Skip to main content

Open Banking – the UK’s next biggest export?

According to Accenture, there’s $416bn of revenue at stake for fintechs and banks across the world by the end of this decade. That’s roughly four times the size of the scotch whisky market ($91bn) – so is Open Banking the UK’s next iconic export? Maybe”¦ but only if we make some important changes 

Last week, we released a piece of research – The Global Open Finance Index. It tracks the development of Open Banking across the world and focuses on the 23 countries where we’re seeing the most progress. Its findings are fairly stark. The UK’s position as a leader in the space, which was once completely uncontested, is now in serious danger of evaporating.

Countries like Brazil and Australia are accelerating with regulatory regimes that already go far beyond the UK’s initial blueprint whilst markets like India and the US are finding different approaches leveraging market forces and industry collaboration to create huge potential. India’s Open Banking standard now covers a group of more than 1 billion accounts whilst in the US 42 million accounts have coalesced under the FDX standard with zero regulatory push. Perhaps even more significantly, that regulatory push is coming in the US and soon. The Consumer Federal Protection Bureau (CFPB) is already in the late stages of consultation on how that process should be rolled out and they have the legislative backing to get it done.



 

So where does this leave UK fintechs? 

I have no doubt that Open Banking and (eventually) Open Finance will have profound impact on the UK, revolutionising our credit market, bringing huge, excluded groups into mainstream finance and providing differentiated competition to the card rails, but in terms of the economics, the real prize is still on the table. 

UK firms have built businesses that are designed to handle large quantities of API-driven transaction data. They’ve developed the security systems to protect the data, the skills to handle, clean and contextualise it and the case studies to prove how impactful that data can be. They are, in short, in a position of huge competitive advantage vs companies at the beginning of this journey in evolving markets. In order to maintain that advantage though, they have to keep working at the cutting edge of the technology, here the UK is falling down.

Australian firms are already working with Open Energy data, Brazilians are getting to grips with the wider financial product set through their country’s Open Finance programme. 

We have to accelerate progress in the UK and the opportunity to do that is here. 

On the public policy side, we need to establish a strong, independent body to preside over the future of the sector, we need to move on Open Finance, (the data bill is sitting in a drawer in parliament and should be moved forward as a priority) and we need to think about how we can build regulatory passporting into trade deals as we sign them.

On the market forces side we need more banks to take a leaf out of NatWest’s book and accelerate the development of premium APIs, we need to align on risk and liability frameworks for the use of these and work towards clarity for the market on commercial details. Finally we need better engagement between institutional lenders and retail lenders that use open banking data. Cost of capital is a major hurdle for Open Banking’s proliferation in the lending space and this both can and should be addressed. 

This is a blockbuster agenda for 2023, but if we can get it done the prize for UK firms will be transformational. If we can’t, Open Banking will still have a major impact on our domestic economy but it might not be the firms hiring UK talent and paying UK tax that deliver it. This is not beyond us. There’s a lot to do but if we lace up our trainers, I’m very confident that we can make it happen.

A FinTech welcome to 2023!

January 2023 marks FinTech Scotland’s 5th birthday! Across that time we’ve seen fintech numbers grow, investment build, partnerships develop, international opportunities prosper and fintech adoption accelerate.

The occasion gives us an opportunity to reflect, consider the future and celebrate the fantastic progress of fintech firms in Scotland.

Over the years these fintech businesses have grown in number, collectively raised over £530m in investment and continue to build businesses with longevity and scale in mind, that deliver positive outcomes for people, businesses and society. It’s a resilient and inspiring group of innovators and leaders and I’m looking forward to the year ahead and the future opportunities to come.

The birthday celebrations were one reason to cheer, another was the news that Stephen Ingledew, our founding father and now our Executive Chair was honoured in the New Years honours list!

A further cause for celebration on two fronts.

Firstly, it’s a richly deserved mark of Stephen’s leadership and commitment, and secondly, it’s another indication of the value that’s placed on fintech innovation across the UK. We’ve always known the value that fintech will bring and it’s given us a further spring in our step as we welcome the possibilities for 2023.

