As the time is ticking on for Brexit, financial companies are taking precautionary measures to avoid being hurt by a no-deal scenario, in order to continue operations within the UK and the European Union, even after Britain exists the bloc.
Business and trade analysts have been raising their concerns regarding migration of business due to uncertainty over no-deal Brexit. The recent trends have confirmed these predictions as companies are moving their business operations out of the United Kingdom, to other European Union members nations like France and Germany.
The financial sector is among those who have witnessed the maximum movement. Finance firms are reportedly setting up offices in other EU nations, and have already started to move hundreds of employees. The trend already sees assets worth billions being transferred out of the UK to new bases. Financial business migration out of London picked up speed in the past two weeks, as uncertainty on the Brexit deal or no-deal continues to create fear in the sector. However, the sector has been planning to tackle the situation since 2016.
Fintech enterprises form an indispensable part of the movement. Australian fintech firm, Optal recently revealed that the Central Bank of Ireland had given the approval for its Irish subsidiary OptalFinancial Europe Limited.
The authorization gives the company to conduct its European operations from the country to avoid the consequences of a no-deal Brexit. Its also gives the company a chance to operate as an e-money platform. Similarly, in February earlier this year, MarketAxess Holdings Inc., another Fintech firm, revealed that it has bagged approval from the Netherlands Authority for the Financial Markets (AMF), to conduct business as a Multilateral Trading Facility (MTF), while acting as a Data Reporting Service Provider (DRSP) in the country.
Even the London based popular mobile banking fintech start-up, Revolt reportedly acquired its European banking license in December last year. All of this suggests that the financial sector expects a large scale shift in a no-deal scenario. Companies shifting base to other EU nations will cause Britain a lot of business and talented professionals.
In fact, this is not the only sector which has been witnessing a shift from the UK two other member countries of the bloc. Technology and Automobile are two other sectors which have been migrating. Many big players in both these segments have already shifted their base at least scaled down operations in the United Kingdom. Also, Brexit has prevented companies across various sectors to hire new employees, as they are holding back until clarity on Britain’s exit from the European Union.
Britain has still not agreed on a deal for Brexit. If it exists without a deal, businesses in both, the EU and the UK will suffer serious blows. With revised taxes, duties and immigration laws in place, Britain is expected to lose its position as the European leader in business, which has already let Germany and France gain from this.