Brexit e Fintech: cosa succederà se il Regno Unito lascerà l’Europa ?
Una lucida analisi della GROW VC GROUP, dal suo blog:
“The UK celebrates an in-out EU referendum on June 23. The financial services sector is a major backbone for the UK economy, and fintech an emerging sector within it. Today, London is arguably the world’s premier fintech hub. How could a potential Brexit impact this?
Our analysis concludes that brexit poses a significant threat to London’s fintech crown.
Firstly, the UK regulator, the FCA, has played an important role developing the fintech market. It has enabled a culture that allows and encourages innovation of new services; where regulations and guidelines are based on actual experience and industry feedback loops. In contrast, many countries have opted to define exacting rules beforehand, leaving much less room to innovate and often stifling the very sector they aim to grow.
Historically, London has held a strong position in the finance world. It counts leading professionals with world-class finance competencies. Looking closer at fintech, it requires a mix of several key skills including 1) finance, 2) Internet services, 3) technology, and 4) data science. Other than strong finance skills, the UK’s track record to build global technology and Internet companies is however not world class.
The London finance sector has a lot of foreign workers, including many EU immigrants. Cross border workforces represent an important topic in the whole EU membership debate. Recognising the importance of foreign labour skills, even the ‘Leave’ campaign suggests the UK could continue to take on foreign workers. It would however create systems to control and monitor who and how many are welcomed into the country.
In principle, a brexit would change at least the following for finance companies based in the UK:
no direct access to EU’s internal finance market
greater complexity in hiring employees from other EU countries
increase the odds that EU citizens start companies in EU countries, not in a post brexit UK.
The impact of these aspects depends on services, company resources and the development of digital finance services.
It is clear the debate and months leading to the referendum are already having questionable effects. Recruiting in the UK’s finance sector has slowed according to a recent Financial Times article (paywall) as companies see uncertainty and delay recruiting decisions until after the vote. If ‘Leave’ wins, the ensuing EU resignation process could take up to 2 years, though negotiations and developing new business frameworks are expected to take even longer. Companies however would be required to adapt to the new situation immediately while having to make investment decisions based on longer term plans.
Fintech companies are typically small and medium size enterprises, often startups. They also count among their workforces employees from EU countries. Many have EU founders or founding team members. With tight resources, faced with administration hurdles and visa processes, changes to immigrant workers could impact operations. Add to that the fact the UK has its own very particular visa types and rules, the panorama would leave many fintech startups with additional hiring stresses. In addition to visa complexities, UK based fintech would find it hard to operate in European markets, at least until new frameworks are established.
Without its immigrant professionals, the UK could face shortage of finance professionals. It would lack essential skills and experience in areas such as technology, internet and data science. Skilled workers from outside the UK often make up for the shortfall where highly analytically skilled professionals are needed. Though the UK has strong education establishments, it often lags other European countries when it comes to computer science, mathematics and other more analytical courses.
Fintech requires sound skills in these areas, could stand to lose out if fewer European applicants wish to (or are able to) enter the country.
Fintech and digital finance enables companies to operate globally. Though local licenses may still be required depending on the service offered, the UK has been able to benefit from the global appeal of its fintech ecosystem. In a post brexit environment, this may no longer hold true, and other cities more accessible may emerge as beneficiaries. This, as a result of an unclear trading environment where new frameworks need to be established.
As regulations develop around the world, the UK’s relative strength could diminish unless it stays one step ahead. Today one can argue the UK offers better and more liberal regulation for fintech companies. However, companies wanting to operate in other countries must fulfil specific requirements in those countries too. Services built on fintech are different from say, traditional fund management and investment banking. Fintech, for example, allows more direct interactions and consumer engagement. Additionally, it has been said a non-EU UK may in fact operate as an offshore location. Certainly it is the case that some investment banking and fund management services operate in offshore locations successfully.
However, as offshore regimes attract greater scrutiny, and the need for more transparent financial services gathers pace, this becomes a remote possibility.
Further, some EU directives such as PSD2 also offer new fintech opportunities, and these would not be possible to non-EU UK.
The UK has promising fintech startups, but they have yet to achieve significant success outside the UK. If we factor in the fact that there isn’t a strong history of UK businesses with significant international success in Internet, retail or technology, UK fintech success on a global scene is not a foregone conclusion. In contrast, other European countries such as Germany, Sweden and Spain, have created highly successful modern consumer business globally.
Although the UK and London have a strong position in fintech globally, the market is still in a very early phase and making predictions to which countries will dominate is a risky exercise. We have outlined several risks facing UK based companies when looking for growth in Europe and globally. A brexit would without doubt add to those risks.
The biggest brexit risk for British fintech is not necessarily access to other markets.
As all successful business leaders will attest, a critical factor underlying success is its ability to attract top level entrepreneurs, team members and employees. Add to that the importance of an environment conducive to grow business, one that encourages talents to come and innovate. For Europeans post brexit, it would be easier to go to hubs inside the EU. And for those willing to go through potentially complicated visa (or similar) processes, there are other options like the US and some Asian fintech hubs to compete with the UK.
While it is hard to evaluate a post brexit landscape as it would be a new paradigm, we can assume it will create uncertainties for fintech companies and especially small and medium sized companies.
Business needs certainty with which to plan for the future and unfortunately, a brexit would present particularly high hurdles.”