
If so, the University is looking for companies to submit project ideas by 26 January 2019. In return, you’ll benefit from the insight of one of the high-calibre postgraduate students, including a substantial report featuring extensive research, rigorous analysis and practical conclusions. To find out more, visit Sponsored Dissertations
To discuss further, contact Ksenia Siedlecka, Business Development Manager, ksenia.siedlecka@ei.ed.ac.uk for MSc Business Analytics
or
Aidan Hetherington, Corporate Engagement Manager aidan.hetherington@ed.ac.uk for MSc Banking and Risk and MSc Finance
A journey through the FCA regulatory sandbox
The Financial Conduct Authority (FCA)’s regulatory sandbox has now been in place for two years, and has continued to draw in innovative firms keen to test their business models, products and services in the market.
The FinTech team in Deloitte’s EMEA Centre for Regulatory Strategy, in collaboration with Innovate Finance, interviewed several current and previous FCA sandbox participants to seek their views on their sandbox journeys.
The result is A journey through the FCA regulatory sandbox: the benefits, challenges, and next steps.
It highlights the key themes, challenges, unexpected benefits and broader observations that firms expressed in relation to their sandbox journey, including their views of what the FCA’s next steps should be.
The unequivocal message is that the FCA sandbox has delivered real value to firms. In particular, being accepted into the sandbox and proving the underlying technology in a live environment has helped firms to better understand and fine tune their business models. Many also believe that the sandbox journey increased their credibility with both investors and customers.
Yet, while the usefulness of the sandbox is undisputed, the report also highlights areas where there is still room for improvement.
Overall, this report should make compelling reading for anyone considering a sandbox application.
FCA consultations on Innovation PSD2
Article written by Nicola Anderson, Senior Manager Retail Banking Supervision at the FCA.
Nicola just joined FinTech Scotland on a 1 year secondment.
After a slightly delayed start I’m delighted to have arrived at Fintech Scotland and I’m looking forward to being part of the team there for the next year.
Thanks to Stephen, Mickael and Shery for making me feel so welcome and part of the team. I’ve been out and about most of the week, meeting stakeholders and learning about the work, the innovation, collaboration and general mood of optimism! I’m looking forward to more of the same over the coming weeks and hope to meet many of the Fintech businesses in the next few weeks.
One point of interest has come up this week that I wanted to mention. I’m sure you’re already aware that the FCA has published a couple of consultation papers relevant to Fintech, Innovation and PSD2. Both papers are still open for views or responses, and links to both are attached below. The FCA welcomes input and perspective from interested parties and in particular those with experience on the subject. Through gathering views, next steps and further direction can be shaped in an informed and useful way. You can feed back directly on some or all of the questions posed in each paper.
PSD 2 consultation paper – closes on 12th October. The paper is focuses on:
1. The Regulatory Technical Standards for strong customer authentication and common and secure open standards of communication (SCA-RTS).
2. Domestic implementation before the EBA exemption guidelines are finalised
3. New fraud reporting requirements that will affect the data collected and reported by all PSPs
In addition the FCA is taking the opportunity to update its Payment Services and E-Money Approach Document guidance to reflect other legislative changes and clarify existing expectations based on experience of the regime (eg, of processing applications) since September 2017. These proposed amendments and additions are in Annex 3 of this consultation paper
Global Financial Innovation Network (GFIN) – deadline for responses is 14 October.
https://www.fca.org.uk/publication/consultation/gfin-consultation-document.pdf
This consultation sets out three main functions of the GFIN:
1. Act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models:
2. Provide a forum for joint policy work and discussions; and
3. Provide firms with an environment in which to trial cross-boarder solutions.
As part of consultation the FCA is seeking views on the mission statement for GFIN, its proposed functions, and where it should prioritise activity.
Do contribute to both or one of the consultations if you can and think it’s relevant to your business.
Best
Nicola
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Finding your Finance Seat at the Fintech Table
Fintech is a rapidly growing area that has captured imaginations in recent years; from entrepreneurs and CEOs to office workers catching up over a coffee. However, the integral role of the accounting professional within a fintech has perhaps slipped beneath the radar for many. It is worth lifting the lid on this innovative industry and looking at the highs and lows of working in finance for a fintech SME.
Taking stock of the fintech landscape
Financial technology is at the heart of a fintech business and as technology evolves it has the potential to change the way we carry out transactions and work. The industry, in line with the rate which new technology is advancing, is fast paced and always looking for new ways to challenge convention. The big trends in fintech to be aware of this year include diversifying cryptocurrencies such as Bitcoin, the increasing use of blockchain, improving the reach of contactless payment technology, greater competition between SMEs and large firms and increasing regulation.
Where do I fit in as a finance professional?
Most fintech organisations are progressive SMEs, where the function of the finance team evolves as the organisation grows. At an early growth stage, the finance team will often be outsourced. As the SME grows in terms of transaction volume and product and service offering, in the interests of cost and efficiency, the finance function tends to be brought in-house.
According to Andrew Robinson, iMultiply Senior Consultant this is a key time to join the business:
“Once a fintech, as with any SME, hits a critical point in the growth curve they will be looking to bring an agile finance team on board. The ability to roll up your sleeves and embrace variety and challenge are crucial. One minute you might be transaction focussed and the next you might be producing the management accounts and working with the CEO on finance strategy and company projections.”
What skills do I need to work for a fintech?
A recent PwC report revealed that 61% of CEOs believe that innovation is a priority, while 75% of executives are concerned with not having enough ideas. Bearing in mind this emphasis on innovation, you need to bring the right mind-set to this exciting sector. Although SMEs look for a variety of skills, we have set out the top three attributes which are a priority for fintech and SME employers:
Analytical Mind: You need to be able to solve problems, but also demonstrate logical thinking, strong numeracy skills and the ability to analyse data and information. If you can demonstrate strong analytical ability, you will be in high demand.
Dynamism and Adaptability: A lot of the firms working in this sector operate very much within a growth environment and will be looking for accounting professionals who have the ability to work across departments and position functions. Being able to bring new ways of working and showing an entrepreneurial spirit is key for being successful.
“You will need to be the right cultural fit. Working for an SME or fintech is like riding a rollercoaster ”“ you need to embrace change and enjoy the peaks and troughs. Adapting to evolving business needs and bringing a powerful blend of technical expertise, commercial nous and the ability to connect to different functions will enable you to rise quickly in the business”, confirms Kirsty Mackenzie, iMultiply CEO.
Resilience: This sector is unpredictable and things may not always go to plan, so developing resilience skills and the ability to bounce-back is highly prized.
The future of fintech is right there in the name. The industry has a heavy focus on finance and technology, and the remit of finance and technology is constantly changing. The only thing that we can know with any certainty is that the fintech market is set for further disruption and that the rewards for those who get the mixture of innovation and practicality just right will be enormous.
One thing’s for sure – it’s an exciting time to be a part of the industry, and it’ll be interesting to see how it continues to develop. As an accounting professional, if you spot the right opportunity with one of these SMEs, perhaps you’ll be the one to usher in the change.