David Horne takes a look at how fintech, the application of technology to the financial industry, is addressing crime and corruption.

Scotland has long been home to some of the world’s most influential and recognisable financial institutions. Our financial services sector supports thousands of jobs and businesses across the country and has a significant impact on the global economy.

The tradition holds strong to this day, and if you’ve been anywhere near a business event in Edinburgh recently, you’ll have heard someone talk about fintech. It’s among the favourite subjects of government, public bodies, accelerators and corporates – and of course, a veritable army of hungry, nimble tech firms. We were recently very proud to become an ally of global banking group Citi, to launch its Tech4integrity challenge in Edinburgh – a testament to the thriving fintech sector in Scotland.

Looking to further galvanise the country’s top innovators, the initiative invites the tech sector to come forward with solutions to eight “pain points” around corruption and financial crime. So what do we need to see our burgeoning fintech sector prioritise if we are to remain a global player and how should our army of homegrown start-ups work together if they are to become the future of global fintech?

Collaboration is part of the common language of entrepreneurs, and it has a key role to play between start-ups and the established financial services players. While large corporates benefit from the resource, heft, market access and network of international banking and finance businesses, SMES are highly agile, focused and tech-savvy. Collaboration between the two means both parties can overcome challenges they might otherwise face alone.

And the incumbents are starting to mobilise. Deutsche Bank has committed $1bn to supporting fintech, and with Entrepreneurial Spark’s new fintech hub at Royal Bank of Scotland’s Gogarburn site, there’s a clear direction of travel for the big financial players who will be crucial in supporting the growing companies with innovative tech. That picture is true across the world, driven partly by companies like Vodafone, Amazon and Alibaba moving into payments and lending. Successful fintech is based on listening to a customer’s requirements and developing products in tandem with those needs. Customer first, product second.

We’ve reached a stage in society when people have services for all their basic needs; the key to continued growth is creating fintech which makes an existing service better for the customer, whether that’s the front-end experience or an improvement in online security.

We must also have the confidence in tech as a key element of how we address some of the toughest questions around financial services integrity. That means we have to be resilient and think long-term. We can’t expect everything to work on the first go, either at the level of individual businesses or across the fintech sector – as any entrepreneur will tell you, failure is just part of the job. It’s how you respond that matters, and we have to be in this for the long haul; decades, even. We’re now in a faster-moving world and things will fail – the trick is to create an environment where other ideas and products can be created as a result. The success stories of the 21st century were not created overnight.

For some, there’s a mindset shift required. There’s no shortage of energy and passion from the SME fintech community, and it’s not afraid to take risks and try new things. Evidence from large financial institutions of the same ‘esprit de corps’ and willingness to take the odd leap of faith would be welcomed by the smaller companies.

The Tech For Integrity challenge is a fascinating way to look at a whole series of problems for global financial services, and brings out the best spirit of entrepreneurship, bold thinking and rapid, focused innovation. For Scotland, it’s an opportunity to demonstrate that we have the ideas, imagination and talent to push our financial services sector to the front of the global stage.