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The financial services sector in Scotland could lose 14,000 jobs and £635m in wages if organisations do not speed up the adoption of the latest financial services technology, according to the Strathclyde Business School.
But things could be very different if finance firms in Scotland accelerate the adoption of financial technology (fintech), with the potential for an extra 15,000 jobs over the next decade, said the school’s academics.
Daniel Broby, director of the university’s centre for financial regulation and innovation, said fintech is evolving fast and its consequences will have transformational impacts on the banking and securities organisations.
“Financial transactions are set to become instantaneous, traditional paper money is being replaced by digital money, and entrepreneurs will be able to raise money directly from the public,” he added.
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Broby said that while this is good news for consumers Scotland’s finance sector must create the right conditions to enable companies to develop fintech faster if it wants to remain globally competitive.
“The technology exists. Either Scottish financial institutions adopt it and thrive, or they ignore it at their peril,” he added.
According to Broby, Scottish bank and fund management operations are already using fintech, but it is largely developed in-house and as such is not cutting-edge. “The gradual trend has been for traditional banks to move to off-the-shelf solutions and to leave the in-house developed legacy systems,” he said.
“We argue that this should be accelerated. There’s potentially a huge opportunity for Scotland, but we need to seize it.”
According to a study by EY, high-income young people are the biggest group of early adopters of fintech products and services.
The study, of more than 10,000 digitally active consumers in Australia, Canada, Hong Kong, Singapore, the UK and the US, revealed that about 3,000 had used fintech.