Once the Brexit vote to leave is known, traditional banking will flounder and provide some opportunity for new firms.
Britain has sought to lead the way in fostering financial technology – such as platforms that allow individuals to lend small sums to businesses or smartphone apps for payments – to “disrupt” the dominant, big banks on the high street.
Dubbed fintech, the area employs more than 60,000 people with revenues of $9.40 billion in 2015. However this is tiny compared with the overall financial services sector. At the moment none of them is big enough to need a European market.
Rhydian Lewis, founder and chief executive of lending platform RateSetter, told an Innovate Finance conference said that this means that Brexit might discombobulate the incumbents for a number of years, allowing fintech to move into that space.
Basically because anything that puts innovation further down the list for traditional firms creates more breathing room for fintech.
Markets larger than Britain would be needed longer term for the fledgling companies to “scale up”.
In the long term Brexit would deprive fintech of potential access to a large market at a time when the UK regulatory regime was still challenging.
UK financial services minister Harriett Baldwin told the 1,400 delegates crammed into the financial district’s ancient Guildhall that the government would step up efforts to foster fintech.
A new information hub would make it easier for start-ups to find legal and accounting services, and a government agency will build “fintech bridges” for them to expand internationally, Baldwin said.