Now that a Brexit starting gun has been fired, can London retain its locus as Europe’s fintech capital? Ahead of Credit Strategy’s F5 Conference, Marcel Le Gouais asks if passporting issues may decide the winner in a battle with Berlin
The moment Prime Minister Theresa May triggers Article 50 early next year, will it also sound the death knell for London as Europe’s fintech capital?
Some German-based companies such as payments platform Traxpay have said as much, claiming earlier this year that London had “committed suicide as a leading fintech centre.”
A deliberately baiting view, yes, but not an isolated one.
Stefan Franzke, chief executive of Berlin Partner for Business and Technology, which promotes investment in the city, told Credit Strategy: “Fintech firms looking for an alternative location after Brexit have Berlin at the top of their list, as the city provides ample opportunity to reimagine banking.
“Since the referendum, we have been contacted by about 25 companies from Britain, most of them startups from the financial sector. We have already supported three of them to relocate to Berlin.”
There was a consensus shortly after the referendum vote that a stasis in investment decisions would be incurred, along with a real problem for companies that had hitherto depended on passporting to EU member states for access to new markets.
For fintech firms that had been relying on passporting, and were looking for fresh investment in spring/summer, the ‘No’ vote dealt a double blow. One of those was Youpass.
Youpass, a fintech firm authorised by the Financial Conduct Authority (FCA) to provide mobile payment services for online games and gift cards, raised pressing concerns about the company’s ability to provide its services across EU countries in future.
Tatiana Rozoum, a director at Youpass, explained however that the passporting authorisation, which forms her company’s power and nature, as is the case for many other firms, is “essential to carry on cross-border services while benefiting from the law harmonisation, made possible with UK access to the single market.”