London has earned its title “Global Fintech City”, boasting a strong financial centre for successful tech-startups in the UK and a key regulator of the global fintech community. Brexit is hot news in the UK history and is sparking many debates over the future of many industries with financial institutes thinking of moving their operations overseas. In this article, we will identify the key factors which may affect the future of Fintech in the UK and for companies outside the UK.
So, what is Fintech?
Financial technology, also known as Fintech, is a line of business based on using software to provide financial services. Financial technology companies are generally start-ups founded with the purpose of disrupting incumbent financial systems and corporations1 that rely less on software.
Potential for growth
As with many other markets in the UK, Fintech also has unpredicted future in the unknown fate of the EU Single Market or other trade deals. There will be a dramatic change whatever the outcome of the deals negotiated and one major impact being the way UK businesses will interact with other EU states, both for trade and investment.
In the financial services industry with specific focus on Fintech, one major consequence of Brexit will be changes to the cross-border validity of UK authorisations in EU member says. One benefit of being a member of the EU is that many UK authorised firms are capable of “passporting” their UK authorisation to continue to provide regulated financial services within the EU. This has not only enabled UK established financial services to expand their business overseas but also provided non-EU businesses a base in the UK to provide regulated services with the rest of the EU.
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