FinTech Magazine - November 2021 | Page 47

BANKING crisis of their own . The impact of Brexit has resulted in significant changes in several key areas - not least the fact that many talented , UK-based fintech experts originally hailed from EU countries .
Other challenges include licensing problems , increased costs , reduced market options and confusion over how data should be handled now the industry is no longer under the strict regulatory eye of the EU .
Karl MacGregor , co-Founder and CEO of Vyne , an Open Banking account to account payment technology firm , says the greatest impact of Brexit on fintech companies has been caused by the restricted access to EU markets . He explains , “ In order to offer EU businesses payment services , or sell to EU merchants , we now need to be regulated in Europe , which requires having a European entity , or partner with another business to provide these services .” And though setting up an outpost presence in Europe can circumvent this problem , it ' s an expensive and time consuming business , which , MacGregor points out , introduces , “ significant new costs , delays and complexity – especially as neither the UK nor the EU have increased the speed at which they approve new businesses .”
As such , he concludes , “ there is currently a huge backlog of businesses unable to operate effectively .”
“ IN ORDER TO OFFER EU BUSINESSES PAYMENT SERVICES , OR SELL TO EU MERCHANTS , WE NOW NEED TO BE REGULATED IN EUROPE ”
KARL MACGREGOR VYNE
Overcoming post-Brexit challenges However , despite the obvious difficulties that have faced UK fintechs , some experts say that preparation has been key in limiting damage , and many companies have managed to cushion the impact due to good forward planning .
Liudas Kanapienis , co-founder and CEO of Ondato , an identity solutions fintech with a presence in London , Poland and Lithuania , believes the preparedness has even been beneficial for some companies .
He explains , “ The fundamental change , without a doubt , is that the UK is no longer part of a common system , which means that so-called license passporting is changing . Therefore , even before Brexit and , during uncertainty , everyone hastily started looking for licenses in Europe . As a result , many companies now have licenses in the UK and the EU .”
However , he admitsthat the cost of preparedness has not been cheap for the sector , even though the investment has ultimately paid off . “ Fintech itself has clearly faced a negative impact as a result , requiring additional investment , time , and so on . On the other hand , for some , this has become an advantage for licensed
fintechmagazine . com 47