LONDON — In 2016, the British public voted for a divorce from the European Union (EU) with more than 17.4 million opting for Brexit. Backers of Brexit believed that the EU failed to address the economic problems that had been developing since 2008, including the 20% unemployment rate in southern Europe.
There is also a growing distrust of multinational financial, trade and defence organisations created after World War II [Forbes]. Many who oppose the EU think that institutions like NATO and IMF no longer serve a purpose, and these organisations take control away from individual nations.
Two years on, the formal process to leave the EU has been delayed twice as the Members of Parliament (MPs) rejected the proposed Brexit deal under former Prime Minister Theresa May. This also led to Mrs May’s resignation. Despite negotiations and promises, the current Prime Minister Boris Johnson has also missed the latest deadline on October 31 after the MPs failed to pass the revised Brexit deal in October, extending the deadline to January 31, 2020 [BBC].
Brexit – Will Business be as Usual?
The international society has been concerned with the future relationship between the UK and the EU, as well as the relationship among constituent units within the Kingdom. After the withdrawal, while the UK is able to sign and implement its own trade deals with other countries after Brexit, the economic connection of the UK and the EU will be retained. This is protected by the Revised Political Declaration, which states that the framework for the future relationship is based on a free trade agreement [Deal]. As for the bilateral relationship between the two sides of the Irish Sea, the deal designates that Northern Ireland will remain part of the UK’s customs territory. This means that if the UK signs a free trade with another country, Northern Irish goods would be included as part of that agreement.
The business landscape will continue being guided by rules and regulations. The Financial Conduct Authority (FCA), a financial regulatory in the UK, will ensure that markets work well and that the UK remains open for business regardless of the outcome of Brexit. The FCA has undertaken extensive preparations for the situation of a no-deal Brexit, and any potential risk that may disrupt the financial services industry is being monitored by it. Additionally, the FCA will continue to be an active supporter of international engagements and global standards. It is on this basis that the FCA can enhance the flow of financial services between jurisdictions and guarantee fair competition. The international cooperation has benefited, and will continue favouring consumers and investors both in the UK and abroad — the boom in FinTech businesses is an example.
FinTech Powering the UK Economy
Regardless of the developments or outcome of Brexit, foreign venture capitalists are still flocking to the UK. According to the latest Pitchbook research, the value of venture company deals has reached USD 4.4 billion this year, mostly attributed to US investors.
As the largest technological hub in Europe and a leading global financial center, London has been able to foster high volumes of scale-up companies. For the US investors, there are a lot of opportunities in the UK, especially in the emerging industry of financial technology (FinTech). Hundreds of deals have been signed this year in London. They include major investments such as a $175 million Series D deal for WorldRemit involving Accel Partners, and a $144 million Series F funding round for Monzo, led by Silicon Valley investment firm Y Combinator.
Small businesses are also powering the UK economy. Thanks to FinTech, more business opportunities are created, as it is easy to buy goods and services offshore and pay remote workers. Additionally, FinTech helps small businesses expand, diversify and earn high profits with lesser cost and faster transactions. In this way, small businesses can focus on what matters the most to them — products, services and customers.
Discover More FinTech Opportunities in the UK Today
Despite the uncertainty concerning Brexit, the UK is still one of the leading FinTech capitals in the world. The availability of business capital and investment funds makes it the perfect breeding ground for businesses that are keen on the concept of FinTech, which enables many startups to showcase their products and improve their services.
For foreign companies that want to explore FinTech opportunities in the UK, it is important to seek the right advice from trusted corporate service providers. At DesFran, we’ve always been actively involved in the technology sector with a team of professionals who have strong expertise in the field, specifically in regulation and licensing.
Contact our DesFran experts today for a free consultation.
The growth of FinTech and its positive applications in the UK, Whatinvestment.co.uk
Despite Brexit London’s unicorns are still attracting foreign money, Zdnet.com
UK Politics, BBC.com
3 Reasons Brits Voted for Brexit, Forbes.com
How FinTech is Powering Backbone of UK Economy, Businesscloud.co.uk
Should businesses open their eyes to the benefits of FinTech, Telegraph.co.uk
About the Author
Jessie Kang is Strategic Communications and Research Intern at DesFran. Jessie has been in the field of research for almost 10 years, and will be completing her PhD studies in Nanyang Technological University soon. With keen interest in cultural studies, Jessie conducts research in narrative studies and postmodernist fictions as part of her academic work. The internship at DesFran allows Jessie to apply her research experience and skills in the commercial setting while learning more about the finance industry.