The official Brexit date is still over a year away, but that doesn’t stop the communities that will be affected by the official separation from worrying about it.
At the NS Tech Emerging Technologies conference in London this week, members of the UK’s financial technology (fintech) community came together to discuss the challenges Brexit poses to the sector.
Go deeper with GlobalData
Fintech is now worth over £7bn to the UK economy every year and employs around 60,000 people, according to the Treasury office.
Brexit could hurt collaboration in fintech
Marta Piekarska, director of ecosystems at Linux Foundation’s Hyperledger project, said she believes Brexit will impact fintech in the UK because it will make things harder for collaboration.
Piekarska said:
“We face a world where all of a sudden startups in the UK will not have an easy time collaborating with the outside world. And it poses a threat to London being that hub [of fintech] as it might not be as attractive as it used to be.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Company Profile – free sampleThank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
Despite these concerns, Piekarska said she is still hopeful for the UK’s tech scene.
“The US is not in the EU yet San Francisco is the tech hub. I think we will overcome these problems. It will be just one more thing to figure out.”
How will Brexit affect the UK’s digital skills gap?
For fintech companies, one of the biggest issues Brexit poses is how it will affect EU nationals applying for UK jobs. The UK is grappling with a digital skills gap that is plugged by EU nationals, yet freedom of movement will be restricted come March 2019.
Emma van Dijkum, head of borrower products at peer to peer lender Funding Circle, says this is a big concern for the company.
She said:
“About half of our developer workforce today are non-UK European nationals. Already it is hard to find great developer talent in the UK. Obviously, if freedom of movement isn’t as easy and non-UK EU nationals feel that it’s not really a nice environment to come to the UK to work, then we will have a problem.”
Last week, the UK government announced it would be extending its Tier One Exceptional Talent visas. These visas are available to anyone outside the European Economic Area who is considered a leader or potential leader in digital technology, as well as arts and sciences. Jeff Tijssen, head of fintech and partnerships at tech consultancy Capco, doesn’t think this will go far enough
“It’s only a relatively small number of visas. So I don’t think it’s going to really fix the issue that we have.”
As well, Tijssen raised the point that process of obtaining the visas is difficult. “When speaking to startups, in order to hire someone from the EU and bring them on via a Tier One visa, it takes ages. The process you have to go through is incredibly complex.”
This may explain why TechCity UK has only managed to grant seven of these specialist visas so far.
The movement of data is a big concern for fintech after Brexit
In addition to concerns about the movement of people post-Brexit, the panel raised concerns over the movement of data.
Ruth Milligan, head of financial services at the tech industry’s lobbying body, TechUK, said:
“Having access to data, being able to move data freely across borders is fundamental. If we don’t have that then we don’t have a financial services industry.”
Luke Scanlon, head of fintech propositions at law firm Pinsent Masons, said there needs to be “careful attention” over this during the Brexit negotiations.
“You can’t really have any confidence about that until we see clearly what the proposals are and how those specific issues are dealt with.”
