Shoosmiths believe Fintech offers a bright future for all

The fintech boom is changing rapidly both the way we work and how we conduct business. 

From managing our budgets and payments, to investments, insurance and obtaining loans and finance, fintech is steadily influencing everyday life. In a sector estimated to have attracted in excess of £2 billion in UK investment last year alone, Scotland hosts a thriving fintech community.

The UK Government’s Fintech Sector Strategy regards Edinburgh as one of several key fintech hubs, whilst throughout Scotland there are currently over 100 fintech start-ups and scale-ups and 16 incubators and accelerators.  

These offer fertile ground for investment from public, private and academic sources as tech savvy minds focus on bringing to market the technologies of the future. The stock of fintech in Scotland is inexorably rising and both government and industry will wish to maintain this momentum. 
 
A changing financial landscape
HOWEVER, fintech is also presenting serious challenges for those in the business of providing financial services. Traditional firms are trying to keep pace with time-cutting, automisation trends, whilst new start-ups intent on raising funds must navigate the regulatory playing field without the resources of larger firms. 

For regulators and government, keeping consumers and their data protected against fraud or misuse whilst providing the right environment for fintech companies to flourish is no easy feat. 

In an era where faster and higher-quality consumer-friendly systems and software increasingly replace traditional methods, consumers also possess unrivalled choice with access to affordable and efficient financial products. 

For example, investing apps such as Freetrade and Nutmeg give consumers greater access to global share markets and electronic funds transfers. However, while consumers and entrepreneurs embrace such innovations, the prospect of irreversible change to the financial sector can be daunting for many SME’s without the resource to surf the fintech wave.  
 
Fintech in practice
AS UK-wide financial service providers grapple with ways to stay ahead of the curve and relevant to their clients, there are opportunities for inventive Scottish fintech businesses such as Mark to Market.  

Providing fast, efficient and auditable private company valuations, it offers clients a tech driven and cost-effective alternative for conducting otherwise painstaking financial tasks. It is proving that traditional processes can be disrupted, improved and streamlined.  

Engine B, a spin-out from KPMG, is another. Shoosmiths is proud to be advising on Engine B’s fundraising for its plans to use technology to positively transform the delivery of professional services. It’s looking to upscale and transform current industry practice by developing common data models and a data access platform to improve the way clients choose service providers and manage access to their data. 

Donne Burrows, Engine B’s co-founder from Glasgow, explained: “Engine B will deliver a data access platform which will provide the equivalent open access to corporate data on a scale equivalent to open banking. 

“Today, audit firms are spending huge sums of money on their own data extraction tools but these are all bespoke to the firm and often to the client’s systems. The standardisation of client data access is a complex but narrow technological solution that will unlock competition through the next generation of digital professional services. 

“While the dawn of digital services is imminent, few firms are currently able to invest the time and resources required to offer next generation services. Engine B will leverage the audit firms to install its data access platform and will establish a key market to accelerate the development and adoption of new digital services.” 

Government and regulation
AS fintech expands on these shores, we should remain cognisant of the fact that this hotbed of tech innovation couldn’t be as fertile without the support of Government and regulators.  

As outlined in the UK Government’s Fintech Sector Strategy, public sector developments include the creation of the Innovation Hub and Regulatory Sandbox by the Financial Conduct Authority to support fintech firms to test and grow their products.  Open Banking, driven forward in 2016, allows consumers and SMEs to access a range of new and innovative products that better meet their needs, by providing third party providers with secure access to their current accounts.  

Equally, the implementation of General Data Protection Regulation (GDPR) is a reminder of the prevalence of digitisation and the need for Government and companies to protect consumer data from misuse, fraud or hacking if they are to build consumer trust in technology driven businesses. 
 
Law and tech 
Arguably regarded by some as outdated, it’s unsurprising that tech savvy entrepreneurs are also looking to shake up Scotland’s legal sector. By harnessing the power of artificial intelligence (AI), machine learning and data analytics seen in many fintech products, stand-out lawtech products are steadily finding traction in the legal market. Innovations include legal document reviewing software that at the press of a button can cut by 80% the time spent on important but previously laborious tasks such as due diligence and compliance. 

Such technologies deliver quantifiable impacts, including significant cost and time-savings to firms operating in a highly competitive sector. As law tech gains momentum, to stay relevant larger traditional firms must increasingly change the way they operate.  

I believe UK-wide law firm Shoosmiths is among firms to have positively harnessed some of the significant new law tech systems that drive efficiencies and improvement. Shoosmiths has embraced new technologies like DocuSign, Contract Express and HighQ to streamline the documentation process, using automation to fast-track time-consuming, albeit necessary, legal procedures. 

Moreover, Shoosmiths is increasingly receptive to utilising productivity enhancing software.  As experts in our respective legal fields and with a thorough understanding of the best ways to work across the business, the firm is well-placed to develop its own time-saving software for the benefit of clients. 

In collaboration with Shoosmiths, our legal management solution Matters+ aims to track, analyse and manage lawyer workloads. Designed by lawyers for lawyers, Matters+ is a cloud-based software application that enhances productivity, collaboration and accessibility to matter-related data.  Recognised at both the 2019 British Legal Technology Awards and Legal Week Innovation Awards, it’s increasingly popular with general counsel. 

It’s an example of how lawyers are applying a deep understanding of legal processes to devise powerful tech driven solutions for the benefit of clients.
Indeed, with blockchain having the potential to change the way lawyers manage transactions, funds and complete contracts more securely, it’s only a matter of time before these technologies are considered essential. 

Whilst I suspect there are many still resistant to change, at Shoosmiths we consider it imperative to be agile and open to change. Adopting technology-based solutions will both help our clients to save time and money and free up valuable time for colleagues to focus on more challenging tasks.  

We operate in an ever-changing financial and legal landscape and in my opinion legal firms and financial services firms alike must firmly embrace the technologies available. 

However, though law firms may need to steadily adapt to work more closely with those utilising fintech products such as crowdfunding or fundraising apps, let’s not simply conclude that lawyers in the corporate and commercial space will be replaced entirely by robots.   

For I believe there will remain a need for skilled corporate lawyers to lead more complex and larger transactions, where the intrinsic value of having a trusted advisor at the helm of a deal beats the efficiency of a coded equivalent.