FemTechLeaders on Brexit: Can London Retain Its Fintech Crown?

© Can Stock Photo Inc. / DarrenBakerFemTechLeaders reached out to its UK members for their reaction to the Brexit vote, and their take on how it would impact the financial services and technology industries in the short and long term. Here are some of the observations, predictions, and opinions they shared. One interesting thing to note is that a number of these industry experts are immigrants to the UK. While they focused on Fintech, many also noted a concern for the economic disparity between the two voting camps, as well as a deep unease for the xenophobic and anti-immigrant tone that permeated the Brexit campaign.

On Fintech Startups:

“It is [not] an ideal time for startups who already have planned launches for their products and services in the UK to be passported across EU. As for the payments industry, whether the UK will be a part of the PSD2 will leave a lot of people anxious.” Rashee Pandey, Bankable

“Realistically, it [is] very likely that fund-raising in the UK, particularly in Fintech, is dried up for the time being, until the uncertainty resolves itself. All the potential investors we know of are in a holding pattern, waiting to see what happens. This will impact the ability of new startups to get started.” Paulina Sygulska, GrantTree

“For the global institutions who are headquartered/present in London, the initial hit and spectre of instability raises questions of relocation, distribution of efforts across other geographies etc. while that is happening and the nature of diffusion is decided upon, a lot of POCs and experiments run the risk of being seen as ‘side projects’ that may be consequently paused until the situation settles. That doesn’t mean they will be killed. But a 6-month hiatus is a very long time for a young startup.” Leda Glyptis, Sapient

On London’s status as the leading Fintech Hub:

“There have been some rumours of investors getting nervous – but all in all … London has been an international trading hub for 500 years. We did not leave the EU on June 23, 2016. Sadiq Khan made a true and correct statement after the Brexit vote – London is open for business. And will be for some time to come.” Elizabeth Lumley, StartupBootCamp

“As European cities start to create opportunities, EU citizens will leave London for better weather, better food and lower costs. Business is about opportunity; there’s no loyalty to a country or city.” Soelene Justus, Fiserv

“I believe that London’s position as a global Fintech hub is under serious threat post-Brexit. The UK capital has emerged as a Fintech powerhouse thanks to the concentration of financial services, favourable EU regulations and the talent it can attract as a world-leading city. If any of these factors disappear, and it looks like all three might, then Fintech companies will simply move elsewhere.” Dora Ziambra, Azimo

“London will surely see an impact. The British schooling system does not produce entrepreneurs and we need to find a way to bring non-UK citizens to start fintech businesses in London. We need to find a way to let EU citizens in for short term work (like accelerator programmes). We need to figure out regulatory compatibility. We need to compete with the likes of Frankfurt and Paris who will now have several new banking jobs and with startups who can compete in a much larger market.” Devie Mohan, Fintech Industry Analyst

“With real and meaningful support from Government, we could retain our status as the go to location for innovation. Without it, we’ll be left behind.” Dr. Louise Beaumont, GLI Finance Limited

On Brexit’s potential impact on EU Regulation compliance:

“eIDAS, which ensures that people and businesses can use their own national electronic identification schemes (eIDs) to access public services in other EU countries where eIDs are available [would have come into effect in 2018]. This regulation would have underpinned cross border trade increasing free movement and competition…[and]reduced cost and improved on the current customer experience, and had the opportunity to increase revenue for FS in the UK. How eIDAS is supported after Brexit is yet to be seen – we need to see the timing and decisions around Article 50 to really know.” Emma Lindley, Innovate Identity

“I know for Fintech businesses providing cross-border products and services there is likely to be a lot of focus given the legal and regulatory ramifications of the vote, specifically the impact the outcome could have on passporting of regulatory status across the EU which many firms in London today take advantage of today to enable servicing of payments across the EU.” Dani Townsend, Earthport

On Bank/Fintech Collaboration:

“I cannot see how that will have any long term effect on collaboration. Creativity and agility will be even more necessary and this may even increase the opportunity to come together.” Nicole Anderson, FinTech Circle

“I don’t think the “appetite” was by choice to begin with. Banks HAVE TO play well with Fintech whether they are B2B or B2C not because they find they like their “taste” but because they are missing on their “nutrients”!” Duena Blomstrom, Emotional Banking

“Banks need to focus on being able to operate in the current climate. When your stocks go down 30% in two days the priorities change. It will not be a lack of willingness to collaborate but rather a lack of attention span and resources. Let’s not forget that most Fintech start-ups operate a model where they need the collaboration with a financial services institution on order to access the financial markets and prove their model.” Andra Sonea, Lloyds Banking Group

“In case of TransferGo, the only thing that saved us from crashing during the Brexit was the extensive partnership with banks and unique infrastructure, which enabled company to manage the risk and high volatility. That shows me that probably only in the face of something like that, only connectivity and cooperation can be a key to success.” Guste Sadaunykaite, TransferGo

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