Fintech is a fertile hunting ground for players seeking bigger and bolder growth opportunities. The industry is enabling imaginative start-ups and traditional financial giants alike to simplify and streamline financial services, reach out to new customers, and test the limits of what technology can do.
But this transformation also brings with it increasingly difficult barriers to overcome. If only heightened regulatory scrutiny was translated into clear and comprehensive legislation. And while increased competition is lauded as being beneficial to everyone in the industry, it seems the “old guard” are not ready to embrace their newer, smaller upstarts in the spirit of collaboration just yet. That’s before we even get to Brexit…
UK Fintechs Are Feeling the After-Effects of Brexit
The drawn-out “deal or no deal” saga was just one of many complications thrown up by Brexit. Even as December 2020 heralded the unveiling of the final Brexit deal, this generated more questions than answers. A question mark was left hanging over financial services and fintech. No transition period was outlined, nor were any arrangements made to replace passporting of financial services to EU markets.
As a result, from 1 January 2021, UK fintech firms were no longer passported, which means they cannot actively market or advertise in the EU. However, Monneo has sought out expert legal advice to clarify this issue, because facilitating and simplifying access to European and international IBANs underpins the services we offer. According to all of the legal opinions we’ve obtained, there is no restriction or limitation, neither under UK regulations nor under EU regulations and PSD2, for UK payment institutions to provide services to EU clients if those clients seek these services.
Out of Chaos, Opportunities Arise
On the positive side, the many challenges arising from Covid-19 and the shift to remote working is actually encouraging many fintech players to embrace the spirit of collaboration. The pandemic has opened up resource pools, with industry leaders are calling each other to share experiences and discuss issues.
Although the pandemic has changed the way businesses engage with each other, the industry has adapted to the new reality very quickly. Many businesses, including our online merchant clients, have benefitted from the mass consumer switch to online buying. This is driving the use of innovative solutions for marketing and sales channels, and increasing deployment of automated solutions for client onboarding and process optimisation.
Pandemic-driven lockdowns meant in-person attendance at trade shows was not possible, and this was one of the main ways businesses interacted with potential clients. Even as the world comes out of lockdown and businesses embrace face-to-face interaction again, we can expect these cutting-edge and innovative solutions to be deployed more in client acquisition.