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Fintech 2017 Edinburgh (Day 2)

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This Summit explored technological innovation across the financial services sector, from developments in established tier-1 firms to the disruptive innovators within the start-up community that are reshaping the FS market. The summit was geared for senior technologists, business leaders, innovators and investors, and will bring these key stakeholders together for knowledge exchange, discussion and cross-pollination.

Core conference topics included:

• Landscape: Social, Geo-political & Financial
• Regulation: GDPR, PSD2, Open Banking & APIs
• Customer Strategy: UX, Data Insight, Marketing & ML
• Emerging Tech: Blockchain, Analytics, AI & Payments
• National Strategy: Skills, Funding, Collaboration & Cyber Security
• Infrastructure: IT, Digital, Cloud & Mobile

Published in: Technology

Fintech 2017 Edinburgh (Day 2)

  1. 1. Welcome To Fintech 2017 27th & 28th Sept Our Dynamic Earth
  2. 2. Mark Stephen BBC Scotland @bbcscotland #finscot
  3. 3. Mark Bailie Royal Bank of Scotland @RBS #finscot
  4. 4. Capitalising on the Fourth Industrial Revolution Mark Bailie, Chief Operating Officer, Royal Bank of Scotland Group, plc 28 September 2017
  5. 5. Information classification: External5
  6. 6. Information classification: Internal6
  7. 7. Information classification: Internal7
  8. 8. Information classification: External8 Impact Time Impact of Technology over time
  9. 9. Information classification: External9 The shuttering of US retail space Retail store closing by square footage (millions)
  10. 10. Information classification: External10
  11. 11. Information classification: External What do people really want? Hint: It’s not a mortgage.
  12. 12. Thank you Information classification: External12
  13. 13. Kent Mackenzie Deloitte @DeloitteScot #finscot
  14. 14. Seizing the Opportunity: Scotland’s National Fintech Strategy Kent Mackenzie – Director - Deloitte Fintech 2017 – Dynamic Earth, Edinburgh – Thursday 28th September 2017
  15. 15. 15 Seizing the Opportunity: Scotland’s National Fintech Strategy The global context Around the world many places are emerging and maturing as centres of excellence for Fintech
  16. 16. 16 Bringing all of these strengths together places Scotland in a unique position to capitalise on the Fintech opportunity Seizing the Opportunity: Scotland’s National Fintech Strategy The national opportunity – Scotland can emerge too… It is crucial to utilise Scotland’s core strengths: 1 Figures coming from Universities Scotland – who work on behalf of the Principals and directors of all 19 high education institutions in Scotland. 2 Figure from Scottish Development International: https://www.sdi.co.uk/invest/sectors/financial-services Academic Output Scotland has 19 world class higher education institutions, with Scotland having more world-class universities than any other country in the world by head of population1. Financial Services Expertise Scotland has strong expertise in Financial Services with over 86,000 people working in the sector with the same again indirectly employed in sectors including banking, fund management, insurance, pensions and professional services2. Reputation in Innovation & Engineering Scotland has traditionally been a global leader in innovation & engineering ranging from traditional ship-building to civil engineering to home-grown start-ups such as SkyScanner and FanDuel. Quality of Life Benefits include a strong quality of life in Scotland, a low cost of living for individuals and businesses with quick access to the countryside and Highlands Close Geographic Footprint Close Geographic footprint between the 2 largest cities in Scotland – Glasgow and Edinburgh as well as close proximity to London and Europe with access to a rich, diverse customer base.
