Rashee Pandey of Bankable on Brexit’s impact on the future of Fintech

In the wake of the Brexit vote to Leave, we asked London based FemTechLeaders to share their thoughts on the impact the results of the referendum will have on Fintech and Banking. This ongoing series includes extended interviews from those featured in American Banker, amongst others.

Rashee Pandey, Marketing and Communications Manager at Bankable

London, England

@rasheepandey | LinkedIn Profile

What do you think the short term and long term consequences for Fintech will be in the UK after the Leave vote?

Up until last week New York was ‘fin’, Silicon Valley was tech and London was fintech.

Today, the roots have shaken and the UK fintech community in general, unsurprisingly, isn’t very pleased with Brexit.

Brexit currently brings with it a lot of uncertainty. Immediate impact would include investment in fintech start-ups based in the UK significantly dropping and fintechs being reluctant to expand local teams. Clients looking to partner with fintech start-ups here to provide innovative financial products and services across EU may start considering partnering with fintechs based elsewhere instead.

The long-term consequences will be shaped according to how the next two years in negotiations on an economic and political level go. Should the UK successfully negotiate to remain in the EEA, businesses will not be drastically impacted. If not, everything changes – especially regulation, which could be hard-hitting for fintech firms. So I can’t say much at this point.

How will the Leave vote affect the relationship between banks and fintech, and the appetite for collaboration?

I believe it is more crucial than ever for banks and fintechs to collaborate as the financial services industry deals with potential regulatory changes and uncertainty.

For fintechs looking to provide services from the UK to all of EU, they will have to look at local partnerships with banks both in the UK and EU to be able to deploy solutions.

Not to forget PSD2, where the UK played a critical role in its development – banks and fintech firms will have to come together to ensure it is implemented in the UK as it is in the EU for payments regulation to be unified in the region.

What is the best/worst thing about the result of the referendum?

I wouldn’t classify anything as being best or worst, as it is all subjective. However, what leaves me, and perhaps a lot of people, uncomfortable is the uncertainty that lies ahead. Until Article 50 is triggered and the negotiations take place in favour of the UK staying in the EEA region and have access to the single market, months will go by. This will be a very critical period for businesses and so a lot of them could move operations outside the UK and implement a hiring freeze in the UK (as we are already seeing with established financial institutions).

It is also not an ideal time for start-ups who already have planned launches for their products and services in the UK to be passported across EU. As for the payments industry, whether the UK will be a part of the PSD2 will leave a lot of people anxious.

Of course, may I also add, the GBP dropping at its lowest in 30 years was not ideal either.

A lot of FemTechLeaders in the UK are EU immigrants. What does this result mean to you personally if you are an immigrant?

I am a non-EU immigrant. My preference of moving to the UK to pursue a postgraduate degree at Imperial College London and a career in this city was driven by London’s dominant position as a financial services, business and tech leader on a global level along with its multicultural environment.

I just hope that the result of the referendum does not dilute these aspects of London, which have been extremely crucial in shaping this city into what it is today.

What do you think will be the effect on London as the leading Fintech hub?

One of the biggest reasons entrepreneurs chose London as their headquarters is because it provides access to capital, a large talent pool, a regulator encouraging competition, promotes a business-friendly environment and offers the advantage of the EU passporting system. All these provide an agile and scalable environment for start-ups, which have now collapsed to uncertainty.

Hence, new entrepreneurs will be reluctant to set-up in London, and existing start-ups may consider downsizing their teams in London by moving elsewhere – all to avoid the uncertainly attached to London’s current business environment.