Financial services leaders gathered in Edinburgh under the remit of a Big Four accountant to discuss where the sector goes next and it was no surprise that they concluded that developments in fintech will underpin its immediate prospects.
Innovation is at the core of any sustainable business and it’s fair to say that Scotland’s financial services industry has a distinguished history of invention and re-invention. From investment trusts and cash machines to point of sale systems and fingerprint credit cards, there has been no shortage of good ideas.
The KPMG Future 30 meeting heard from some of those at the forefront of the latest developments, though they were not without their warnings about the need to think a little differently and, crucially, to ensure there is sufficient support for the emerging technology.
One contributor, Loral Quinn of Sustainably, said it was encouraging to see so much new talent coming through in Scotland’s fintech sector, but added that ensuring the right skills are available to grow and compete globally is going to be crucial: a message, perhaps, to ministers to ensure that the next generation is being prepared for the jobs of the future. An interesting announcement came out of Singapore this week that all schools will include coding as part of the curriculum. It’s the model to follow.
Quinn added that the Scottish eco-system has provided a great foundation for a number of success stories, but the “reality” is that success in this field needs to be on a scaled-up international level. The key to Sustainably’s success was tapping in to the right markets and funding support around the world. This global mindset meant Scotland had to make sure it was not insular in its thinking .
For all its tradition and expertise, financial services cannot progress in a bubble and certainly cannot afford to be complacent. The focus of financial services has constantly evolved and the key to progress is the application of technology across the industry to keep it at the forefront of meeting new customer demands, particularly in mobile and online banking and investment.
While the Future 30 discussion touched on the thorny issue of trust, there was little mention of ownership. Having a “global mindset” to develop the technology was identified, but global pressures over who controls it is another challenge facing the sector. Scotland’s financial services may be thriving, but the industry is increasingly run from elsewhere as historic businesses such as Bank of Scotland, Scottish Amicable and Scottish Life have been absorbed into conglomerates run mainly from London. Royal Bank of Scotland, nominally headquartered in Edinburgh, is really managed from Spitalfields, rather than Gogarburn.
Now the big multinational guns, such as Amazon, Google and Facebook are creeping into the sector, the latter at advanced stages of developing a cryptocurrency. The ongoing dispute with Huawei is another indicator of the power of big global companies, not only to control the money, but to dominate the development of technology and its application.
News on the agenda
As staff at The Scotsman titles re-arrange the desks from two to one floor of their head office in Edinburgh’s west end, the owner will be closing the deadline on potential offers for the titles.
It’s 14 years since Johnston Press paid £160 million for the papers which, even at the time, looked a bit toppy. With the entire group of 200 titles virtually worthless when it collapsed into administration last year, the current owner JPI Media will be lucky to fill a supermarket carrier bag with the proceeds of any sale.
Interested buyers have been sent information about the company’s assets that contains what are said to be “optimistic” forecasts about their growth potential via a subscription-based model.
Any expressions of interest must be lodged by Monday and given the short timescale it would be no surprise if JPIMedia has not already got a buyer lined up.