We started those possibilities with an event connecting Space innovation and FinTech innovation. On a bright morning on the 11th of January, in a room full of space tech and fintech innovators, financial and professional service experts we gathered to discuss what we could achieve if we explored the connection between Finance and, Satellite data such as earth observational data or EO to those working in the Space sector.

The answer came when we joined the dots on sustainable finance, and ESG’.  There are several pioneering companies, already innovating in this space.

Trade in Space, EarthBlox, Space Intelligence or Terrabotics are great examples of fintechs using earth observational data and technology. Their capabilities can help build confidence in green investing, will shape the future of infrastructure and real estate insurance, build clarity on the environmental impact of supply chains, and help businesses demonstrate regulatory compliance!

The day set the tone for more to come, watch this space!

Data Driven Innovation continues to inspire us, and while we might be at the beginning of our work with Space to drive Climate-FinTech possibilities, other data driven innovators are striving ahead.

January has seen an even stronger renewed focus on financial inclusion, with fintechs including Inicio.ai, Amiqus, DirectID, MoneyMatix, Soar and Inbest.ai continuing to grow and deliver change for citizens across Scotland and the UK.

More than ever, we’re confident that the purpose and intent from the Scotland’s fintech community will help drive the products and services needed to help address the challenges we continue to face.

The potential for 2023 continues, with partnerships and investment top priorities.   Br-dge kicked off the year announcing its partnership with Visa and its growth plans for the year ahead! Gigged.ai kicked off investment news with a £1.6m raise to fuel next stage development.

And I’m looking forward to more! Welcome 2023, I’m looking forward to seeing business grow, fintechs scale, investment continue, and more collaboration develop.

On a personal note I’m looking forward to more daytime daylight and a stretch to the evening!

I’m also looking forward to seeing you in February! Please join us on Wednesday 15 February for our first in-person gathering of the year as we celebrate success and look forward to 2023.

”˜Consumer’ data has failed its creators

Consumer data’ is a remarkable quantity for the lack of ownership afforded to its eponymous creator ”“ the internet browser, the Google-er’, the consumer. Indeed, all of us are the creators of digital data from which Big Tech ”“ Google, Facebook, Amazon (you know the names) ”“ have achieved their giant status.

In fact, each time we open a website or app we leave behind a digital footprint used to track our movements across different websites and applications. This trail is inspected by Big Tech’s pack of algorithms, subsequently, determining’ a web user’s probable interests in products, ideas, and trends. With such an accurate’ determination of human interest at its disposal, Big Tech amasses a library of consumer data that it sells to advertisers, generating a lucrative revenue stream.

The relationship between consumers and advertisers goes back to Roman market squares and still serves just as important an economic function today. Yet, in today’s digital context, the creators of the industry’s most prized resource ”“ data ”“ have been excluded from sharing in its reward.

How has such an intrinsically unjust state of affairs survived for so long? Largely because consumers have been misled. In the first instance, consumers have been made to believe that their data holds no personal value. Secondly, that lack of control over data and, indeed, privacy is inseparable from the internet. While, this is slowly changing, with users now able to opt out of certain trackers, Big Tech is still aggressively trying to force us to adopt them: even if a user chooses to reject certain targeting preferences, they are often forced to confirm every time they enter the site or until impatience overcomes concerns.

Although they have certainly been egregious, we cannot place the entire blame on Big Tech, advertisers also have much to answer for. Advertisers spend approximately £27 billion a year on digital marketing, for the most part, this goes straight to Big Tech. This enormous expenditure is justified because it is, in actuality, an investment ”“ an investment made to entice consumers to spend. Moreover, in today’s digitally entangled economy in which jobs, networking, and day-to-day life are so dependent on internet access, the reach of advertising is inescapable. And so, we exist within a digital ecosystem that demands we share our thoughts and data with Earth’s largest corporations, only to boost our own likelihood to spend.

Undoubtedly, this status quo must change. Consumers must recognise the worth of their data and demand remuneration. Meanwhile, advertisers must stop encouraging and feeding Big Tech with the dirty cash that encourages such malpractice. The objective of advertisers must shift from only selling to selling and rewarding. In short, advertisers who seek access to consumer data must provide them with benefits.

