Consultancy Parker Fitzgerald says fintech makes City Brexit-proof
The firm is bullish that post the UK leaving the European Union, financial service can flourish by embracing tech.
London’s financial services industry is safe from an Brexit-exodus of money and talent owing to the strength of its fintech sector, according to a new report from Parker Fitzgerald Group which says it provides a “golden opportunity” to maintain the City’s leading position in global financial markets.
Neither Brexit nor regulation but technology will be the dominant driver of change in global financial services, as well as being the dominant driver of new systemic and firm-level risks, Parker Fitzgerald’s economic adviser, Dr Gerard Lyons argues.
The City of London, he says, is in the prime position to address these risks and reap the potential benefits of a digital financial market place.
Competitive advantages which are ‘Brexit-proof’ include the English Common Law system, the English language, time zone, lifestyle and a mature ecosystem of professional services which will all endure post-Brexit.
The report argues the UK is already an established world leader in fintech regulation with the Financial Conduct Authority (FCA) having creating Project Innovate (in 2014) and the regulatory sandbox (in 2016) to foster innovation in cloud-based financial services, robo-advice, blockchain and regtech.
Also, it says London has developed a huge talent pool with over 71,000 people employed as software developers, more than any other European city including San Francisco with figure set to grow by a further 22 per cent by 2025.
Lastly, it says tech giants such as Amazon and Google are making huge investments in London. Google has announced plans to build a new HQ in London with 3,000 employees, which represents a “vote of confidence” in Britain’s tech sector post-Brexit.
Gerard Lyons, Economic Adviser, Parker Fitzgerald, says the on-going digitisation of financial services gathers pace.
“Through building on the existing expertise and infrastructure in traditional financial services and the already vibrant financial technology sector, the City can adopt a leadership role in digital financial services and become the standard setter for the global industry.”
“Unshackled from a European regulatory agenda we can no longer influence, London will be best placed to maintain competitive advantage – not through aggressive deregulation, but through the intelligent application of regulations designed to manage the new suite of financial and non-financial risks, reduce costs and integrate technology.”
“The key, the ace in our deck, is that London is a place people want to do business in, not just from.”