is london winning the brexit battle for fintech supremacy?
posted about 1 year ago
posted about 1 year ago
Author: Adrian Kinnersley | Global Managing Director
Financial technology, or ‘fintech’, is revolutionising the financial world, and it’s a sector that’s been showing tremendous growth all across the globe. The concept is to disrupt the traditional models of finance and improve security and reduce the risk of fraud. And it’s working! In fact, there are already examples of fintechs that have become established household names such as PayPal.
While London is hailed as the fintech capital of the country, this is an industry that is booming across the world. In 2013, global fintech investment stood at $4.05 billion. By 2014, this figure had risen to $12.2 billion, with Europe cited as the fastest growing fintech market. In fact, in just 12 months, the European fintech market grew by 215%, with the UK and Ireland alone accounting for almost half of this growth; 42% to be exact.
Although this is great news for the industry, the outcome of the referendum does force us to consider how Brexit could have an impact upon the UK’s starring role in the fintech sector. Important questions that we should be asking right now include: Will Britain become a less attractive option for budding entrepreneurs? Will startups find it harder to secure funding? Will established businesses have access to the best markets? Will companies headquartered in London eventually decide to leave?
There is no doubt that news of Brexit sent shockwaves across every industry, but that’s all they’ve been so far: shockwaves, "Things have slowed, but we’ve seen an improving recovery since the referendum" says Innovative Finance CFO Abdul Haseeb Basit. The strength of the sector is confirmed by the fact the UK Government now cites fintech as a high priority market.
In fact, it appears that Brexit could have actually provided the industry with a significant boost, securing support from alternative markets. Just last year, Japan and Saudi Arabia created the Softbank Vision Fund, with as much as $100 billion earmarked for London-based technology. Also the FCA have signed deals with Hong Kong Authorities so the regulators of countries work together seamlessly.
Recruitment, on the other hand, is more of a concern. Fintech CEO Christophe Rieche states that ‘limiting the pool of talent will make it harder to find stars that enable us to become a global champion’.
However, at present, the effects of Brexit are pure speculation, and we must consider both sides of the coin. While immigration, on the whole, could fall, it is possible — even likely —that routes into the UK for skilled workers will not only remain open but potentially become easier to explore, ensuring the sector has the best people for the best jobs. Similarly, fintech firms are arguably some of the best prepared for implementing remote working policies, bypassing issues surrounding tax and international employment.
It is, of course, easy to say that Brexit could make it more difficult for London to retain its title at the fintech capital of Europe and keep competitors at bay. It is also easy to say that Brexit could benefit the sector by opening up doors to new and exciting markets — particularly Asia — that could thrust London fintech to the next level. Right now, we can’t say what will happen. What we do know, however, is that the UK is certainly holding its own during this time of uncertainty.
What we also know is that there is a lot of live opportunities in this exciting space right now - for more information contact one of our specialist technology consultants.