  17. 17. 17 Structuring a clear strategy to drive growth Seizing the Opportunity: Scotland’s National Fintech Strategy Vision: To become a global leader in Fintech innovation and development. Mission: To create an integrated Fintech ecosystem in Scotland through provision of funding, support, infrastructure and talent that recognises and responds to the needs of each stakeholder, and connects Scotland to other global Fintech centres. Fintech Scotland Profile Raise international awareness of the Scottish Fintech industry by championing Scotland’s differentiators as a Fintech hub Raise awareness of Fintech as an opportunity for business creation and growth Raise awareness of Fintech as an excellent career opportunity Lead: John McGuigan Standard Life Infrastructure & Innovation Promote collaborative innovation across the Fintech ecosystem Development and implementation of a physical hub Lead: Kent Mackenzie Deloitte Talent Attraction of high value, skilled workers into Fintech and from abroad Promotion of technology as a career throughout the system Retention of existing Financial Services talent via ongoing training Lead: Colin Halpin HSBC Finance & Support Improve availability of equity funding to Scottish based Fintech firms Finance readiness and business support to Fintech firms Lead: Oliver Henderson EY Create and execute a marketing strategy that is impactful and resonant. Stage a series of events and build our reputation within the sector Creating a strong brand with clear differentiated messaging Stage a series of events to support connection and develop use-cases Create a network of integrators / facilitators Development and launch of a virtual hub and potential creation of a physical space to help Fintech thrive Development and launch of a virtual & physical fintech hub Define and categorise skillset requirements in Fintech Create and launch degrees and higher education courses in Fintech Driving Financial Services, Fintech, & digital awareness and skills at primary/secondary school level Awareness of visa programmes in place for foreign graduates Encourage FCA surgery sessions in Scotland to help aspiring Fintechs Create & publish a Fintech support services guide Clarity in the funding and supporting options available to Fintechs at each stage of their journey. Advisory firm secondments to global hubs and venture capitalists
  18. 18. 18 Overcoming our main challenges Seizing the Opportunity: Scotland’s National Fintech Strategy Challenges to overcome How these are being addressed? Leadership & Voice We need to empower a leader and team to drive forward our ambitions. We need to be louder, and champion Scotland’s potential as a fintech centre of excellence. ✓ The forthcoming appointment of a CEO and management teams for Fintech Scotland will make sure our voice is loud and clear. ✓ The work SFE Fintech Steering Committee to champion Fintech is making a big difference. Making Connection We have all the attributes to be successful, our challenge to date has been making the right connections, and making them easy to navigate. ✓ The creation of an online hub is aiding connection at the most primary level. ✓ Events across the country are helping bring like-minded people together. Nurturing Skills Our focus has to be on encouraging, developing, and retaining skills that can be at the centre of fintech development going forward. ✓ There are more courses than ever being run by leading Universities such Edinburgh, Strathclyde, and Dundee. ✓ The work of the DataLab, CodeClan, and others is making a huge difference. Channelling Investment Understanding where funding and support can come from, without having to travel… ✓ FCA surgeries and support from Innovate Fintech is making a big difference. ✓ Clarity on funding structures and options is a great first step.
  19. 19. 19 We are making progress…and now in a position to accelerate growth Seizing the Opportunity: Scotland’s National Fintech Strategy Fintech Scotland Business Plan • In June, on behalf of the eco-system Deloitte developed a business plan that outlines how Fintech Scotland can combine a set of activities designed to accelerate Fintech in Scotland. Fintech Scotland Online Platform • A key first step to accelerate our ambition was in the creation of an online platform and community to link each part of the eco-system. A first version of the Fintech Scotland website has now been launched www.FintechScotland.com • This website will act is the first stage in the development of a virtual platform for the Fintech ecosystem. It contains: • The latest Fintech news in Scotland • Blog posts & articles from Fintech SMEs • Areas to showcase Scotland’s major cities: Edinburgh, Glasgow & Stirling with plans to expand out further • Register of Fintech companies working in Scotland • Register of Investors working in Scotland • The ability to sign up to the Fintech Scotland newsletter Fintech Scotland Business Plan This constitutes a detailed business plan for Fintech Scotland, and whilst is represents a ‘point-in-time’ analysis, the components, their structure, and the appetite to progress the initiative have been qualified with members of the ecosystem as part of this work. The ambition and hallmarks of the business plan Establishing Fintech Scotland as an entity This outlined 5 primary elements required to establish Fintech Scotland as the recognised entity to drive the development of the Fintech industry in Scotland. The creation of Fintech Scotland is currently ongoing with the appointment of a CEO in train. Fintech Scotland Action Plan This pack set out the steps required to accelerate activity and deliver against the aspirations for Fintech Scotland. It established a number of fundamental points to make this happen. Much of this activity is underway. Coming…this Autumn Recognising the need to structure and formulate plans and activities…for the long-term…. Building an online home for Fintech Scotland and a portal for those looking in.. Time to accelerate our plan and deliver against the potential… ✓ Creation on Fintech Scotland and appointment of leadership team. ✓ Growth in ‘connector network’ through online platform and forthcoming events. ✓ Creation of a Fintech Scotland investment fund ✓ Exploration into the opportunity to create a physical hub for Fintech in Edinburgh. ✓ A growing and developing eco- system. ✓ Refinement and execution of the Fintech Scotland business plan. ✓ An opportunity to move up the chart. in the Global Fintech Hub report!
