The UK's vote to leave the EU left many Londoners stunned, and none more so than fintech entrepreneurs, from digital payments to crowdfunding; sectors built on the capital's expertise in finance and its growing tech sector.
In little over a decade, the capital was leading the world, supported by an excellent regulatory environment, an international population and access to the freedom of movement that the European Union provides. Yet despite the UK's decision to leave the EU, the mood among fintech entrepreneurs at Prodigy Finance's Fintech Without Borders event during London Fintech Week was largely positive and upbeat.
GoCardless founder, Hiroki Takeuchi, spoke about the impact the decision could have on hiring, and the damaging constraints that come from the visa application process. There was definite concern among those present that a drop in immigration would squeeze talent, which is the lifeblood of any tech company. Some also stressed that a points-based system cannot be allowed to decrease diversity in a sector that is already dominated by white males.
Several other valid concerns were raised, and those present were under no illusion that the vote would reduce short-term investment and could pose a threat to established companies as well as the traditionally vulnerable startups. But despite this, there was an attitude of ambition, and even excitement, about the uncertain times that lie ahead. Every crisis is an opportunity, and Brexit is no different.
A crucial factor in the growth of London's fintech sector was the 2008 financial crisis, the last time the sky was falling in. A flood of hardworking, intelligent young London professionals found themselves looking for work, just as Tech City became a byword for London's Old Street area, and London fintech was born.
Many of the speakers present at this event entered the industry around the time of the financial crisis, and the international companies that they have built would not exist if the economic situation had been different. Rob Moffat, Partner at Balderton Capital, made the point that entrepreneurs are naturally optimists, which is exactly what London needs right now.
Seedrs founder Jeff Lynn asserted that the nature of the fintech sector means that instability is not necessarily a threat to talent. The individuals that thrive in the sector are attracted to the challenge, which is often why they leave previous jobs in investment banking. If anything, the new opportunities could attract more entrepreneurially minded people to join the industry and build the financial system of the future.
With Brexit creating more international borders, there will be more bridges to build. This will lead to regulatory headaches but will also create opportunities for ambitious entrepreneurs. London has led the charge for fintechs with a global outlook, and ironically the Brexit vote could strengthen this mentality. Jeff Tijssen, head of fintech at Capco, commented that London startups would now have to be globally minded from their first day.
While this runs contrary to the traditional "minimal viable product" approach where tech companies start small, it could yet inspire the next tech unicorn. To give just one example, hundreds of millions of people in the developing world will access both financial services and the internet for the first time in the coming years. The referendum has not reduced our ability to build companies that can support them.
Whether it's accessing credit to attend university or doing something as simple as opening their first bank account, London fintech entrepreneurs should waste no time tapping into these new markets. Massive customer bases are opening up as automation and machine learning allow us to provide services more efficiently at greater scale. Political uncertainty has not reduced these opportunities.
The most important thing for London entrepreneurs now is our attitude. We need to confront the inescapable facts of Brexit and the likely loss of jobs, funding and confidence that it will bring in the short term. But in doing so, we have to remember our origins. London fintech rose to the top in the teeth of the last financial crisis. Weathering the current political crisis might be what keeps us there.
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