“London has committed suicide as a leading fintech centre”: start-ups begin planning to move from London to Berlin
The Financial Times has reported on how Berlin is poised to take over from London as Europe’s leading fintech centre. Fintech – financial technology – is that part of the financial services industry which deals with payment platforms and the like.
It quotes Jochen Siegert, chief operating officer of Traxpay, a Frankfurt-based payments platform, who tweeted: “London has committed suicide as a leading fintech centre.”
The Financial Times reports: Germany’s digital entrepreneurs are not only convinced that London is finished, but also believe they are poised to wrest its crown as Europe’s centre of fintech. This confidence is particularly strong in Berlin, the cradle of Germany’s tech industry.
Cornelia Yzer, Berlin’s economics minister, says her department has received “dozens of emails” in the past week from companies based in London considering a relocation to the German capital.
“Berlin will exploit the opportunity provided by Brexit,” she makes clear. “These companies need to be in the heart of Europe, and where is better than the capital of Europe’s strongest economy?”
Many of these fintech companies are start-ups, and if the UK loses access to the European single market, then London will shrink as a global banking centre and investment in those start-ups will stop.
Berlin is already home to very many start-ups in the vanguard of the fintech revolution. Its relatively affordable rent, laid-back style, vibrant nightlife and cosmopolitan outlook has drawn web entrepreneurs from all round the world, but particularly from other European Union member states.
Until now, London has been the leader in this sector because the large global banks are headquartered there, using the UK as a gateway to “passport” their services to the European single market. Those banks will not retain their “passporting” rights if/when the United Kingdom leaves the European Union.
“Why would you want to stay in the UK when it’s so insecure?” says Ramin Niroumand, co-founder of Finleap, a Berlin-based fintech company builder. “It doesn’t have the euro, so there’s a currency issue, and now you have this passporting problem.”
Britain’s departure from the European Union will also mean that London-based fintech start-ups will be unable to recruit IT staff from all over Europe, which is essential. “If you have constraints on attracting international talent, you will lose out against cities like Berlin,” notes Marc Bernegger, a Swiss-based fintech investor.
