Currently, London is a major hub of FinTech. It has secured $5.4 billion dollars alone, and dominates the scene. Through their central location, and access to the entirety of the European Union they are able to quickly spread their technology to the entirety of the area. It is this access to the EU that originally made London and the UK such a hospitable place for FinTech companies.
The UK has voted to leave the European Union. With the pending exit the nature of FinTech’s hub in London is under threat.
Once the exit is executed there are two noteworthy probabilities.
- Nothing — Britain would take some time to re-negotiate its relationship with the EU. While doing so, FinTech companies would be doing the same. It is a possibility that nothing major would happen. Similarly, depending on the negotiations Britain engages in, these companies could potentially have the same level of access to the EU as before.
- Shift in the hub of FinTech — Germany and Switzerland are vying for a larger share of the money going into FinTech. These two countries have increasingly large hubs for these industries, and with the shakeup investors may be more willing to invest in these new locations.
Ultimately, what happens next is unclear. What is clear is that Brexit could have lasting ramifications for years to come for the FinTech industry.
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