FINANCIAL technology – or Fintech – has the potential to create around 15,000 jobs in Scotland over 10 years, but academics are warning that failing to adopt cutting-edge technologies would have the opposite effect, with a forecast loss of 14,000 jobs, or £635 million in wages.

The warning came from experts at Strathclyde Business School’s Centre for Financial Regulation at a symposium involving Scotland’s bankers, insurers and fund managers. The gathering heard that Scotland’s financial sector had to accelerate its adoption of new technology to avoid a future banking crisis.

Daniel Broby, director of the university’s Centre for Financial Regulation and Innovation, said: “Fintech is evolving at a rapid pace and the consequences of digitalisation are being hailed as a ‘game changer’ for both the banking and securities industries.

“Financial transactions are set to become instantaneous, traditional paper money is being replaced by digital money, and entrepreneurs will be able to raise money directly from the public.

“All this is good news for the consumer. But it is critical that we create the right conditions to enable companies to develop Fintech faster, if Scotland’s financial sector is to remain globally competitive. The technology exists.”

The conference heard that Fintech is being driven by two major innovations – blockchain, and distributed ledgers, which form the technology behind crypto currencies such as Bitcoin.

Blockchain will enable transactions over the internet, and will allow online payments to be sent directly from one person to another without having to go through a financial institution.

Distributed ledgers have the potential to transform the way the financial sector handles identity, transactions and debt information.

Broby added: “In Scottish bank and fund management operations, Fintech is already used. This is, however, largely developed in-house and as such is not cutting-edge.

“The gradual trend has been for traditional banks to move to off-the-shelf solutions and to leave the in-house developed legacy systems.

“We argue that this should be accelerated. There’s potentially a huge opportunity for Scotland but we need to seize it.”

Fintech start-ups around the world saw £10bn investment last year. There are both commercial and regulatory implications involved in the digitalisation of financial transactions, and it impacts all aspects of capital markets from transactions, settlements and fundraising.

The conference was aimed at demystifying the technology and identifying the opportunities that will arise with the advance of Fintech.

In a white paper presented at the event, the academics also proposed a Scottish-backed crypto currency – such as Bitcoin – which they said would have a number of advantages.

“It would strengthen the image of Scotland as a Fintech hub, it would give the banks access to practical blockchain applications, and it would create a nucleus around which to build other Fintech activities,” they said.

Although most crypto currencies have been developed in the private sector, they argue that Scotland could either host such an initiative or develop its own – the backbone of which would be an encrypted distributed ledger that could be maintained by the Scottish Government.