The Scottish financial sector has always punched above its weight, confident in its status as the largest UK financial centre outside London. It not only contributes billions of pounds to the UK’s GDP, but is recognised the world over for its innovation and forward thinking – successfully picking up the baton passed by innovators from years gone by.
Add to that the country’s current ambition to become a globally recognised top five fintech hub – nurturing start-ups, scaling up SMEs, encouraging growth, and attracting global firms – and it’s easy to see why the Scottish fintech ecosystem is outperforming its rivals.
Scotland’s credentials as a leading fintech location were further reinforced recently with the news that the Edinburgh-based fintech giant FNZ has reached Unicorn status.
While it would be a stretch to claim FNZ as a truly home-grown Scottish company, a lot of the business’s rapid growth has occurred on Scottish soil. The company was founded by chief executive Adrian Durham in New Zealand, before they quickly expanded to Scotland in 2005. Many of the original FNZ team were from Scotland and importantly remain working for the company today, from its Tanfield base in Edinburgh, where they employ over 350 of its 1,500 members of staff.
FNZ has thrived during its time in Scotland, thanks at least in part to the combination of talent, customers and infrastructure needed to succeed.
The company now holds £330bn in assets under administration from around five million customers globally, serving some of the world’s largest financial institutions, including Standard Life Aberdeen, Santander, Lloyds Bank, Vanguard, Generali, and Barclays.
Its success caught the attention of Al Gore’s Generation Investment Management LLP, and Canadian pension fund Caisse de Depot et Placement du Quebec, which combined to acquire the stakes previously owned by General Atlantic and H.I.G. Capital – in what was 2018’s largest fintech deal – valuing the company at £1.65bn a mere 15 years after it was founded.
The deal, if we accept that foreign direct investment is a good measure of attractability for any economy, is one of the best examples of what can be achieved in Scotland.
FNZ’s business is built on the desire to help people achieve their financial goals by developing excellent technology solutions that simplify the end-user experience and ultimately direct more of their hard-earned money into assets by bringing down the cost of managing those assets.
Adrian Durham, chief executive and founder of FNZ said: “The question we asked when launching FNZ was how can technology solve the problems faced by consumers of long-term savings products? We knew then, and it’s still true today, that technology is the key to unlocking many of the solutions to the problems typically faced by customers. It was important therefore for us to expand our business into a destination that was technologically advanced and would support our ambitions. We certainly found that in Scotland.”
“FNZ is a growth business and I’m pleased to say that we have continued to grow apace, benefiting from the investment being made in our own technology and processes, our increasing scale, and the effort and dedication of our highly-skilled people.”
FNZ employs nearly 500 people in the UK, the majority of them in Edinburgh. The company’s dedicated research and development division invests heavily in its core technology platform and processes, including digital advice, blockchain, predictive analytics and end-to-end process automation.
Stephen Ingledew, chief executive of FinTech Scotland, said: “FNZ is a global leader in blending new technologies with financial services to improve customer engagement with long term savings and investments and it is a shining example of how innovative enterprises can grow and expand on the international stage form Scotland.”
“I’ve known Adrian and FNZ team since their early formative days of arriving in Scotland and it has been inspiring to see first-hand their exponential growth with a focus on people skills development to support the delivery of world class customer outcomes through new technologies. The impact of FNZ on the UK and global savings and investment market has been seismic for both the financial services industry and many consumers and we are delighted FNZ are part of the Scottish ecosystem which is having such a significant international impact.”
Graeme Jones, chief executive of Scottish Financial Enterprise, said: “FNZ is a fabulous success story for Scotland. Reaching Unicorn status is a remarkable achievement and testament to what can be accomplished within our thriving financial services industry. The company is a leader in innovation, a major player within financial services and a sizable employer, all of which is evidence of Scotland maintaining its gold standard legacy within our industry.”
“I am delighted FNZ has joined SFE, further enhancing our membership. I am looking forward to working with Adrian and his team at FNZ as we continue to promote the strength of Scotland’s financial services industry in Scotland, across the UK and worldwide.”