London’s status as a global financial technology hub could be undermined if Brexit complicates the ability of companies to operate across Europe and access to talent becomes difficult, the co-founder of an international online money transfer platform warned Tuesday.
Taavet Hinrikus, CEO of London-based unicorn TransferWise told CNBC on the sidelines of the World Economic Forum’s annual June meeting in Dalian that a couple of factors in particular were important to financial technology companies such as his.
“It’s really two things which are important to TransferWise and all of the high-growing companies in tech and fintech,” said Hinrikus.
First is a concept called passporting that enables a firm authorized in an European Economic Area (EEA) state to carry on permitted activities in any other EEA state by either exercising the right of establishment or providing cross-border services.
In the case of TransferWise, and fintech companies more broadly, this means a license given by a regulator in one of the countries in the region can be used in other EEA areas. “One regulator gives you access to 500 million people all over Europe,” said Hinrikus. “With Brexit, (the) U.K. will most likely lose passporting.”
This implies a firm like TransferWise may have to apply for separate licenses in Europe and the U.K.
The other concern among firms is the ability to hire talented workers. Hinrikus explained that one of the reasons why London is a fintech hub is because of the great number of skilled people who have come to the city from all over the world.
“If it’s not possible to get people to come to London, and if existing people start moving for some reason, I think the position of London is somewhat in danger,” he said.