Fintech Growth and Trends
11 October 2017
Fintech is a rapidly growing industry in Scotland, with Edinburgh ranking 15th out of 44 financial centres in 2017 following an assessment by the Global Fintech Hubs Federation. The swirl of excitement surrounding the importance of Fintech is already clear, with the Scottish National Party’s ‘Programme for Government’ outlining “the goal for Edinburgh to be ranked in the top 10 global Fintech centres by 2021”.
Such a goal is to be achieved by “providing £250,000 over the next two years… to support a virtual Fintech hub and the establishment of Fintech Scotland”. But “why is Fintech so important?” you may ask. And “how will it affect me?”
The emergence of the global financial technologies industry has opened doors for new up-and-coming businesses to achieve funding. A new business requires large quantities of monetary funding in the form of a loan, which without Fintech, would be secured through traditional avenues such as a local bank.
The introduction of Fintech allows smaller business to ‘crowdfund’ on websites such as Kickstarter and Gofundme for the necessary financial funds. Not only is the transferal of money simple and reliable, but it allows smaller businesses the immediate opportunity to become a fully functioning and globally recognised brand very quickly.
The arriving growth of the Fintech industry brings with it a smorgasbord of other technological innovations and assets. The Blockchain technology is a trend attached to the Fintech industry that is turning more and more heads as its use becomes increasingly more widespread. Although the term Blockchain Technology may not be so quickly recognisable, it was originally devised for the familiar and ever growing digital currency Bitcoin. Don & Alex Tapscott, authors of Blackchain Revolution, described the blockchain as “an incorruptible digital leader of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
For example, if you were to purchase an item from a store, the transaction would have to go through a third party (in this case your bank) before it made its way to the retailer. Blockchain allows the consumer and supplier to transact without the need for a middleman. This technology broadcasts all transactions onto a digital public ledger, however it is perfectly secure since its infallible design – through the use of cryptography – prevents any users from cheating the system.
Blockchain technology can be applied to more than the online exchange of Bitcoin, harbouring the potential to completely change the way individuals pay taxes, purchase property and luxury goods.
The Fintech industry will – if it has not already - change the way businesses transfer money and catalogue their transactions. Perhaps in the future, the need for banking corporations will ultimately become obsolete with consumers and vendors being able to communicate and transact without the need for this third party.
Nevertheless, if both Blockchain technology and the banking system is deconstructed, society can always resort back to using cheque books, faxing transaction receipts, and writing on parchment paper.
If you would like to speak to me recruiting for Fintech, I’d love to discuss the candidates I currently have available. Click here to see my details and have a confidential chat.
Written By Shona Preston