Scotland is taking a leading role in showcasing how the fintech sector is thriving across the UK, contributing around £568m in Gross Value Added (in real terms) to the economy, and open banking has played its part in that growth.

Edinburgh is the largest fintech hub in the UK outside of London. Employing thousands of people, the sector has seen over 200 fintech businesses – including 37 international firms – choosing to make it their home.

This is just one of the reasons why Open Banking Limited (OBL) has chosen to host its latest regional roundtable in the city. During the Edinburgh Fintech Summit on 24 and 25 September, we highlighted the opportunities that open banking can continue to deliver in Scotland, in partnership with Fintech Scotland.

Open banking has transformed the UK’s payments and data landscape, offering a new, secure way to pay for goods and services, such as bills and taxes. It also enables consumers and small businesses to securely share their current account information with third party providers, allowing access to tailored products and services, such as budgeting and savings apps.

It has also supported financial inclusion, using that data to expand access to affordable credit to underserved consumers.

For example, the Edinburgh-based  Smart Data Foundry – an independent research organisation which unlocks financial data to help tackle economic inequality – worked with East Renfrewshire Council to create a cost-of-living dashboard.

Using banking data from the NatWest Group, this dashboard integrated financial well-being indicators, such as income and essential expenditure, to aid the council in identifying challenges residents face in managing their day-to-day finances.

The result? The dashboard helped the council target financial support for people in the area.

The organisation has also collaborated with the Joseph Rowntree Foundation on an income volatility dashboard for consumers across the UK.

Open banking’s data sharing principles can be expanded to other key economic sectors – such as energy, telecoms and transport – to deliver similar cost savings, and simpler supplier switching, for consumers and businesses.

The powers to create a smart data economy are provided for in the new Digital Information and Smart Data Bill, which we look forward to moving through the current Parliamentary session at pace. This will also allow for further innovation by fintech firms, particularly in Scotland’s flourishing environment, and can potentially unlock an estimated £215 billion in additional GDP for the UK over the next five years.

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In recognition of these opportunities, TSB Bank’s Innovation Labs, in partnership with Fintech Scotland, recently ran a pitch to develop partnerships with fintechs to develop new open banking-enabled propositions that can benefit consumers and businesses. Suggestions include improving credit-related decision-making, building insights into financial behaviour, and tackling late payments.

As we focus on the expansion of open banking and smart data, it is essential that we shine a light on the brilliant work being done across Scotland, and what it can continue to offer.