Scotland has a rapidly growing fintech cluster of more than 220 thriving start-ups and many established financial services providers.
A key factor driving this growth is the range of innovative technology being developed at Scottish universities including Glasgow, Edinburgh and Strathclyde. Scotland’s strength in data, AI and machine learning are also turbocharging the scale-up of commercial fintech ventures.
The University of Edinburgh’s innovation hub for data science and AI, the Bayes Centre, is where several major financial institutions are based. Another example is global asset management company abrdn, based at Edinburgh Futures Institute, which also collaborates with the university on the Centre for Investing Innovation – a research project to address challenges facing the investment and asset management sector.
Initiatives driving fintech innovation in Scotland
The Bayes Centre is also home to the University of Edinburgh’s renowned AI Accelerator Programme, run by the DDE Bayes Centre Innovation Pipeline and Edinburgh Innovations, the university’s commercialisation service.
Through the AI Accelerator, start-ups and more established businesses have an environment to refine their commercial propositions, develop their skills and connect their ideas to applications and operations in the real world.
“We have developed the programme to provide a unique combination of training, mentorship and access to expertise,” says Katy Guthrie, AI Accelerator Programme manager.
“Businesses can access our network, including corporate supporters, the Bayes Centre community of AI and data science companies of all sizes, as well as the broader tech ecosystem both in Scotland and, importantly, also in London.”
Meanwhile, Edinburgh’s Smart Data Foundry works closely with FinTech Scotland and the Financial Data and Technology Association to encourage innovation and collaboration.
The organisation provides a secure environment where real consumer data from UK financial institutions can be safely shared with organisations tackling the biggest societal, economic and environmental problems. One prominent project from the Smart Data Foundry is a Cost-of-Living Dashboard. Developed for East Renfrewshire Council, the dashboard uses data insights and economic indicators to understand how individuals in the local authority area are coping financially and can facilitate support if required.
The Smart Data Foundry was originally based at Bayes Centre but recently moved to a new base at Edinburgh Futures Institute, on the site of the city’s Old Royal Infirmary. Part of the University of Edinburgh, the new futures institute site officially opened in June this year after a multi-million-pound refurbishment of the historic building.
In addition, the Data Lab is another considerable resource and a cornerstone of the Scottish fintech cluster. With hubs around Scotland and an extended network of more than 1,500 companies, it is where financial giants such as Barclays and Royal London can connect with fintech start-ups.
The Data Lab’s annual Data Fest event showcases Scotland’s leading role in data science and AI, while providing a networking platform for talent, industry, academics and data enthusiasts.
The dynamic financial services landscape in Scotland has allowed innovative new collaborations to take place between these institutions and rising startups. For example, Scottish fintech company Aveni AI has partnered with Lloyds to improve customer service in its life insurance arm. In July 2024, Aveni secured £11m ($14.28m) in Series A funding to further develop its unique large language model tailored to the financial services sector.
The continuing growth of Scotland’s fintech start-up scene
Scotland has always had a vibrant start-up scene, with many businesses taking advantage of collaboration and partnership opportunities within its tech cluster. Fintech Scotland’s Ten-Year Research and Innovation Roadmap, launched in 2022, has been designed to ensure that this growth continues over the next decade.
Universities, financial services brands and public agencies all have a part to play in making the cluster a success, collaborating to create a fertile environment for young, innovative businesses.
In fact, 42% of fintechs in Scotland are currently at the start-up stage, with 38% being scale-ups. Two are unicorns (each valued at more than £1bn), including global investment platform company FNZ.
Scotland is committed to fostering its culture of innovation through competitions and grants. FinTech Scotland’s Financial Regulation Innovation Lab (FRIL) announced the winners of its first innovation call in April 2024, with five fintech projects each awarded £50,000 at a demonstration day adjudicated by Deloitte, Tesco Bank, Morgan Stanley, Virgin Money and abrdn. Focused on simplifying compliance with AI and emerging technologies, the winning recipients included an identity check specialist and AI buy-side compliance.
Scotland continues to attract international fintechs
Many companies in Scotland’s cluster originally launched overseas but were drawn to Scotland’s thriving data and AI ecosystem and its available talent pool. Of course, Scotland’s enduring appeal as a place to live and work is often also cited as a significant draw.
Of the companies that have relocated to Scotland, 41% originated in the US, 31% in Europe, 17% in Australia, 7% in Asia and 3% were from the Middle East.
One such company is EedenBull, a fintech innovation company specialising in the design and implementation of B2B and commercial payment solutions. Originally launched in Norway in 2018, the company has since scaled quickly and now has 65 banks and 2,000 business customers onboarded.
Other overseas companies are choosing to tap into Scotland’s advanced data and AI innovation. In recent years, companies such as YayPay and Pace AP from the US, WeFund from Australia and Pulse Market from Ireland have chosen Scotland as a base.
Between January 2023 and September 2024, 20% of new UK foreign direct investment projects outside London were in Scotland. In February 2023, US-based fintech business Mirador, which specialises in wealth management services, opened an office in Edinburgh.
In August this year, the UK arm of Australian investing fintech Halo Technologies announced it was establishing an £8m operations and development centre in Glasgow. Alongside this, Scottish Enterprise provided a grant of £800,000. Within the next two years, the move by Halo Technologies will see the creation of more than 60 jobs in the city.
These latest additions highlight how Scotland’s fintech sector continues to grow and attract businesses from all around the world.
To find out more about how Scotland’s fintech ecosystem is enabling growth, download the document on this page.
