Fintech firms in the UK are getting on with business as usual, despite the ongoing uncertainty surrounding Brexit.
A new survey is released today by Innovate Finance, the industry body that represents the UK’s fintech sector, giving insight into the preparedness of the fastest-growing sector of the economy, as it prepares its members for exit from the European Union.
Key findings include:
- More than half (55%) of the UK FinTech community feels prepared to leave the EU with a transition period.
- Over a third (38%) of companies have not yet taken any additional steps to prepare. Of those that have gone through additional preparation, this has included reviewing data processing, safeguarding the talent pipeline and undertaking risk management procedures.
- In case of a no-deal Brexit scenario, fewer than a quarter (22%) of businesses surveyed feel confident they are prepared. Fintech companies have stressed passporting, cross-border transactions, servicing EU clients & retaining/attracting new talent as the areas Brexit will affect the most.
- Overall, Brexit is viewed by the Fintech industry as either a risk, or offering no distinct business opportunity, with over two thirds (66%) of respondents viewing the situation in that light.
The vast majority of fintech companies are small in size, and like many SMEs around the country, are not as prepared as large financial services institutions. Goalposts and timings keep changing, making it very difficult and costly for them to plan.
While Brexit is a risk, it is somewhat mitigated by their ability to act quickly and pivot. That said, fintech companies are clearly eager for Brexit to be delivered without a cliff-edge scenario that will put their prospects in flux.
Charlotte Crosswell, CEO of Innovate Finance, said: “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.
Innovate Finance is determined to support its members during this challenging time, by distilling and passing on information given to us from Government, professional services firms and regulators.
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.”
Alok Prasad, Deputy CEO & COO of OakNorth Bank, said: “At OakNorth 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.
“In addition, we will be reviewing intra-day data to ensure we are fully abreast of how our customers are reacting and to adapt our approach in real-time. We are proactively adding capacity to support customer inquiries in case our customers want to talk to someone. Again, while we expect limited impact to our business, we are fully prepared to deal with a no-deal Brexit scenario.”
Luke Lang, Co-Founder of Crowdcube , said: “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 £65m in fintech firms raising with Crowdcube.”