Fortunately, the emergence of direct-to-consumer marketing apps and platforms has made such solutions a reality. For advertisers who market via such platforms, they unlock the ability to directly communicate with target consumers, in return offering the latter cash benefits and rewards. It is the responsibility of the platforms themselves to keep the end-user in mind, leveraging their position to ensure consumers get access to the highest value rewards. Furthermore, consumers are able to identify a preferred level of privacy, exchanging a level of data access on a quid quo pro basis to maximise cash benefits, all while driving a positive feedback loop of more relevant ad targeting.

By using direct-to-consumer marketing platforms, consumers can finally reclaim the right to their data and expect a fair price for its exchange. The current economic environment, undoubtedly, makes such solutions particularly enticing.

Though, far more importantly, direct-to-consumer platforms are resetting the relationship between data and advertising, shifting power away from Big Tech and back to consumers. Slowly, we march towards a future where digital data is not a price tag of the modern economy, but a precious commodity back in the hands of its creators, who financially benefit from its transparent and consensual exchange.

Mohsin Rashid is the CEO and co-founder of ZIPZERO, which offers a mass-market consumer solution to the cost-of-living crisis. Shopping via the ZIPZERO app earns users cash to pay bills ”“ the cash rewards are funded by retailers and brands, which gain access to a formidable direct-to-consumer marketing platform, allowing them to divert a collective £27 billion digital advertising spend back to their own customers. Through its compelling consumer proposition, ZIPZERO has become a prolific source of first-party, product-level consumer data. ZIPZERO is inviting major utility firms, leading retailers & brands (advertisers) to make active use of its progressive platform and help UK consumers tackle the cost-of-living crisis.

The Critical Role Partnerships Play When Scaling Fintechs

Blog written by Greg Watts, CEO at Findr

Alongside raising investment, securing the right partnerships is critical for business survival.

Indeed, in a recent research report from PwC, over 75% of CEOs rated partnerships as important’ or critical’ to their success.

Yet with many partnerships taking months if not years to come to fruition, it’s no wonder that so many businesses fail ”“ and waste considerable resources ”“ in the process.

So why do so many fintechs struggle with what we call the partnership problem?

Here are some reasons:

  • They haven’t identified the right target partners;
  • Their approach is too generic;
  • They haven’t spent sufficient time identifying key stakeholders;
  • Their offering and content doesn’t resonate with target partners;
  • They don’t spend enough time or resources in the right places generating awareness.

In this article for Fintech Scotland, we’ll explore why businesses struggle with the Partnership Problem and provide tools and tips to enhance your approach and accelerate your efforts.

 

Get focused

In theory, partnership development is a straightforward process.

However, many businesses often fail at the first hurdle ”“ which is to have a razor-sharp focus on targets.

For example, it’s quite common to hear that a fintech wants to create partnerships with all’ retailers or banks in a particular market, then expect their sales teams to hit the phones and secure meetings.

However, with finite resources, that approach often misses the mark.

Fintechs ”“ and indeed, all businesses ”“ need clear partnership criteria.

The criteria for each business will vary, but some questions to consider may include:

  • Which verticals, sectors or categories do you want to focus on? Within those, what are the priorities and why?
  • What are the characteristics of your target partners? For example, are they high frequency retailers such as coffee chains or do they boast high transaction values, such as luxury brands?
  • How easily can you partner with them? For example, a Tier 1 retailer such as BP or Asda is likely to take more time to partner with than a smaller coffee chain. Given how important time to market is ”“ it can often take months if not years to partner with large businesses ”“ targeting smaller partners initially to create case studies that demonstrate the value of your proposition may be a more efficient strategy.

Once you’ve evaluated your target partners, assign weightings to provide focus on where to spend your time and resources.

 

Sharpen your door opening approach by creating buyer personas

How often have you received a cold, un-researched introductory note on LinkedIn or via email?

It’s remarkable that so many businesses don’t tailor their approaches, then wonder why they don’t receive a response.

In fact, if you haven’t met someone before, you have less than a 3% chance of securing a meeting with them (unless you’re on Findr of course – where we average 27%)

It’s imperative you know as much as you can about your target partners before you approach them ”“ or any resources used to try and engage them will simply be wasted.

To maximise your chances of getting a meeting with a target partner, you need to make assumptions about what they may be looking for to help you tailor your approach.

