THE UK’S fintech community will need “strong guidance” to cope with the challenges of post-Brexit regulation, accountants have warned.
A new report by the Association of Chartered Certified Accountants (ACCA) has praised the innovation and potential of the UK’s fintech sector, but advised that changing regulation would pose a serious threat to the development of the sector, particularly in the wake of the Brexit negotiations.
“The UK’s fintech sector currently employs more than 66,000 people, with approximately a third coming from Europe,” said Anthony Walters, ACCA’s head of policy for Western Europe.
“Inevitably the potential burden of securing work permits for highly skilled individuals in a dynamic industry creates significant uncertainty, as does the regulatory headache which would be created by the loss of passporting rights for UK-based banks operating in the EU.”
The ACCA added that younger fintech firms would require “strong guidance against regulatory hurdles” if they are to survive in the future.
Elsewhere in the report – titled ‘Fintech – Transforming Finance’, the ACCA identified the emerging ‘regtech’ (regulation technology) sector as a particularly valuable addition to the financial services community. Many large banking institutions have already begun to integrate this technology into their day-to-day operations.
“While the scale of transformation is hard to predict, there is no doubt that the impact of fintech across the traditional functions of finance has been significant,” said Faye Chua, head of business insights at ACCA.
“Major banking institutions are already responding through large-scale research and investment in the face of competition from start-up challengers. This is good news for consumers and firms, as the explosion of choice in a traditionally conservative industry offers a range of new possibilities of doing business based around their bespoke needs.”