The UK fintech sector must concentrate on Asian markets and nurturing homegrown talent if it is to maintain its position as a global leader for innovative fintech companies post-Brexit, according to the chancellor of the exchequer Philip Hammond.
Speaking at the inaugural International Fintech Conference today at Old Billingsgate in London, the chancellor said: "We cannot rest on our laurels, we must constantly move onward to remain the best place in the world to start and grow a tech business. We can't remain the number one place for fintech and the other technologies of the fourth industrial revolution by simply relying on our ingenuity, talent and openness, we have to go out and get the business."
Hammond identified the UK's time zone, talent, entrepreneurs, markets and the overarching regulatory and tax environment as being responsible for positioning the UK as the global fintech capital. He said the fintech sector must continue to "strive and graft and fight to seize opportunities", particularly in the Asian market, if it is to maintain this position after Brexit.
The government has already established fintech bridges with India, China, Korea and Singapore to help UK scale ups to expand into Asian markets. "If the UK is going to make the most of the freedoms it will have after leaving the European Union we have to build trade links with the fast-growing economies of Asia," Hammond said.
Access to talent
Access to the best talent from overseas is a key concern for the fintech sector post-Brexit. The chancellor attempted to calm these worries, while also reiterating a protectionist stance in regards to increasingly turning to British workers.
He said: "While we need to continue to attract the brightest and the best from around the world to these shores, we must also do better at nurturing and developing the home-grown talent to drive our economy forward in the future."
This includes the chancellor's Spring Budget pledge to fund new 'T-Levels' for 16-19 year olds. This will ensure, according to Hammond, that "we are producing the people with the skills and the aptitude to become the next wave of innovators, entrepreneurs and investors."
How this will play out is yet to be seen, but there is certainly cause for concern. With rollbacks of the H-1B visas - so important to high-skilled tech workers - already occurring in the USA and Britain's home secretary Amber Rudd confirming that free movement of labour would come to an end with Brexit, the tech startup sector is keen to see the government clarify its position over who it can and cannot hire in the future.
Taavet Hinrikus, CEO at six-year-old London fintech TransferWise, voiced the concerns of many startup founders when he took to the stage. An Estonian immigrant founder, Hinrikus employs a high number of workers originally from outside of the UK at its 100-strong office in Shoreditch. He believes that whether talent is "home-grown or immigrants doesn't really matter, we just need the best talent."
"When we talk about home-grown people we need to instill a more entrepreneurial attitude, as well as development and engineering skills," Hinrikus said. "When it comes to immigrants we need it to be easy to import talent, and make them feel happy and welcome. If London wants to cement its position as the fintech capital of the world the UK needs to take decisive action pretty quickly."
Hinrikus reiterated that although he believes London was the best place to found a fintech company in 2011, "if I was setting up TransferWise today I probably would not choose London."
He went on to talk about the ways other major technology and financial hubs, namely New York, Singapore, Paris, and Berlin, are already copying the UK blueprint for helping fintech companies to thrive, and how post-Brexit, these hubs will only become more attractive to new companies.
"Over the last couple of years we have seen many other governments around the world look at the UK for inspiration when it comes to fintech," he said. "Imitation is the sincerest form of flattery and other countries are looking to the UK and what the regulators are doing here and copying what Britain has done. They are looking at opening up access to faster payments, fintech accelerators, Project Innovate from the FCA; all of these things are being copied from Abu Dhabi to Korea, to Singapore."