The U.K.’s Financial Conduct Authority (FCA) has said that the country’s fintech sector has recovered after Britain’s vote to leave the European Union (EU) saw sector funding drop last year.
In a report from Reuters, Chris Woolard, director of strategy and competition at the FCA, said at an Innovate Finance fintech conference, that:
In the immediate aftermath of the EU referendum there was a concern that we would see the number of innovative firms wanting to operate in the UK fall.
Last June, after the Brexit vote, there were fears that London would lose its top spot to contenders such as Paris. Fellow European countries such as Germany and Ireland were also reported to be competing against one another to oust London from the number one position.
Fintech funding in the U.K. had dropped significantly too, which further played to the fears circulating Brexit and what it would do to the country once the U.K. officially leaves the EU in two years time. In February, it was reported that investment in the fintech sector in the U.K. had fallen in 2016 to 33.7 percent while dominate markets in China and the U.S. continued to rise.
Not only that, but the fact that the U.K. has been struggling to fill fintech jobs highlights that the country has its work cut out to do more for the sector.
To boost fintech startups in the U.K., the FCA set up its Project Innovate in October 2014 to provide advice to companies on what regulations they need to adhere to as part of its regulatory sandbox. In the first year, 177 businesses were assessed with 40 of them approved.
According to Reuters, Woolard said that in the run-up to the referendum, the FCA received 264 requests for regulatory support from companies. Since then that number has increased to 321.
Last September, the FCA accepted 24 applicants out of 69 to take part in its first regulatory sandbox. Now, according to Woolard, the U.K. regulator has received 77 applications for its second wave, of which 31 are expected to be accepted.
Despite the initial setback due to the Brexit result, it appears that the U.K. is making a comeback to where it once was. With global standards a necessary requirement it is hoped that the U.K. can set the benchmark for companies seeking regulatory advice instead of turning their attention to an alternative source that may not have the companies best interests in mind.
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