Has the Bre-xodus begun?
The movement of FinTech firms away from what has traditionally been the FinTech capital, which would be London, has indeed started to take root, reports The Guardian. This from Simon Black, who heads FinTech firm PPRO Group and who told the news organization that firms in the sector, stretching from eLending to money transfers and beyond, have been looking to reallocate capital and resources outside the U.K. The culprit has been Brexit, and Black said his own firm was looking at Luxembourg.
Among the issues hanging over the sector are “passporting,” a system wherein U.K. firms can trade and do business on the continent, with that status usually granted to members within the EU. “I don’t know of a licensed FinTech company in the U.K. that isn’t looking at options,” Black said to the Guardian. “Everyone is thinking about it and anyone that is any size, that is employing more than 10 people, is active. The exodus is beginning. It will be more visible in 2018.”
Though negotiations have been ongoing over Brexit, Black said that planning must take into account the possible end of passporting, with the necessity of seeking business licenses in other countries, and that process can take 6 to 18 months. Other areas that Black said PPRO has examined run the gamut from Belgium to the Netherlands. Hiring and other activities have meant that the firm has had to spend more than one million pounds just on startup costs, money that could have been kept within the U.K.
The site said that the FinTech sector at large employs 60,000 workers in the U.K. alone, with earnings of as much as £6.6 billion in 2015.