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What is FNZ? The digital finance unicorn in Scotland’s thriving fintech hub

It is the first $1bn unicorn to emerge from the blossoming Scottish fintech scene, and Andrew Fawthrop takes a closer look at what has driven FNZ's success

Having recently hit the dizzying heights of unicorn status, the story of FNZ has become a benchmark for many of the growing number of fintechs now calling Scotland their home.

The wealth management technology firm this week announced a funding deal that valued the company at around £1.65bn, and attracted investment from Al Gore’s Generation Investment Management and Canadian pension fund Caisse de Depot et Placement du Quebec.

Over the 15 years since it was founded, FNZ has developed a range of digital services for its partners in the financial services industry, which have fuelled its growth and now earned it billion-dollar unicorn credentials.

Its ethos is to use technology to lower costs and complexity, enhance customer engagement and deliver personalised investment solutions for its clients.

Here we take a closer look at FNZ and its journey to becoming Scotland’s first fintech unicorn.

 

What is FNZ?

Founded in New Zealand in 2003 by CEO Adrian Durham, FNZ expanded its operations to Scotland in 2005, and now has a global footprint with offices in London, Sydney, Wellington, Hong Kong and Shanghai among other regions.

Its technology services are used by more than 60 global financial institutions working in wealth management, like banks, insurers and asset managers, as they look to modernise and digitise their IT systems and offer a better digital experience to customers.

what is fnz
FNZ develops digital services for wealth management partners (Credit FNZ)

It has four core service offerings – FNZ One, a client, account and portfolio management service; FNZ X-Hub, a discretionary investment portfolio management service; FNZ Clear, a trade execution, settlement and custody service; and FNZ Register, a full-service transfer agency and distribution support for fund managers.

FNZ currently holds more than £330bn in assets under administration from around five million customers globally, and serves some of the world’s largest financial institutions, including Standard Life Aberdeen, Santander, Lloyds Bank, Vanguard, Generali and Barclays.

It employs 1,500 people worldwide – with 500 staff based in the UK, and 350 of those being part of its Scottish headquarters in Tanfield, Edinburgh.

Mr Durham 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 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 is part of a thriving Scottish fintech hub

Shortly after its founding days in New Zealand, FNZ took the decision to expand its operations to Scotland, and it has now established a base in Edinburgh – the UK’s second largest financial centre after London.

As the development of the UK fintech industry has gathered pace in recent years, driven by emerging technologies and open banking regulations, Scotland has established itself as a thriving centre for companies looking to develop innovative finance products.

what is fnz
FNZ is a success story of Scotland’s fintech community

Figures from industry association FinTech Scotland reveal the number of digital finance SMEs in the country tripled during 2018 to more than 80, with the trend tipped to continue in the coming years.

The group’s CEO Stephen Ingledew said: “The fintech community in Scotland is thriving.

“Thanks to a very strong supporting ecosystem we are able to support new and existing companies.

“We believe our uniqueness comes from the connections between the various actors of the Scottish fintech scene – be it the government, universities, fintech firms, established financial brands or our strategic partners.

“FNZ is a shining example of how innovative enterprises can grow and expand on the international stage from 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.”

One of the key factors driving Scotland’s growth as a technology hub is its talent pool, which is fed by leading universities, including Edinburgh and Glasgow.

FNZ looks to maximise this asset, and runs regular graduate schemes that offer training and work placement opportunities in its offices around the world for a range of different roles within the company.