Prospect Of ‘No Deal’ Brexit Has FinTechs Scrambling

Deal or no deal? No, not the game show, because in the case of “no deal,” it seems like no one wins. That’s a nod to Brexit, of course. And the prospect of “no deal” Brexit has some FinTech firms seemingly anxious about what lies beyond the horizon, and scrambling for contingency plans.

As CNBC reports, FinTech execs and industry observers at the Paris FinTech Forum said they have been eying a “worst case” scenario for Brexit, amid a brave new world where suddenly “frictionless payment and banking solutions” are likely to encounter at least some speed bumps.

“It is obvious the bigger the market is, the better it is for fintechs, the faster it is they can start, the more opportunities they have,” CNBC quotes Wim Mijs, CEO of the European Banking Federation as stating on Wednesday. “If you cut off that market, you’re hurting yourself, which is Brexit in one word.”

Some executives told CNBC that there may be a need for these tech upstarts to acquire banking licenses. That need would become apparent as British firms would not be able to operate any longer throughout Europe with domestic licenses. Now those firms would have to apply for licenses in the countries where they aspire to do business.

The deadline looms, as of the end of March, as Britain prepares to leave the EU. In one example, Gobaba applied for an Estonian license two months ago, and Serkan Zubari, who serves as director of the London-based cryptocurrency exchange, said, “We have to have some options, and we have to think about our future.” Other more traditional finance firms have licenses in place where they want to operate.

In the meantime, as CNBC reported, even amid the Brexit uncertainty, enthusiasm for FinTech continues, as KPMG has estimated that $16 billion from investors flowed to FinTech companies in the U.K. as measured through the first half of 2018.