THE CHIEF executives of numerous financial and technology businesses are coming together with leading universities to drive Scotland to the forefront of the open banking revolution.
Under the leadership of Ross Laurie, a special adviser to Deloitte’s Blockchain Lab, the group is aiming to establish a financial technology “ecosystem of excellence” that will make Scotland a global leader in that space.
Mr Laurie said that following the launch of open banking earlier this year he, Castlight Financial chief executive Phil Grady and Money Dashboard founder Gavin Littlejohn felt the time was right to put Scotland back on the financial map.
“We were musing about open banking going live and said that within a square mile in Edinburgh we’ve got 10 companies that are at the front of the game,” Mr Laurie said.
“Scotland has a wealth of talent - in terms of the size of the country we seem to be punching above our weight.
“It feels like open banking has come along at a time when Scotland is looking for something and this could be it.”
Open banking is a secure system that allows companies operating in the financial sector to - with permission - access individuals’ current account data.
The idea behind the move is that if providers can see information relating to customers’ spending habits it will help them to innovate.
That in turn is expected to lead to more competition in the market, which should result in better outcomes for consumers.
Mr Laurie noted that while many Scottish businesses are already benefitting from open banking, being able to share datasets with start-ups around the world could cement Scotland’s reputation as a centre of excellence for fintech.
“I’ve done quite a lot in the cryptocurrency and blockchain world and I saw that when those companies raise money through an initial coin offering they put a portion of that aside to help other people start to develop a product,” he said.
“That means there’s a development budget for people to play with and I’d like to look at something like that.
“If we’re going to get serious about creating an ecosystem of excellence we could create an open banking sandbox to give access to real data.
“If someone is going to set up a new bank they won’t have customers but they could use that data to do their modelling.”
A sandbox is essentially a large set of anonymised data that is controlled by a regulator such as the Financial Conduct Authority.
Prospective businesses can apply to access that to test how their business plan would work with real customers, with Mr Laurie saying that “the only way to start working out if you have a decent business is to start playing with the data”.
Mr Laurie, who tonight will host a meeting of around 100 interested parties working in Scotland’s fintech space, said that if Scotland had its own sandbox it could use the money generated from giving access to that to set up a development fund to further drive growth in the sector.
The chief executives of businesses including The ID Co, Money Dashboard, Castlight Financial and Float - as well as representatives from the data labs at the University of Strathclyde, University of Glasgow and University of Edinburgh - will attend the meeting to discuss how to drive the idea forward.
Stephen Ingledew, the chief executive of FinTech Scotland, an organisation established by the Scottish Government, Scottish Financial Enterprise and the University of Edinburgh, will also attend.
“This feels like it could be the start of something really big,” Mr Laurie said.
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