There are a few factors that have fuelled London’s rise as a centre for fintech startups, not least of which are the UK government’s favourable regulatory regime and the free movement of talent from Europe. Brexit just made the whole thing a lot more complicated for these companies in London, particularly when it comes to staffing up in a tight labour market.
Will the rampant uncertainty across the pond benefit Silicon Valley or budding New York-based fintech startups? And in the current environment should you think twice before leaving your current job to launch a fintech company?
Eric Benz is the co-founder and chief operating officer of Credits, a platform for creating customized interoperable blockchains that has its development centre in London. He is a U.S. citizen who grew up in Los Angeles and Sacramento, California. He holds tri-citizenship, with a U.S. passport, German passport and British passport. Benz voted to remain in the EU.
Prediction for a post-Brexit world
Given the talk of financial services firms, technology hubs and individual fintech startup companies relocating to an EU nation such as Ireland, France, Germany or the Netherlands, Benz expects that this will be a time when the UK government wishes to further support the valuable technology sector in the UK.
“The UK government has been highly supportive of technology companies for some years,” Benz said. “It is likely to respond quickly to maintain London as a global financial centre and as a technology hub, to retain talent, and to make the UK extremely attractive to do business.
“For example, we already have the Chancellor announcing his intention to dramatically reduce corporate taxes,” he said.
Potential impact on London-based fintech firms
While he voted ‘Remain,’ Benz is not panicking now that a majority has voted ‘Leave.’ Credits is not a regulated financial services business and does not rely on the financial services industry or associated EU legislation such as passporting of financial services products, he said.
“If and when the UK triggers exit proceedings, we expect that the UK’s exit and subsequent change to agreements with the EU will take considerable time to be implemented,” Benz said. “Meanwhile, we can expect a period of uncertainty as to what the specific implications will be for the UK and technology firms.”
While recognising the significant effect the referendum result has had on the UK economy, the EU and on global markets, he said.
So will Benz stick it out in London?
“I have been thinking of relocating [back to the U.S.] later in life, but depending on how things go, maybe this decision will be made sooner than expected,” Benz said. “London is still and will always remain the capital of the world. The fintech scene here in London is a whole different vibe and culture than that of San Francisco or NYC. You have a lot more companies coming here as a result, and in the past three years alone the tech boom has erupted.
“For now, my career path has me focused here, but this could change, and if it does, I will embrace it as I have done in this country when originally coming here from the United States in 2003,” he said.
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