To do this, it helps to develop buyer personas from which you can create content that makes them want to engage with you.

As you create the personas, points to consider are:

  • What problems do you fix?
  • What benefits do you offer? How do these compare to other players or competitors?
  • Why should they engage with you?
  • What channels do they engage with? How can you reach them?
  • Which events or forums do they attend?
  • Who ”“ if anyone ”“ do they currently partner with? And, critically, why would you be a better partner?

Cluster them to create segments with common challenges and issues you can solve.

Ultimately, you need to articulate why they should engage with you.

Once the personas have been created, you can focus on your content plan, encompassing your website, social media feeds, thought leadership and other marketing efforts.

 

Make it a team effort

Too frequently, partnership development and lead generation are viewed as the sales team’s responsibility.

Yes, the role of a salesperson is to sell ”“ however, he or she must have the full support of the business behind them to generate leads. Without that, the effort is likely to fail.

At Findr, we believe that the entire organisation should be involved in generating business and creating partnerships ”“ albeit in different ways ”“ and that any efforts not focused on growing the business should be questioned.

Thinking of it in these terms can help galvanise and focus your resources.

 

Bringing it all together

Creating partnerships sounds easy. However, without the right planning and focus, the results may be disappointing.

Being ruthlessly clear on who you’re targeting and why they should engage with you ”“ and then creating content that resonates ”“ is the most effective approach to creating long term, valuable partnerships.

Photo by Savvas Stavrinos: https://www.pexels.com/photo/monochrome-photography-of-people-shaking-hands-814544/

Tackling security and trust in digital payments

Fintech Tables are back for their second event. Sponsored by Pinsent Masons it focusses on payment, one of the 4 key themes highlighted in the FinTech Scotland Research & Innovation Roadmap.

Those events, organised by BDM Media, provide a platform for discussion to support developments and initiatives around the four key pillars of the Roadmap; financial regulation, payments & transactions, climate finance, and open finance data.

This second event focusses on payments and transactions and more specifically about how organisations can build security and trust in digital payments.

Payments has always been the leading area of innovation for fintech companies in Scotland utilising innovations such as open banking and embedded payments making it faster and more convenient to pay and transfer money both locally and globally.

As digital payments continue to grow in the UK and around the world, so do online fraud, digital crime and cyber attacks with over £1.2 billion through fraud and scams in 2019.

This event will welcome many guests including:

  • Lloyds Banking Group
  • Eeden Bull
  • BR-DGE,
  • Transfer Mate
  • Occamsec
  • Police Scotland
  • Scottish Business Resilience Centre
  • The Payment Systems Regulator.

The group will consider the exciting opportunities offered by digital payments alongside the strategies that financial services organisations need to deploy in order to build and maintain security and trust in these innovative solutions.

More details on the event and others in the series can be found at www.fintech-tables.com

Fintech ”“ never an overnight success

By Anthony Rafferty, CEO, Origo

At the beginning of 2022 everyone was breathing a sigh of relief as the worst of the two year pandemic appeared to be behind us. We looked ahead to 2022 as a year when we could get back to normal’ again.

A year on and the world is looking at a global recession, we have a war in Europe and in the UK, high inflation, rising interest rates, falling GDP and an austerity budget which will see many people and businesses pay more tax.

With the Bank of England’s warning of a two year recession ringing in our ears, there is plenty of negativity in the atmosphere.

Which is why I believe every company every year should look back on their achievements and celebrate their successes.

The tenets of success, certainly as I have found them in my many years in the financial services industry, are that it takes a lot of hard work and it takes time. “Overnight successes” are rarely ever that, but the cumulation of many hours of hard graft by a dedicated group of people, propelled by a vision, a passion for what they do and a resilience to make it work.

This is no better evidenced than in Fintech.

Origo has a long history of working collaboratively with the industry to deliver ground breaking technology. This includes the Origo Transfers Service, our current work to establish the pensions dashboard central digital architecture and our Origo Dashboard Connector, as well as Unipass Identity, Unipass Mailock, Unipass Letter of Authority and the Origo Integration Hub.

Every one of these are developments offering industry-wide benefits, helping to make the industry more streamlined and efficient, helping companies to achieve their ESG goals, as well as delivering better service to the end consumer.

