Here is our pick of the 3 most important XBRL news stories from the last week. 1 UKSEF for 2021 annual reports: Yes? No? Not now? Project leaders implementing the European single electronic format (ESEF) sometimes ask about a related taxonomy called the UK single electronic format (UKSEF) published by the FRC last September. Questions […]
“Its going to be a No-deal Brexit.”
“No-deal could be damage control”
“May might have left it too late.”
“It could be a managed explosion”
And the headlines keep coming. There is some serious soul searching that the country and its leaders need to do after/if this saga comes to an end. An interesting article in The Guardian articulates with pictures, the catastrophe that is waiting to happen if a deal wasn’t reached.
While the nation’s and the region’s future, along with the livelihoods of people are at stake, today we focus on what it means to Fintech.
There was a time, not too long ago, when I felt that pragmatism would prevail through the Brexit deal making process. If that had indeed happened, London could have very well maintained its lead as the Global Fintech Hub. Yet again, mankind has proven to be less rational than I hoped.
I felt there were several factors that helped the City of London maintain its lead in Fintech.
- A matured and a fundamentally strong Financial Services industry
- A strong in-flow of skills from UK and Europe
- The English language
- Time Zone
- A innovation friendly regulatory regime, thanks to the FCA
With the Brexit plans in motion, there was a stress test exercise conducted across UK’s high street banks and the scenario involved key three risk factors,
- 4.7% decline in UK GDP,
- 33% fall in house prices and
- 27% decline in the value of pound sterling
No surprises there, banks passed the stress tests. So the incumbents are prepared. However, as a precautionary measure many high street banks, asset managers and Fintechs have set up shop in Ireland. Thanks to Brexit, Ireland now has over 400 Financial Services firms, and over 100 firms queued up for regulatory approvals to use Ireland as their location to passport services to Europe.
Just looking at the above factors, Ireland shares many of the regional and language benefits that London benefits from. And with an attractive corporation tax of 12.5%, its going to be challenging UK’s might in attracting top Fintech entrepreneurs.
All the above factors are working in Ireland’s favour and it has most of the key ingredients to attract Fintechs if a No-Deal Brexit happened. Top FS players setting shop, a conducive environment for entrepreneurs, regional and language advantage.
The UK’s FCA is clearly struggling to cope with the uncertainties that the political landscape is throwing at them, there is a lack of clarity on how several regulatory aspects will be treated post Brexit – with a deal or no-deal.
From payments to passporting, from transaction reporting to fund management, the regulatory guideline is
KEEP CALM AND CARRY ON, and stay tuned for more updates.
With the EU and UK fighting hard, and with the uncertainty this has caused in the business landscape, Ireland may well be the winner, when it comes to Fintech.
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