The UK government has now set out its desired approach to its future trade deal with the EU post-Brexit. The recent attitude of senior UK government figures suggests that divergence from European regulations is its preferred direction. This could be just a bargaining position, but it continues to be a cause for speculation about the London’s position at the forefront of fintech.
This uncertainty has prompted some fintechs to make a pre-emptive move outside London. Research suggests that Dublin is first choice due to its proximity to London and shared language. Research states that 115 firms have chosen the Irish capital. Paris has seen an increase of 68% with 69 firms re-locating.
Despite these moves, there remains a high degree of confidence that London is likely to retain its fintech leadership position. As recently as November 2019, investment figures still indicated that London is still leading overall FinTech investment in Europe with $2.11bn investment, followed by Berlin ($881m), Stockholm ($734m), Paris ($330m) and Milan ($49m). The data also stated that London also led Europe with the top number of investment deals.
Also, the availability of higher levels of investment and funding compared to other European cities continues to ensure London retains its appeal.
While more fintechs are likely pull out of the UK, others will remain and instead see Brexit as an opportunity to grow outside of the EU with countries including US, Australia, Singapore and India being among the most appealing opportunities.