Soelene Justus 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.

Soelene Justus, Senior Marketing Manager – Insights, Industry Relations

London, England

@SoeleneJ | LinkedIn Profile

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

We need to consider the human side of this change and place it on the scale together with regulatory and funding factors.

Say you are an European working in London for a fintech company, say you launched one; now say you feel unwelcomed, unwanted, you see the United Kingdom becoming “England and Wales”, and a glance over the Channel reveals some opportunities in Europe. Some would take their businesses elsewhere, and funding would follow them wherever the opportunities and stability are.

Now, put yourselves on the shoes of the European leaders. Should the EU forge ahead with its plans, wouldn’t it be important to make an example of Britain for the sake of the “club’s” stability? Britain will seek a Norwegian-like deal, but I doubt the EU will make it easy, that would mean the demise of the EU dream and it would start to disintegrate.

This means that if/when Article 50 is evoked, the EU will make it tough for the UK. European countries will be ready to welcome the “leavers of the broken kingdom”. The UK could obviously play a hand like Ireland and enter some aggressive tax giveaways to companies, but fintechs wanting to go beyond the channel will have to deal with more than one system of regulatory burden and that might prove too costly to some.

The future will depend on how tough the EU decides to be.

The biggest winners would be Dublin, Berlin and an independent Scotland. Once you’re out of the “club”, “It’s business, it’s not personal.”

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

Business as a whole will not go on as normal as investors hate uncertainty, that’s the truth for start-ups and banks. Less funding, recruitment freezes and increasing costs will prove fintechs too toxic for banks to touch and certain projects too risky and costly for banks to run.

On the other hand, banks in good financial standing will be able to acquire some start-ups and “feed” their innovation labs.

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

The political bedlam and the revelation that most of people in power were unprepared for the result because they were so divided.

The good thing is that young and old people went to vote and many became interested in politics. Let’s hope most are smart enough to see the lies and the incompetence shown by many of our leaders. I saw a cartoon that describes it perfectly.

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

I’m an immigrant from South America and recently became a UK citizen. My passport interview is next week and I’m trying to hold on to the reasons why I felt so proud of this country and its people to apply for this status in the first place.

I think that this process gave rise to very dangerous sentiments – distrust, fear and intolerance – and made an icon of a disgraceful type of politician (I refuse to write their name). I am concerned that far right extremists will take the result as an endorsement for their beliefs.

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

See Q1. Plus:

• This city thrives thanks to many immigrants bringing their skills to the finance industry.
• EU grants and experts expand our knowledge in our universities and research centres.
• Should Scotland leave the UK and the EU decide to make an example of its rebel cousin, the London we know will suffer a lot.
• As European cities start to create opportunities, EU citizens will leave London for better weather, better food and lower costs. Business is about opportunity, there’s no loyalty to a country or city.