London FinTech’s unprepared for No-Deal Brexit
(13 September 2019 - United Kingdom) The majority of London based financial technology (FinTech) organisations are unprepared for the ramifications of a 'Hard Brexit', according to a new report by Innovate Finance, the industry body that represents the UK’s FinTech sector.
Of the 58 London-based FinTech's surveyed a mere one in five feel that they are ready for the impact of a no-deal departure from the European Union (22 percent). Three out of four enterprises surveyed by Innovate Finance stated that they were not prepared for the United Kingdom to leave the European Union (EU) without a deal (78 percent) while 45 percent don’t feel prepared even if there is a transition period. The main concerns of a no-deal scenario shared by the 58 FinTech firms were ‘passporting’, by which firms can apply for a ‘passport’ to conduct business throughout the EU, cross border transactions, servicing EU clients and retaining and attracting new talent. The survey also reports that 38 percent of FinTech’s have not taken any steps to prepare for Brexit, but the majority have commenced tasks such as reviewing data processing, preserving talent and undertaking risk management procedures.
“We pay close attention to factors that may impact the bank and our customers. Given that our business model focuses on lending to SMEs and longer-term consumer savings, we expect the impact of no-deal Brexit to be limited. However, we have sufficient liquidity at the Bank to address the uncertainty. We intend to very closely monitor the news, markets, social media and other information to be fully aware of potential impacts of a no-deal Brexit” commented OakNorth Deputy CEO and COO Alok Prasad, one of the London-based FinTech’s surveyed.
“People are backing FinTech firms in record numbers despite economic uncertainty and the political pantomime we’ve witnessed recently. In the last 12 months over 80,000 people have invested more than £65 million in FinTech firms raising with Crowdcube” stated Co-Founder of Crowdcube Luke Lang.
“At this time of rapid growth in the UK’s FinTech sector, which is at the heart of the future prosperity of the UK economy and innovation, we would prefer our members to be focussing on their businesses, scaling up to conquer new markets, at home and internationally. Hearing directly from the industry and amplifying its message to Government is a vital step to ensuring ongoing growth for fintech. Businesses must take the lead to make sure our FinTech sector remains strong. Now is the time to avoid complacency, further strengthen our position and support the sector’s growth” stated Innovate Finance CEO Charlotte Crosswell commenting on the research findings.