Yet, despite the considerable efficiencies, cost savings and other benefits they bring to the industry, none of them have been overnight successes.

If we take the Origo Integration Hub as an example, it was launched in 2016 as a service for products providers, platforms and software houses in the savings and investment market.

We had spotted that we could help these participants achieve considerable efficiencies, cost, time and resource savings by doing away with the need to undertake resource heavy, time consuming and costly point-to-point integrations with the companies with which they needed to exchange data. Instead we built a centralised hub to which they could link once and then connect to any other user of the hub for key services such as investment valuations, bulk valuations, account opening, remuneration, transfer tracking and bulk transaction history.

It is a common-sense strategy for the industry, fulfilling the very real need for companies to be able to integrate with each other as quickly and as easily as possible. In addition, it meant the industry could become more efficient and competitive, as integrations did not depend on having deep pockets or a significant business case.

Genius, right? Everyone told us so and yet by August 2020, only 21 firms had joined the Hub.

There were plenty of good reasons for it, not least the incredible drain on resources, time and money caused at the start of the pandemic.

But having been in the market for 30+ years we were not fazed by this, as we know with projects of this kind it can take time for momentum to build. You often need your early adopters to demonstrate the benefits before the rest of the industry will come on board.

And this is what happened. As we go into early 2023, we will be looking at over 50 companies, including top industry names, who will be using the Origo Integration Hub, with others in the pipeline.

To achieve success, we have learned that along with the hours of hard graft, dedicated people, a vision, passion and resilience, it also helps to have a little patience.

So, as we head towards the end of the year, we are celebrating our successes, bit by bit and no matter how long they take to come to fruition. I recommend you do the same.

Why you can stay ahead of competition with the 4th generation of data-driven NoCode technology

You might have heard that Lowcode/Nocode are rising fast as one of the most promising enablers of the digitalization, especially with the pandemic situation urging all organisations, public or private sectors to release various apps fast to keep track of staff, customers monitoring as well as keep business running as normal. However, one can be easily confused by so many lowcode/nocode products in the market and not really sure what would really benefit his/her particular company. Let’s take a look at the evolution history of lowcode/nocode first.


Lowcode appeared on the horizon around 30 years ago along with the internet hype where we all had some kind of encounter with the 1st generation of lowcode, which provides pre-stored templates to drag and drop to create some websites without knowing how to do coding. That’s the very first generation of lowcode, we call template-driven, or form-driven lowcodes. Still today in the lowcode market, a majority (around 95%) of lowcodes are based on this mechanism, but this type of template-based lowcodes is not very flexible to change already-set templates and certainly not capable for enterprise-class software development which demands highly complex operational process and logic building. 

Then around 15 years ago came along a more advanced lowcode type called model-driven, today’s most dominant enterprise-class software development market is this type of lowcodes, as they brought along the model-building mechanism which enables much more complicated and sophisticated enterprise-class environment applications. These lowcodes represent the 2nd ”“ 3rd generation of lowcodes. 

However this kind of lowcodes also has a serious drawback, which is inflexibility caused by human-created modelling. As it requires highly skilled IT professionals to build the data modelling to enable front end applications, whenever, yes we all know how often it happens, the front end user requirement changes, or new business situation arises, or any changes happened on the business front, the already-built modelling cannot work with the new changes anymore. With no choice, it demands the backend modelling to be rebuilt. However, in the data model, each data is linked with a complex web of data in a multitude of tables in database, a small change will involve a huge amount of work to redo the whole modelling, which demands not only highly skilled IT staff but also someone familiar with the original modelling, which poses the greatest difficulty for most companies, not to mention time and money to invest in. Therefore, the 2nd-3rd generation of model-driven is not flexible enough to cope with today’s VUCA era with bigdata environment. 

When it comes to the 4th generation of data-driven NoCode technology, it takes a completely different and innovative approach to application development: leveraging integrated data sources from various operational IT systems and turn the data into data assets, it allows data to become highly intelligent and autonomous, can auto-detect relationship with data from heterogeneous data sources to create auto-data modelling, this automatic modelling by data themselves greatly eliminates the human intervention, reduced hefty skilled IT staff workload and ensures high level of flexibility, as the modelling can be broken down and rebuilt at any time- anywhere with front end requirement.

