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volume 9 • fall 2016
Restricted Market Access
Secondly, U.K.-based nancial institutions likely will face obstacles when accessing the European nancial services market. Switzer- land’s banking sector still doesn’t have full access to the EU’s internal banking market despite the close bilateral relationships between the two. Ironically, Swiss banks typi- cally used passporting from the U.K. to operate in other EU coun- tries—a practice that they will have to quickly reconsider. It also will be interesting to observe what this does to the competitive positioning of some large U.K. banks that have been the go-to bank partners for most ntech startups. You can bet that their French, German and
other EU counterparts already are preparing the pitches to take over that business.
Reduced Talent Pool
Finally, the reason so many nan- cial technology companies decided to establish a global or European headquarters in London is its incredible talent pool with deep knowledge of—among other things —cross-border payments. Although I generally agree with Currency- Cloud’s CEO Mike Laven, who wrote that “these factors don’t disappear with a cross on a ballot paper,”
I think there is reason for concern in the long-term. A CityUK survey conducted before the referen- dum estimated that 37 percent
Europe has never faced such a situation, and it will be up to EU o cials to decide the U.K.’s future position with regard to the common market.
of nancial services companies
are “very likely or fairly likely to relocate sta if the U.K. left the EU.” Similarly, CEOs of London-based ntech companies admitted that they were considering di erent relocation scenarios. Combined with the U.K.’s stricter work visa policies, the reduced attractiveness of British schools for European students and a weakened pound,
I believe we could see a gradual out ow of some of the U.K.’s prime human capital.
What Comes Next?
How will this all play out? No one can say for sure. Europe has never faced such a situation, and it will be up to EU o cials to decide the U.K.’s future position with regard to the common market (ironically, the exact kind of situation U.K. “Leave” voters hoped to escape). But one thing is certain: Payments companies quickly will move from drawing theoretical exit scenarios to making tough business decisions. Unfortunately,
I struggle to see anything but downsides for the U.K.’s nancial services economy even if it takes two years for the dust to settle.
Tomas Likar is the vice president
of strategy and business development
at Hyperwallet, a global payouts provider to millions of independent workers. Likar joined Hyperwallet after six years with McKinsey & Company, a globally recognized provider of management consulting services, where he advised payments rms in emerging markets strategy, mobile payments, corporate strategy and M&A. He can be reached
at press@hyperwallet.com.
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