  20. 20. 20 Seizing the Opportunity: Scotland’s National Fintech Strategy We are making an impact - Global Fintech Hubs Federation Report – Interim Review 2017 In April 2017, Scotland featured on the Fintech Global Hub Report for the first time: Scotland London “There are not many other cities that have an ‘eco-system concentration’ like Edinburgh!” “Edinburgh has all the component parts to enable a thriving FinTech eco-system”
  21. 21. 21 How can the assembled delegates get involved and lend their weight to support the wider national effort Next Steps: Collaboration and Action Seizing the Opportunity: Scotland’s National Fintech Strategy
  22. 22. Strategy & Leadership Panel Sharon Hamilton – SE @scotent Mark Bailie – RBS @rbs Phil Grady – Castlight @philipjgrady Mike Allan – Lending Crowd @_lendingcrowd Kent Mackenzie - Deloitte @deloittescot
  23. 23. Welcome To Fintech 2017 27th & 28th Sept Our Dynamic Earth
  24. 24. Funding & Support Panel Louise Smith – RBS @rbs Paul Atkinson– Par Equity @parequitypaul Jude Cook– ShareIn @judecook Hugh Edmiston– Uni of Edinburgh @uniofedinburgh
  25. 25. Regulation Panel Callum Sinclair – Burness Paull @burnesspaullLLP Rory Bailey– Money Dashboard @MoneyDashboard Maureen Falconer– ICO @ICOnews Sameer Gulati – Innovate Finance @SameerG1987
  26. 26. Lunch & Networking
  27. 27. Fintech 2017, Edinburgh 28 September 2017 The Future is Human Becoming a Living Business Abbie Walsh Louise Smith
  28. 28. What we’ll talk about in this session A reflection on the challenges faced by both FinTechs and established financial services players in a world of constant change A perspective on what we call Living Business and the Vital Signs that can help guide you towards becoming one How disruptors and the disrupted can collaborate in the pursuit of becoming Living Businesses 01 0 02 03
  29. 29. What are some key Challenges?
  30. 30. Many organisations are in the middle of digital transformation, but... Deteriorating employee engagement is presenting a huge challenge Actively disengaged employees cost the USA $450-550bn per year Employees aren’t just unhappy; they actively spread their discontent among their colleagues 70% of digital transformation done by 2020 will fail Source: McLean & Company survey conducted in 2013, Markets and Markets, plus McKinsey analysis. 01 Challenges
  31. 31. Traditional Players Everything is going digital Liquid expectations Employee engagement Businesses across the financial industry are facing some big challenges FinTechs Scaling a service Building and mentoring diverse teams Dealing with regulation 01 Challenges
  32. 32. FinTechs are great at this ‘Traditional’ players have experience in this Traditional Players Everything is going digital Liquid expectations Employee engagement We have the right people in this room to solve these challenges FinTechs Scaling a service Building and mentoring diverse teams Dealing with regulation 01 Challenges
  33. 33. We believe the merging of these two worlds can result in a Living Business
  34. 34. But, what does it mean to be a Living Business?
  35. 35. 02 Living Business Becoming a Living Business 02. A Living Business has an engaged workforce who are driven by a shared purpose and vision. 03. Employees have the freedom to operate autonomously, responding to the environment in the pursuit of innovation. 04. A Living Business has the power and agility to evolve intelligently whenever change arises in the world around it. 01. To be ‘living’ means constantly learning and changing in real time. A Living Business has human characteristics – it’s responsive, emotive and ambitious.
