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Reasons to Celebrate if You are in Scottish Fintech

As businesses start to find their feet during the continuing pandemic, I wanted to look at some of the challenges, opportunities and collaborations that have continued to happen in the Scottish Fintech scene throughout the year.

While it’s been a challenging year for a lot of people in innumerable ways, our fintech cluster has met the challenge head on and there have been some extraordinary partnerships, growth in the cluster and some smart-thinking businesses looking at a post-covid-19 world.

These are only some of the reasons to celebrate if you’re in Scottish fintech.

Scotland’s FinTech cluster is growing

In spite of everything, it’s been a great year for Scotland to establish itself as a world leader in fintech.

Not only has the cluster grown by 60% between 2019 and 2020, Scotland’s FinTech Cluster is the first cluster in the UK (and only the third in Europe) to be formally recognised by a European accreditation body as a cluster of excellence.

This comes around the same time that the cluster has been given a £22.5 million boost in investment and support to build a Global Open Finance Centre of Excellence in the central belt area. The centre will help drive innovation to deliver social and economic benefits across open banking and financial data.

The new investment and accreditation of the cluster show the resilience and agility of Fintechs to build solutions and adjust and pivot to market needs and changes.

This is underpinned by the fact that venture capital in Scotland from April to June has increased, despite the pandemic and political uncertainty. Twenty-two deals were completed with a combined value of £62 million. This growth is set against a backdrop of VC deals falling in the UK over the same period.

There is increased opportunity for collaboration

A combination of the growth of our fintech cluster and the way that Covid-19 has shaped the need for fewer face-to-face customer experiences has created some new and unique opportunities for fintechs to collaborate with financial institutions.

Two of my favourite examples sit at completely different ends of the spectrum.

DirectID has seen opportunities for collaborations grow as it works with banks and financial institutions to help them re-think how they can use customer data to make faster, more informed decisions about lending, credit and risk assessments in an environment where historical credit scores may not be accurate because of furlough, job losses and people moving into new jobs.

The second is Scotcoin, which has found new opportunities in helping to support the Scottish economy and vulnerable people through its charity and community interest focussed activities. Originally founded in anticipation of Scottish independence, Scotcoin has engaged the Scottish government to talk about how its blockchain technology and IP can be used to help make Scotland, and its people, better off.

We're looking at an optimistic end to the year

While there is continued and considerable uncertainty for businesses across the UK, there are a lot of reasons for the Scottish fintech cluster to feel positive.

The cluster feels as resilient as ever and open to new opportunities - through collaboration, funding or evolving their offerings to help businesses find their feet.

The continued growth and resilience of the sector are shaping up for a positive end to 2020 and putting the industry in a good place looking down the run up to the 2021 calendar year.