In a significant historic moment, the Prime Minister of the UK, Theresa May, triggered article 50.
Under the terms of the EU constitution this marks the start of the UK exit from the EU and all of the negotiations that will be taken not just between the UK and EU, but also between the UK and other countries who will be traded with.
This is the end of a 44-year relationship, and whilst some are nervous about the fallout from the breakup, many industry experts are saying that fintech start-ups who are developing financial software are set to shine during these uncertain times.
Within this article we will set out both the challenges and opportunities fintechs are expecting to face as the UK separates from the EU.
Nobody said that Brexit would be without its challenges for businesses, the economy more widely, and individuals. This would not be a useful article if we did not represent both sides of the story.
On that note, these are some of the things that either will, or are highly likely to be challenging:
- Limited access to the EU and a smaller home market.
- Reduced access to talent from the EU.
- Fintechs will have more regulators to deal with.
- Reduced access to capital.
The scale of each of these challenges will of course depend upon the deals that are done by the negotiating team. However, none of them feel like major barriers to fintech success upon consideration of the opportunities noted in the next section!
- Complete freedom to enter into trade deals with the rest of the world on terms that suit the business, and not that suit the EU.
- More freedom to bring on board talent from the rest of the world.
- The UK regulators themselves will have their hands untied from EU compliance which some would say was stifling innovation and competition.
- No unrestricted competition from EU start-ups.
There are two sides to every story and we set out to give a quick overview of the challenges and opportunities Brexit would present for fintechs.
The challenges are all negotiable and do not seem insurmountable. The opportunities are huge, particularly in terms of the unrestricted access to trade and recruitment on a global scale.
It is easy to see why fintechs are viewing Brexit as an opportunity as opposed to a threat to their business.