Brexit—the making or breaking of UK FinTech?

Brexit—the making or breaking of UK FinTech?

Financial Services analysis: In the aftermath of the Brexit vote, financial services businesses are concerned about the impact the vote to leave the EU will have on London’s financial services sector. Jonathan Emmanuel, partner at Bird & Bird, discusses whether London’s status as a world-leading FinTech hub will be affected.

The impact on FinTech

It is difficult to predict what impact Brexit will have on the FinTech scene until after the new Prime Minister, Theresa May, has set out her plan for the UK’s reformed relationship with the EU and access to the single market. Even then we will not have certainty, as her plan will then need to be negotiated in Brussels.

However, it is certain that the Brexit vote has generated uncertainty about the future of European integration which creates challenges for FinTech start-ups and incumbent financial institutions (incumbents). There are now question marks over:

  1. the UK’s continued access to the single market and ‘passporting’ rights
  2. access to top quality talent, and
  3. access to investment for FinTech businesses to grow, which we consider in this article

Accessing the single market and passporting rights

From listening to our clients, one of the key priorities for the UK financial services sector is to retain access to the single market and passporting rights in financial services.


Currently, an incumbent (eg bank, insurance company or asset manager) established in any EU or EEA Member State may exercise a ‘passport’ to provide its services from its home state (where it has obtained authorisation to carry on permitted activities) to any other EU or EEA Member State. This means, crucially, that it does not have to obtain individual authorisation in each state.

London’s status as a world-leading FinTech hub has taken years to build, with over half of European FinTech ‘unicorns’ (eg Transferwise and GoCardless) based in the UK. It is based on a number of factors that are difficult to replicate elsewhere:

  1. strong government backing
  2. a pragmatic regulator
  3. excellent workforce
  4. a stable legal system, and
  5. access to liquid capital

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