Scotland Sheds Industrial Rep For FinTech Focus

Scotland’s economy has excelled in industrial industries such as shipbuilding, steel and petroleum, but the country is turning its attention to developing a rising digital tech scene. In this week’s installment of PYMNTS’ Weekly Tech Center Roundup, one of the country’s thriving tech clusters, Glasgow, takes center stage.

Before we jump into the post, here are a few quick facts about Glasgow and its tech scene:

Glasgow it the largest city in Scotland and the third largest in the U.K., with an estimated population of 1.2 million.

Glasgow is considered an attractive destination for establishing business due to its well-educated and highly skilled population, as well as a high level of labor availability.

The city is ranked within the top 20 of Europe’s best performing financial centers and ranked fiftieth worldwide for its economic performance.

Glasgow makes the highest contribution (16 percent) to GVA of all cities in Scotland.

According to Tech Nation, Glasgow has a total digital GVA of £480 million.

Notable sectors in Glasgow include FinTech, eCommerce and marketplace, social networks and enterprise software, and cloud computing.

Glasgow is undergoing a transformation — from industrial powerhouse to leading digital technology cluster.

The city’s diversity and livability, as well as political and economic disruption throughout the region, have made it home to a new breed of digital tech startups.

Eric Schiffer, CEO of Patriarch Organization, described the country’s startup and tech scene as very innovative, aggressive and collaborative.

“It’s a premium scene without the heavier costs of doing business you find in other European nations,” he recently told PYMNTS.

Many sectors are thriving in Scotland, including FinTech, eCommerce and enterprise software as well as app and software development.

“From an outsider’s perspective, it appears as though Scotland is more spiritually aligned with Europe than other parts of the U.K., and I have no doubt that FinTech companies looking to enter the European market are thinking long and hard about alternatives to London right now,” Gregg Schoenberg, head of advisory and investment firm Wescott Capital, told Service Design consultancy Nile in a recent post on Medium.

“Scotland and its financial services and technology sectors would be smart to remain agile during this period,” Schoenberg continued.

As part of the FinTech push within Scotland, the U.K. government announced that it will appoint two FinTech envoys in the country ’ David Ferguson, CEO of Nucleus, and Louise Smith, head of design in personal and business banking at the Royal Bank of Scotland.

While Scotland is home to many large FinTech firms, including Nucleus, LendingCrowd, the ID Company and Float, the envoys will seek to help build a broader and more supportive ecosystem, the HM Treasury, Scotland Office and Economic Secretary to the Treasury Simon Kirby MP confirmed in the post.

The potential for FinTech greatness in Scotland is certainly there.

The country is second only to London for producing the largest number of FinTech-related graduates in the U.K., representing 12 percent of the annual 97,000 graduates.

“Think of it like baking a cake. In terms of ingredients, what does a FinTech hub require?” Graeme Jones, CEO at Scottish Financial Enterprise, asked. “Universities that provide high-quality postgrads, big financial institutions, a startup and enterprise scene, strong international connections. We’ve got the lot, and to make a success of it, we’ve just got to start connecting things up.”

Schiffer echoed this sentiment, adding that the FinTech environment in Scotland is skyrocketing and will only continue to flourish.

“The world’s largest financial institutions like Morgan Stanley and RBS all have a local presence, and there’s finally a pool of talent to tap into that wasn’t previously available,” he explained. “It’s been under the radar for so long but is starting to get the attention it deserves. It’s finally busting out of the long shadow of London.”