London is likely to see an influx of EU fintechs that are keen to retain access to the huge UK market post-Brexit, according to new research.
Data published following a Freedom of Information request by regulatory consultant Bovill, shows that more than a thousand payment companies, insurers, banks and asset managers currently based in the European Union are planning to open offices in post-Brexit Britain so they can continue to access UK clients.
The incoming fintechs will help London offset those making plans to establish offices elsewhere in the EU as a cautionary measure.
Over 1,400 firms based in the EU have applied for approval to operate in the UK with more than 1,000 of those planning to establish their first UK office. These findings are not based on what EU fintechs speculated they might do but is based on actual applications made.
By October last year, the Financial Conduct Authority (FCA) had received 1,441 applications from companies to use the Temporary Permission Regime (TPR). While they are applying for full licenses from UK regulators, the TPR enables EU area companies to continue to operate in the UK after passporting expires.
The evidence strongly suggests that London and the UK is likely to remain a leader financial services after Brexit partly due to the scale of its addressable market for fintech service providers and its advanced regulatory infrastructure. The fact that there is such a large number of EU fintechs who have made applications to move to London is yet another example of how the fintech industry is willing to adapt to changing market opportunities.