Scotland’s national economic development agency has awarded more than £3 million of funding to the Financial Regulation Innovation Lab.
Scotland’s national economic development agency has awarded more than £3 million ($4.2m) of funding to the Financial Regulation Innovation Lab in Glasgow over the next three years.
The Financial Regulation Innovation Lab (FRIL) – which was established in 2023 via state cash from Innovate UK – is described as a ‘centre of excellence focused on advancing UK financial regulation through research, innovation and industry collaboration.’
The centre’s new Scottish Enterprise funding comprises up to £1.98m awarded to FinTech Scotland to operate FRIL, working in partnership with the Glasgow-based University of Strathclyde; and up to £1.2m to be awarded directly to small- and medium-sized enterprises (SMEs) through ‘innovation calls.’
FRIL will ‘accelerate the adoption of new solutions enabling fairer financial futures and supporting technology innovators to scale their businesses,’ FinTech Scotland states in an announcement. The types of industry regulatory challenges to be addressed include: ensuring artificial intelligence (AI) is adopted by providers ‘in a way that is responsible and explainable to ensure fair financial outcomes for businesses and consumers’; and ‘finding solutions that strengthen the effectiveness, integrity and efficiency of financial crime controls.’
‘Agile prioritisation during the programme will address industry needs and emerging regulations around the use of AI, open data and digital assets,’ FinTech Scotland states. ‘By uniting industry, academia, technology innovators, government and regulators, FRIL will turn shared insight into products, partnerships, investment and real‑world adoption.’
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Scottish Enterprise, a non-departmental public body of the Scottish Government, is providing the funding as part of its ‘Scaling Innovation’ focus (or ‘mission’) – one of three focus areas alongside energy transition and productivity. The FRIL investment is also seen as supporting the Scottish Government’s Innovation (2023) and Economic Transformation (2022) strategies, as well as the ‘UK’s Modern Industrial Strategy’ – June 2025).
“FRIL is a shining example of how collaboration between industry, academia and regulators can make a real impact, utilising the development of advanced technologies to create high‑value jobs and attract private investment,” said Scottish Enterprise managing director for innovation and investment Jane Martin. “This funding underscores our commitment to fintech innovation and our support for innovative businesses, helping them to scale with confidence and build the global competitiveness of Scotland’s financial services sector.”
“The opportunity from the current and forecast future growth of fintech is huge,” said Fintech Scotland chief executive Aleks Tomczyk, who recently succeeded Nicola Anderson – who was unveiled as director of scaling innovation at Scottish Enterprise in January this year.
FRIL has supported 120 fintech SMEs to accelerate solutions, enabled £28 million in committed private investment and ‘delivered a projected 6:1 economic return on investment for every £1 of public funding,’ FinTech Scotland states.
“We are proud of FRIL’s impact to date,” Tomczyk continued. “FRIL’s success evidences the strategic value of innovation to the economy and the strength of our fintech cluster in simultaneously delivering growth and better outcomes for consumers. Scottish Enterprise’s investment will use FinTech Scotland’s proven Innovation Labs model to accelerate innovation in large companies and speed growth in fintechs.”
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Funding through Innovate UK – the UK’s national innovation agency supporting business-led innovation in all sectors, technologies and regions – got FRIL off the ground.
Innovate UK is part of UK Research & Innovation (UKRI), the national funding agency that operates across the whole of the UK. UKRI is an executive non-departmental public body, sponsored by the Department for Science, Innovation and Technology (DSIT).
FRIL’s previous funding – which in total comprised £5m (of which £1.7m was secondary grant funding directly to fintech companies) and was split into two phases – came after Glasgow City Region was selected as one of three pilot areas (alongside Greater Manchester and the West Midlands) to share £100 million in UK Government ‘Levelling Up’ funding. This created the Glasgow City Region Innovation Accelerator programme.
“We are delighted to be a partner again in delivery of FRIL phase three,” said University of Strathclyde Professor Eleanor Shaw in the new announcement.
FinTech Scotland is a non-profit body jointly established in 2018 by Scottish Enterprise, the financial services sector and universities. It describes itself as acting as a ‘strategic enabler and cluster management body focused on leveraging the potential economic (i.e. productivity, innovation, business creation, employment) and social (i.e. financial inclusion, well-being and accessibility) benefits arising from becoming a leading global centre focused on fintech innovation.’
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