Fintech After Brexit: What’s New and What to Expect
POSTED ON: 26 Mar, 2021
Historically, digital banking in the UK has been on the leading edge of innovation in the fintech scene. Top economic service, a single market with the EU, and a deep international talent pool, — it all made building financial services in the UK a no-brainer. But then, Brexit came along.
While in most spheres of life, Brexit ended up with all sorts of deals between the UK and EU signed just in time, the financial sector lost a substantial part of the market that previously was allowed to operate in under the British EMI license.
How Brexit Affected the EU Fintech
UK-based Fintech after Brexit is now restricted to the domestic market. Holders of the UK’s EMI licenses and their customers can’t freely trade with the EU citizen and businesses, and all transactions above a certain amount are now subject to financial control. To go with that, customers of the UK fintech after Brexit are often required to exchange their euro transactions to GBP, and lose funds on conversions.
This is also applicable the other way around: European EMI license holders that now lack permissions to operate in the UK, have lost a large customer base in one of the world’s major financial hubs and a giant fintech destination.
Why Move or Expand Fintech after Brexit?
Moving to EU countries, or working with providers that have appropriate financial licenses there, allows for access to the vast European market with millions of customers. Digital banking institutions that can operate their fintech after Brexit within Europe, remain under virtually the same rules as before and can maintain their European customer base without any changes.
The EU-licensed fintech after Brexit can still issue electronic money in several currencies, offer European banking accounts, execute all sorts of payments, emit and operate banking cards. This makes the EU an essential Fintech destination for UK-based businesses that would like to keep their customer base after all.
Why is Lithuania Your Number One Fintech Destination
A considerable number of UK’s fintech after Brexit are moving to Vilnius in their attempts to keep the EU customers. Only in the few upcoming months, Lithuania, which has issued 120 EMI licenses up to date, expects to issue 140 more, mostly to the UK’s fintech after Brexit.
All these relocations and expansions are a natural response of fintech after Brexit to the changes on the European scene. Vilnius, in its turn, as a financial and government hub of Lithuania, is an obvious fintech destination for the fintech after Brexit.
How Does Lithuania Respond to Relocation?
In response to the UK financial market moving its fintech after Brexit towards Lithuania, the local government has implemented a number of steps to simplify the application for an EMI license and running a fintech business in Lithuania.
For example, the Bank of Lithuania increased the AML/CFT responsibilities of the banking institutions so that they can do all the checks faster themselves, rather than sending some of the info to the Bank of Lithuania and other government institutions, in order to process new account applications much faster. Or, the supervisory financial statements are now collected yearly instead of quarterly, to make the operations of fintech after Brexit faster, more flexible, and less regulated.
How to Set it Up with SatchelPay
SatchelPay provides fintech services right in the heart of Europe’s new fintech destination and offers a variety of services to other fintech after Brexit. An extensive experience of SatchelPay allows registering, launching, and operating a European fintech after Brexit, for a fraction of cost and in just a couple of weeks.
European customers that want to continue to be served by your business, can open a checking account within your branded banking application, built and operated entirely by SatchelPay’s white label product division. For your customers it means that your fintech after Brexit is still there, for you it means that you are operating right away, using SatchelPay’s license and backbone.