 

 

For data-driven NoCode, it also differentiates from lowcode in the aspect that Lowcode serves more target users of IT professionals by providing system generated coding for them to copy and paste into their programming, but Nocode removes the coding barrier once for all, that the users don’t have to know anything about coding and can drag and drop to build any workflow, analytical reports and applications according to their needs. This character means it allows not only non-IT business users to build their own bespoke workflow and applications they truly need and tend to use more frequently, but also can largely reduce the qualification for software developers for software vendors, reducing their personnel expense and therefore improve bottom line. On Average data-driven NoCode can deliver enterprise-class complex applications within 3-6 weeks with a handful of junior engineers, around 70% further lead time reduction from model-driven NoCode products, and even more from the traditional fully human coding (high code) software development lead time of 1-2 years. 

Till now you must be able to realize, how much faster time-to-market and time-to-cashflow the bigdata powered NoCode can bring to the customers, that’s why in many cases start-ups and scale-ups can attract VC investment much more easily with Nocode platform built in. 

 

Even with the IT skill barrier removed, it does not mean NoCode replaces the programmers. Instead, the programmers can be relieved from many hours of low-value-added mechanical coding work to focus on higher value-added business know-how and customer centric work, while delivering software and applications much faster, thus creating much more value for their companies. 

 

So to wrap it up, you can see quite clearly what values one can get from the 4th generation of data-driven NoCode technology:

  1. Faster software development lead time (Average 3-6 weeks)
  2. Reduced IT skills = reduced personnel cost
  3. Great time-to-market and time-to-cashflow
  4. Eliminated data silo problem due to bigdata platform foundation (this is very important feature which we will have a dedicated article to talk about it, stay tuned in)
  5. Multi-party coordinated development as well as software building on-the-go with auto-modelling, what you see is what you get
  6. Enterprise-class competency and real big-data capabilities
  7. Highly improved profitability
  8. Non-IT business user friendly, higher success rate of applications built

Written By Shan You, SVP / MD for Overseas at Smardaten Technologies

Photo by Christina Morillo: https://www.pexels.com/photo/person-using-silver-macbook-pro-1181467/

Blockchain, a key driver for economic growth

Article written by Maciej Zurawski, Founder and CEO, Musemantik

We all know technological innovations are a key driver of economic growth. Innovation is so essential to increase the productivity and efficiency of value creation that economists attribute a staggering 85% of the economic progress in the Twentieth century was to technological innovations. For those of you keeping score, that’s a little over five of every six dollars that the world economy grew by in the last hundred years can be directly credited to technological advancement. What may surprise you is just how much developing Blockchain technology can further this trend towards prosperity.

Blockchain is a novel development in computer science that can escalate economic growth radically through personal value creation. Fundamentally, it is a technology of distributed data and digital assets that are spread across a global, decentralised computer network. New data is chronologically recorded in blocks that are cryptographically in a permanent chain of synchronised information. This information shared is public and does not rely on any centralised actor for it to operate and consequently cannot be manipulated by corrupting information on a central server. Data contained within the blockchain is completely secure and trustworthy allowing for applied use of data in new and valuable ways. In the same way that instant communication revolutionised the economy, totally secure communication offers incredible economic, social, and societal benefits. We at Musemantik believe that the Scottish economy is particularly poised to adopt Blockchain and to take advantage of the myriad benefits adoption will bring.

In brief, we estimate a £2.46 billion contribution to Scotland’s GDP by 2030 as a consequence of information transparency, £1.1 billion in efficiency savings, and a £4.48 billion general increase in GDP as a consequence of adoption. [I] We encourage general implementation of blockchain solutions to capitalize on their benefits to create value for Scottish society. By encouraging socially responsible supply chain activities, implementing user-friendly health care systems, and reducing the costs of data transactions or financial intermediaries this have the potential to increase the national wealth substantially.

[i] The calculations are based on the figures in the “Time for trust” report of PWC (2020) and on the share of Scottish GDP from the total GDP of the UK.

