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June 30, 2016updated 04 Apr 2017 3:58pm

Brexit ‘damaging’ for the fintech sector

While financial and political analysts continue to wrack their brains on what could happen to the UK’s big banks following Brexit, there are also repercussions for the country’s fintech sector. Tom Blomfield, CEO of Mondo, believes that ‘Brexit is really damaging, especially for the fintech sector’.

By Patrick Brusnahan

While financial and political analysts continue to wrack their brains on what could happen to the UK’s big banks following Brexit, there are also repercussions for the country’s fintech sector. Tom Blomfield, CEO of Mondo, believes that ‘Brexit is really damaging, especially for the fintech sector’.

Speaking exclusively, Blomfield says: "First, start-up investors are being a lot more cautious because of the huge uncertainty that it has created.

"Second, financial passporting rules meant we could previously access a market of 500 million people. That’s now potentially been reduced to 65 million.

"Third, about 25% of our staff come from EU countries. We employ literally zero people from outside the EU, since the visa requirements are too burdensome for an early stage company."

The British Banking Association’s (BBA) annual retail banking conference covered similar themes.

Eileen Burbidge, the fintech envoy for Her Majesty’s Treasury (HMT), said: "I personally believed we were better off in the EU, but if this happened two years ago, it would have been worse."

Chris Dunne, market development director at Vocalink, also believed that fintech funding could be affected. He said: "Brexit introduced uncertainty. Investors need to believe it’ll be OK. Banks are going to be completely absorbed for the next two years and fintechs need to fill the gap."

Burbidge added: "The best businesses are created despite the climate. This will improve the quality of what comes through. People will hold back in funding, but hopefully it’s temporary."

Daryl Wilkinson, CEO of DWC, said: "A lot will be retracted and there will be a lot more caution."

"I’ve already seen people have funding pulled post-Brexit," Blomfield concluded, signifying tough times ahead for the plucky UK start-up scene.

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