London had crowned itself as the fintech capital of the world, since the Brexit vote however investors into the U.K.’s financial technology sector have begun pulling back. Is Asia going to be a beneficiary?
Fitch and Standard and Poors have had their say on the United Kingdom’s economic outlook by downgrading its credit rating and creditworthiness. Fintech investors likewise have been telling venture capital firms serving the sector that they want to wait and see while others have been pulling potential fintech investment altogether.
Political Stability
Fintech by its very nature is mobile as are the talented professionals who work within the segment. While nearby Europe may be an immediate beneficiary for London based start-ups, Asia must now be showing strongly on the relocation radar for financial technology innovators.
Investors desire stability and Sydney, Singapore and even Hong Kong despite the Chinese political shadow, look more stable than London where both the ruling Conservative party and the main opposition parties are currently tearing themselves apart.
Perhaps Thailand could sub contract their military to the United Kingdom to offer some short term stability.
Fintech Moves East
Asia is the worlds wealthiest region, there is ample liquidity here for innovative fintech firms to tap into. The London based venture capital firms could do worse that turn their investors resources towards the east.
Soft touch regulatory initiatives such as the «sandbox» from the Monetary Authority of Singapore (MAS) and the Australian regulator, government backed incentive schemes, low taxation environments and a strong and growing fintech eco-system across Asia can shift the centre of gravity of fintech to Asia-Pacific.
The U.K. fintech innovators however might well use all the negatives to create positive opportunities. The falling pound, Government backed tax incentives and a much less bureaucratic regime for fintech's than mainland Europe are all potential draws for the financial technology pioneers.
