When it comes to predicting Brexit’s impact on UK finance, fintech, and London’s status as a hitherto virtually unchallenged European fintech hub, there’s a sense that media and fintech professionals are veering dangerously close to composing Young Adult fiction. Katniss Everdeen would feel right at home among the explosive adjectives that have been attached to the UK and London financial scenes ever since the UK narrowly voted to leave the European Union on June 23rd: “panic,” “fallout,” “kill,” “under threat,” and “huge hit,” to name just a choice few. These fearsome adjectives are usually paired with conditional words, such as “might,” “could,” “will,” and “probably,” for the simple reason that it’s unclear exactly how, when, and to what extent Brexit will disrupt UK finance as we know it. Nevertheless, if you can forgive the adjective frenzy, you’ll find that a number of journalists and fintech specialists aren’t just reading their tea leaves or gnashing their teeth, and have come up with some compelling post-Brexit scenarios.
It all hinges on … bank passporting?“So this is the key question...” financial blogger and chair of European networking forum the Financial Services Club, Chris Skinner writes in his blog, “Will Europe choose to ruin London, the British economy and Fintech by using the one card they hold that could possibly do that: removal of bank passporting?” Passporting means that as long as a bank is based in the UK or has a subsidiary there, it can provide services across the EU. If the EU decides to leave passporting laws as they are, London fintech would remain largely unchanged. However, Skinner argues, if European leaders decide to punish the UK by removing Britain’s right to passporting, most banks will need to relocate to Europe, and the GDP, taxes, and employment in the UK would get pummeled. Leading law firm, DLA Piper seconds Skinner’s passporting concerns, but is convinced that Brexit is more than a single-trick hat: in the coming months, Britain’s financial industry will have to come to terms with new EU regulations, relations, and legal frameworks, no matter what the EU decides to do about Britain’s passporting rights.
Will the last person to leave Britain please turn out the lightsLike all great epics, Britain’s EU referendum featured a struggle between two distinct forces. Whether or not voters understood just what they were voting on, fintech expert and investor Pascal Bouvier places the vote within the context of an ongoing battle between globalization (Bremain) with its young, educated, urban centers, and those nostalgic for Vera Lynn’s white cliffs of dover and the independent British nation-state (the Brexiters). Bouvier tackles a wide range of fintech subcategories and explains why so many of them stand to benefit from at least partial relocation outside the UK post-Brexit. Bouvier’s analysis concedes that the ultimate Brexit impact will depend on if and how the EU and the UK are able to create an amicable relationship from the shambles of their marriage. For Bouvier, it’s clear that Britain’s fintech offspring need the UK to swallow its pride and push collaboration with the EU:
Whatever the rollercoaster of Bremotions, Branger for some, Bregret for others, Brisapointment, Bronliness, Brictory, Bredemption – i am pushing corniness to its limit here I realize – Fintech Brexistentialism tells me it is easier to influence an integrative movement from the inside than the outside.