LONDON — Two expat fintech entrepreneurs have played down the potential impact of Brexit on UK fintech, after the CEO of TransferWise last week warned he would not choose Britain to set up his business today.
TransferWise CEO Taavet Hinrikus said at a conference last week: “If I was setting up TransferWise today, I probably would not choose London.”
He cited worries around access to talent and the ability to trade with the EU and told the audience, which included the Chancellor and the Governor of the Bank of England: “If London wants to cement its position as the fintech capital of the world, it needs to take some action — action in particular.”
The Russian founder of fintech startup Revolut and the Australian founder of CurrencyFair have come out in defence of the UK’s fintech credentials post-Brexit, contacting Business Insider to respond to Hinrikus’ comments.
Nikolay Storonsky, the CEO of currency exchange business Revolut, said in an emailed statement: “As a Russian immigrant to the UK, I have built a home and a business here and if I was starting over I would make exactly the same decisions and even post-Brexit London would still be top of my list.
“Challenges may be facing the country in the wake of the Brexit vote and once it leaves the EU, but that doesn’t mean London is giving up its crown as the global FinTech capital anytime soon and nor is Revolut as an ambitious UK business with global ambitions.”
Brett Meyers, the CEO and cofounder of currency marketplace CurrencyFair, told Business Insider he feel Hinrikus had overestimated the potential impact of Brexit on fintech. In fact, he says, businesses like his are looking to expand to the UK as a result of Brexit.
CurrencyFair is based in Dublin but Meyers said: “Our biggest customer base is in the UK and it’s one of our main target areas, it continues to be so particularly on the SME side as we move forward.”
Finance businesses are worried that Britain will lose passporting rights in Brexit negotiations, meaning they will not be able to sell products and services to the EU using a local licence. This has led companies like TransferWise and rival money transfer service Azimo to set up new subsidiaries in EU countries.
But this cuts both ways — EU based businesses like CurrencyFair won’t be able to sell into the UK unless they have a licensed subsidiary there.
“Basically any firm that does business across the EU and the UK kind of needs a presence in both and a regulation in both,” Meyers says. “It no-brainer really to get set up there now.”
CurrencyFair will likely open a UK office later this year, he says, which could house as many as 10 staff. CurrencyFair employs around 95 people in total.
Storonsky said in his emailed statement: “Fintech companies chose to set anchor in our capital city, with amazing access to top of tech talent, an adaptive regulatory environment, and the strength of its traditional financial services sector and there is no doubt in our minds that London will remain a hub for Fintech irrespective of what a few fear mongering individuals might say.”
While Meyers thinks the impact of Brexit on firms doing business with or based in the UK will be largely neutral, he does think that overseas businesses looking to expand may avoid Britain.
He said: “I was at a breakfast recently with the Irish-Australia Chamber of Commerce. If you look at firms in, say, Australia they kind of have two choices for a similar culture, same language as a beachhead in Europe: the UK or Ireland. Now they’ll be looking very much at Ireland.”