  36. 36. 02 Living Business Instinct. Empowering colleagues to operate and make decisions autonomously to increase the speed of change and innovation. Craft. The essence of what your business does, and what each person within the business contributes. It’s about the combination of skills that make its offering unique. Relationships. The strength of the relationships within your business’s ecosystem; including each colleague, customer, supplier and wider society. Personality. The behaviours, beliefs and values that shape the experience of interacting with your company. The extent to which a business is ‘Living’ can be measured by assessing four Vital Signs
  37. 37. Focus on EQ for people- centric leadership Top talent minus the brilliant jerks Entrepreneurs In Residence (EIR) Successful businesses exhibit acute awareness of these Vital Signs, inside and out Leading with empathy FedEx created a six-month Emotional Intelligence (EQ) training for new managers to bolster their people-first leadership in a business geared to deliver pace. Additionally they also certified some employees as EQ trainers to improve peer learning and make the competencies go deep into FedEx. For Netflix to hire you, your skills need to be top-notch, but you also need to be a grown adult. Having a clear purpose, values and talent strategy, they can give employees a lot of autonomy and responsibility to act. Their people are encouraged to think like business people and innovators first and HR last. The EIR is a symbiotic value exchange between the enterprise and early stage businesses. By enabling start ups to work with their business units, Cisco softens its boundaries and forms strategic partnerships and stays with the zeitgeist. Microsoft’s CEO Satya Nadella has dramatically revived Microsoft’s reputation by emphasising collaboration and a ‘learn it all’ culture. The results have been a more than $250bn market value gains over the past 4 years. 02 Living Business
  38. 38. Personality Craft Instinct The Vital Signs compass 02 Living Business
  39. 39. Personality Craft Instinct Show Power Tell Behave The Vital Signs compass 02 Living Business
  40. 40. Craft Instinct Show Power Tell Behave The Vital Signs compass 02 Living Business Personality Personality, which is the very purpose and core of the organisation, should manifest consistently and authentically throughout all areas of the business.
  41. 41. Power Behave Personality Instinct The Vital Signs compass 02 Living Business The digital and physical experiences that manifest the brand purpose through everything the business does. Marketing, branding and advertising strategies and campaigns that take the brand purpose to the world. Show Tell Craft
  42. 42. Show Tell Craft Personality 02 Living Business Platforms, infrastructure and capabilities required to implement, power and maintain the desired target experience, purpose and expectations. Cultural, operational and process transformation that manifests the brand purpose through every colleague and every internal interaction. Power Behave Instinct The Vital Signs compass
  43. 43. Show Tell Craft Personality The Vital Signs compass 02 Living Business Power Behave Instinct Relationships play an essential role because most organisations, established or otherwise will struggle to keep up with the pace of change alone.
  44. 44. Relationships between different organisations can fill the gaps to Living Business Constellation
  45. 45. Have you embraced new ways of working that allow you to quickly get products and services to market and test them with customers and employees? Show As a Financial Services company 03 Constellations Personality Craft Instinct Show Power Tell Behave
  46. 46. How are you continually innovating and improving your products and services in order to better manifest your personality? Are you using tools and processes that enable the breakdown of silos and the ability to rapidly pivot in a customer centric way? Show Power As a Financial Services company 03 Constellations Personality Craft Instinct Show Power Tell Behave
  47. 47. How are you continually innovating and improving your products and services in order to better manifest your personality? Is your personality in line with what you show and tell? Are you using tools and processes that enable the breakdown of silos and the ability to pivot in a customer centric way? Show Power Tell As a Financial Services company 03 Constellations Personality Craft Instinct Show Power Tell Behave
  48. 48. Have you embraced new ways of working that allow you to quickly get products and services to market and test them with customers and employees? Is your personality in line with what you show and tell? Are you using tools and processes that enable the breakdown of silos and the ability to pivot in a customer centric way? Do your employees feel empowered and enabled to embody your personality with customers? Show Power Tell Behave As a Financial Services company 03 Constellations Personality Craft Instinct Show Power Tell Behave
  49. 49. Personality Craft Instinct Show Power Tell Behave As a Financial Services company 03 Constellations Have you embraced new ways of working that allow you to quickly get products and services to market and test them with customers and employees? Is your personality in line with what you show and tell? Are you using tools and processes that enable the breakdown of silos and the ability to pivot in a customer centric way? Do your employees feel empowered and enabled to embody your personality with customers? Show Power Tell Behave Do you open up your organisation to APIs – both technological and cultural? Relationships
  50. 50. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations
  51. 51. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations Do you open up your organisation to APIs – both technological and cultural? Relationships
