In response to the news that PricewaterhouseCoopers predicts the EU will sign a post-Brexit deal on financial services, Dr Timothy King, Senior Lecturer in Finance Banking and Innovation, and Director of the Centre for Quantitative Finance at Kent Business School, gave his insights, saying:
‘PwC has recently publicised its belief that the EU will sign a post-Brexit deal on financial services with the UK because of the importance of London as a financial centre.
‘Historically, the UK, especially the city of London, has been a major player in the global financial services industry. However, this dominant position was subject to a significant shock in the wake of the unanticipated result of the UK’s EU referendum result when 52% of UK voters voted to leave the EU.
‘With that decision, and several years of protracted negotiations and ongoing uncertainty regarding the future extent of the UK’s relationship with the EU, a number of major financial service providers moved staff and key operations away from London to major European financial centres in the EU including Dublin, Luxembourg and Frankfurt. This casted a shadow on the future of London and the UK as a dominant player in the global market for financial services.
‘While Brexit has undoubtedly had a major impact, in other ways the UK has been able to strengthen its position as a financial centre of global importance in the provision of financial services. This is especially true in regards to the leading role the UK is playing in the development and embracing of FinTech.
‘FinTech firms are increasingly offering new financial services either independently, or through collaborations within banks and other traditional financial institutions. Banks are also investing heavily in FinTechs. Most notably, while the UK may now have left the EU, the UK is dominant within Europe in the FinTech sector. To illustrate, while there are now over 4000 FinTech firms in Europe, 38% of these are located in the UK.
‘In summary, PwC’s prediction that the UK will sign a post-Brexit deal on financial services with the UK because of the importance of London as a financial centre seems highly credible. However, this view is not based on some nostalgic reflection of the UK and London’s dominant past in the worldwide financial and banking sector landscape. Moreover, it is based on the UK’s ability to embrace the future of financial technology and to provide an environment characterised by strong regulatory support in innovation that has allowed FinTech to thrive and the UK to underline its importance once again as a major global player in the provision of financial services.’
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