Photo by RODNAE Productions: https://www.pexels.com/photo/silver-and-gold-round-coins-8370389/

Fintech in Scotland – Connect, Collaborate, and Cultivate

Over the last few weeks, the FinTech Scotland team has had the pleasure of working with an intern from Portobello High School as part of a Career Ready programme. It provided us with an opportunity to support a young person think about the future of work, but more importantly it helped us see through a young learner’s eyes, the excitement and curiosity fintech generates. The power of those questions from a someone with no industry baggage or background yet, is striking.

His facial expressions and questions ranged from sheer surprise to genuine delight, and with a work focus on planning the FinTech Scotland Festival we were delighted to have another set of eyes, ears and thoughts help develop the plan.

Our new young colleague summarised his experience under four key themes. In his view FinTech enables communication, connection, and collaboration, and together these are helping to cultivate the future of finance. As we look towards the FinTech Scotland Festival these themes really set the tone.

 

The FinTech Scotland Festival

This year We will connect and reconnect with new and old colleagues across the UK and across the world. We will share, listen, learn and have the privilege of some key messages, communicating on the journey so far and the ambition for more.

We’ll celebrate the growing strength of the fintech community in Scotland, and the brilliant entrepreneurs cultivating the future of finance and achieving record levels of investment.

Across the festival we’ll hear more about their plans and ambitions including Snugg’s plans to enable us all to make our homes more energy efficient through fintech, DirectID’s global growth in helping people get fairer access to necessary lending, and Legado’s continued focus to help us get all of our financial lives more digitally organised as we move away from paper-based experiences to digital ones.

We’ll also see Know-it who are gearing up to help businesses manage credit, and Waracle who are helping so many larger Enterprises embrace the possibility of doing business through mobile.   Amiqus, will share plans on driving fairer access to better services for people, while Float will show the future of financial management for businesses through a business unique financial command centre. The list goes on and we’re proud to show the advances and flourishing potential.

We’ll also explore emerging fintech innovations, be curious about next generation finance and discover the art of the possible as we collaborate across FinTech and Space innovation to help the climate agenda.

The Festival lift off is on the 15th of September with the FinTech Summit. As ever this event and the Digit team set the scene, tone and ambition for the following three weeks where we will explore the world of fintech. We will land on the 6th of October to celebrate the journey with the Scottish Financial Technology Awards.

I’m really looking forward to it all, meeting people, learning, sharing experience and celebrating success.

And a final note of thanks to Jack, our new intern colleague. While Jack will return to school in the next few weeks, he has left an lasting impression that we’ll not forget.

How can fintechs access non-dilutive funding?

Entrepreneurs experience a myriad of challenges when it comes to raising capital to fuel their growth, especially at the early stages of their business.

Startups and other SMEs can now access a range of non-dilutive funding solutions at key stages of growth, including R&D Advance funding, Grant Advance funding, and Revenue Advance funding. These are alternatives to equity capital that can provide fast-growing innovative businesses with access to growth capital affordably and quickly.

These funding options help businesses by supporting investment into research and development, bringing forward project delivery timelines and helping to manage project cash flow. They also provide flexibility to support strategic investment outcomes, generally. For example, companies are now looking to R&D funding to help extend cash runway, through fundraising activities (e.g. Series A), to support increased valuations and maintain founder ownership levels. 

In the UK, R&D advance funding continues to grow. With an estimated 85,900 R&D claims for the year ending March 2020 (an increase of 16% from the previous year) and expenditure on R&D performed by UK businesses also showing ~3.5% YOY growth, businesses are now recognising the valuable opportunity provided through this form of non-dilutive funding.

Globally there are c. USD 350bn of assets owned by companies that have previously been unrecognized by lenders which can now be used as collateral to lend securely. Advance funding is similar to accessing any type of loan ”“ it simply uses future tax credits, grant payments or revenue, as collateral.  

 

Blog article written by Hamish Gregory, Director Strategy & Operations at Fundsquire

Fundsquire will be at the Scotland Fintech Festival. If you’d like to chat to the team at the event as well as get a chance to attend panel and networking sessions hosted by Fundsquire at the event, register your interest here.

Photo by RODNAE Productions: https://www.pexels.com/photo/marketing-exit-technology-business-7413915/