  52. 52. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations Are you able to scale your purpose as you grow? Have you built platforms for your products and services that maintain their openness and flexibility as your customer base grows? Power Do you open up your organisation to APIs – both technological and cultural? Relationships
  53. 53. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations Are you able to scale your purpose as you grow? Have you built platforms for your products and services that maintain their openness and flexibility as your customer base grows? Are you able to scale up your purpose into more established structures around behaviour, values and career progression? Power Behave Do you open up your organisation to APIs – both technological and cultural? Relationships
  54. 54. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations Do you invest in your craft – are your employees empowered to learn and hone their skills? Are you able to scale your purpose as you grow? Have you built platforms for your products and services that maintain their openness and flexibility as your customer base grows? Are you able to scale up your purpose into more established structures around behaviour, values and career progression? Show Power Behave Do you open up your organisation to APIs – both technological and cultural? Relationships
  55. 55. Personality Craft Instinct Show Power Tell Behave As a FinTech 03 Constellations Do you invest in your craft – are your employees empowered to learn and hone their skills? How do you maintain your authentic voice as you’re trying to acquire new customers? Are you able to scale your purpose as you grow? Have you built platforms for your products and services that maintain their openness and flexibility as your customer base grows? Are you able to scale up your purpose into more established structures around behaviour, values and career progression? Show Power Tell Behave Do you open up your organisation to APIs – both technological and cultural? Relationships
  56. 56. Personality Craft Instinct Show Power Tell Behave Areas for Intervention 03 Constellation Design thinking Digital innovation Store experience Branding Content strategy Image & awareness Operational structure Objectives & KPIs Platforms Cultural values Talent Space design Show Power Tell Behave
  57. 57. ‘Traditional’ players have experience in this Traditional Players Find the partners for change Rediscover your personality Empower your workforce FinTechs Find the partners to scale Scale and stay true to personality Invest in your people We have the right people in this room to solve these challenges
  58. 58. Thank You
  59. 59. Christian Trumm Fintech Hub Advisor @ChristianTrumm #finscot
  60. 60. Dan Posner Barclays @barclays #finscot
  61. 61. The Future is Open & Collaborative Dan Posner, Head of Business Propositions
  62. 62. Transitioning to collaboration – a mind-set shift Client journeys that don’t start on the bank’s real estate Developers as a customer group Can’t build everything within the bank Choosing (and not choosing) partners
  63. 63. Where’s the value? Is everyone a winner? Scale Association with trusted brand Pace Innovation Fintechs Banks
  64. 64. Bringing a collaborative proposition to market
  65. 65. SmartBusiness Dashboard & apps: Working with a young fintech, Barclays have created… ✓ Platform: an API platform at the heart of our online banking experience ✓ Data: puts bank data and data from 3rd parties side by side in one place ✓ Capability: good testing ground to build and run APIs ahead of the regulation ✓ Richer customer experience: beyond transactional banking to give customers a view of their wider business performance SME Case Study – increasing customer insight
  66. 66. It’s not all about the tech Target Operating Model is key 04 Challenges and opportunities of collaboration Strong Management Choose to collaborate with companies that have a strong team 01 Nurture & guide the relationship Support the team as they work with large enterprise 02 Protect your reputation Mitigate reputational risk 03 It’s a journey Bring your people with you 05
  67. 67. Kevin McCallum Free Agent @Kevinjmccallum #finscot
  68. 68. Chief Commercial Officer Building for the Future: Scaling a Fintech in Scotland Kev in
  69. 69. Launch, Traction &Scale
  70. 70. 6£01,70520m0+ pwaofyiernimnladgn- pcclloueayssretasoeiNsmsePedSrs
  71. 71. FreeAgent Internal £0 £2,000,000 £4,000,000 £6,000,000 £8,000,000 £10,000,000 0 30 60 90 120 150 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Year Ending Mar31st Team Size Annualised Revenue
  72. 72. Mindset: Focus,competition &differentiation
  73. 73. A startup is a temporary organisation designed tosearch for a repeatable and scalable business model.
  74. 74. Be apainkiller, not avitamin
  75. 75. Build aMoat
  76. 76. “The most important thingto me is figuring out how big a moat there is around the business. What I love, of course, is a big castle and a big moat with piranhas and crocodiles.” Warren E. Buffett
  77. 77. The flywheeleffect
  78. 78. Working with largeFIs
  79. 79. Finding balance
  80. 80. •Be ready toreact •Patience is (truly) avirtue •Start drawing anorg-chart •Be ready to play&prep for scale •Data and paceare levellers
  81. 81. Scotland vs the rest of the world
  82. 82. Source: Department for Business, Energy & Industrial Strategy, Oct 2016
  83. 83. What’s next: Opportunities fromdigitisation, regulation &compliance
  84. 84. OB/PSD2 GDPR MTD
  85. 85. Thank you
  86. 86. Chief Commercial Officer Building for the Future: Scaling a Fintech in Scotland Kev in
  87. 87. Questions & Discussion
  88. 88. Fintech 2018 26th & 27th September

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