The Scottish financial sector faces a loss of over 14,000 jobs in the next decade if it fails to embrace the the current technological revolution in banking and insurance.
Academics at Strathclyde Business School say financial technology has the potential to create nearly 15,000 jobs in Scotland over 10 years. But failing to adopt leading-edge technologies would have the opposite effect, with a loss of just over 14,000 jobs - or £635 million in wages.
Daniel Broby, director of the Centre for Financial Regulation and Innovation at Strathclyde, says: "It is critical that we create the right conditions to enable companies to develop fintech faster, if Scotland’s financial sector is to remain globally competitive. The technology exists. Either Scottish financial institutions adopt it and thrive, or they ignore it at their peril.”
Broby advocates a number of proposals to ensure Sootland's future as a centre for financial services, including:
- The adoption of a co-ordinated plan for incumbent, challenger financial companies, start-ups, Universities, incubators and the Scottish Parliament
- The establishment and expansion of a big data support facility for the financial sector, the installation of more dark fibre connecting its financial centres and the integration of timing and other digital security measures
- The establishment and the financial support for a Scottish backed cryptocurrency
- Creating a fund to invest in start-up Fintech companies, thereby giving them access to capital.
Scottish Financial Enterprise has already taken the bull by the horns, convening a Fintech Strategy group to map out a five-year plan to look at innovative new technologies in financial services and their potential impact on, and opportunities for, the industry in Scotland
Broby warns that the industry will need to move fast if it is to capitalse on the coming wave of disruption: “In Scottish bank and fund management operations, fintech is already used. This is, however, largely developed in-house and as such is not cutting edge. The gradual trend has been for traditional banks to move to off-the-shelf solutions and to leave the in-house developed legacy systems.
“We argue that this should be accelerated. There’s potentially a huge opportunity for Scotland but we need to seize it.”