Fintech 2017 Edinburgh (Day 2)

Welcome To
Fintech 2017
27th & 28th Sept
Our Dynamic Earth

Mark Stephen
BBC Scotland
@bbcscotland
#finscot

Mark Bailie
Royal Bank of Scotland
@RBS
#finscot

Capitalising on the
Fourth Industrial Revolution
Mark Bailie, Chief Operating Officer,
Royal Bank of Scotland Group, plc
28 September 2017

Information classification: External5

Information classification: Internal6

Information classification: Internal7

Impact
Time
Impact of Technology over time

The shuttering of US retail space
Retail store closing by square footage (millions)

Information classification: External
What do people really want?
Hint: It’s not a mortgage.

Thank you

Kent Mackenzie
Deloitte
@DeloitteScot
#finscot

Seizing the Opportunity: Scotland’s National Fintech Strategy
Kent Mackenzie – Director - Deloitte
Fintech 2017 – Dynamic Earth, Edinburgh – Thursday 28th September 2017

15
The global context
Around the world many places are emerging and maturing as centres of excellence for Fintech

16
Bringing all of these strengths together
places Scotland in a unique position to
capitalise on the Fintech opportunity
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
Structuring a clear strategy to drive growth
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
Overcoming our main challenges
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
We are making progress…and now in a position to accelerate growth
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
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
How can the assembled delegates get involved and lend their weight to support the wider national effort
Next Steps: Collaboration and Action

Strategy & Leadership Panel
Sharon Hamilton – SE @scotent
Mark Bailie – RBS @rbs
Phil Grady – Castlight @philipjgrady
Mike Allan – Lending Crowd @_lendingcrowd
Kent Mackenzie - Deloitte @deloittescot

Funding & Support Panel
Louise Smith – RBS @rbs
Paul Atkinson– Par Equity @parequitypaul
Jude Cook– ShareIn @judecook
Hugh Edmiston– Uni of Edinburgh
@uniofedinburgh

Regulation Panel
Callum Sinclair – Burness Paull @burnesspaullLLP
Rory Bailey– Money Dashboard @MoneyDashboard
Maureen Falconer– ICO @ICOnews
Sameer Gulati – Innovate Finance @SameerG1987

Fintech 2017, Edinburgh
28 September 2017
The Future is Human
Becoming a
Living Business
Abbie Walsh
Louise Smith

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

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

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

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

We believe the
merging of these
two worlds can
result in a
Living Business

But, what does it mean to be a
Living Business?

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.

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

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

Personality
Craft
Instinct
The Vital Signs compass
02 Living Business

Personality
Craft
Instinct
Show
Power
Tell
Behave
02 Living Business

Craft
Instinct
Show
Power
Tell
Behave
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.

Power Behave
Personality
Instinct
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

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

Show Tell
Craft
Personality
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.

Relationships between different organisations
can fill the gaps to Living Business
Constellation

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

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
03 Constellations
Personality
Craft
Instinct
Show
Power
Tell
Behave

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?
ability to pivot in a customer
centric way?
Show
Power
Tell
03 Constellations
Personality
Craft
Instinct
Show
Power
Tell
Behave

Is your personality in line
with what you show and
tell?
centric way?
Do your employees feel empowered
and enabled to embody your
personality with customers?
Show
Power
Tell
Behave
03 Constellations
Personality
Craft
Instinct
Show
Power
Tell
Behave

Personality
Craft
Instinct
Show
Power
Tell
Behave
03 Constellations
Is your personality in
line with what you
show and tell?
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

Personality
Craft
Instinct
Show
Power
Tell
Behave
As a FinTech
03 Constellations

Personality
Craft
Instinct
Show
Power
Tell
Behave
As a FinTech
03 Constellations
Do you open up your
Relationships

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
Relationships

Personality
Craft
Instinct
Show
Power
Tell
Behave
As a FinTech
03 Constellations
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
Relationships

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?
base grows?
Show
Power Behave
Do you open up your
Relationships

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?
base grows?
Show
Power
Tell
Behave
Do you open up your
Relationships

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

‘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

Christian Trumm
Fintech Hub Advisor
@ChristianTrumm
#finscot

Dan Posner
Barclays
@barclays
#finscot

The Future is Open &
Collaborative
Dan Posner, Head of Business Propositions

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

Where’s the value? Is everyone a winner?
Scale
Association
with trusted
brand
Pace Innovation
Fintechs
Banks

Bringing a collaborative
proposition to market

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

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

Kevin McCallum
Free Agent
@Kevinjmccallum
#finscot

Chief Commercial Oﬀicer
Building for
the Future:
Scaling a Fintech
in Scotland
Kev
in

6£01,70520m0+
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pcclloueayssretasoeiNsmsePedSrs

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

Mindset: Focus,competition &diﬀerentiation

A startup is a temporary
organisation designed tosearch
for a repeatable and scalable
business model.

“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

•Be ready toreact
•Patience is (truly) avirtue
•Start drawing anorg-chart
•Be ready to play&prep for scale
•Data and paceare levellers

Scotland vs the rest of the world

Source: Department for Business, Energy & Industrial Strategy, Oct 2016

What’s next: Opportunities fromdigitisation,
regulation &compliance

Fintech 2018
26th & 27th September

Fintech 2017 Edinburgh (Day 2)

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Fintech 2017 Edinburgh (Day 2)