Amid Brexit and Covid fears, fintechs optimistic about international expansion

Wednesday 9 September 2020 09:46 CET | News

Over two thirds of fintechs plan to expand internationally in next 18 months according to a survey of fintech executives by Newfound.

However, global expansion specialists Newfound, has revealed that the economic fallout from Brexit and the Covid-19 pandemic is making fintechs more cautious about international expansion, according to a survey of 50 fintech executives. Despite these fears, the majority of fintechs plan to expand internationally in the next 18 months citing diversifying revenue streams, access to talent, and ‘winning’ strategic hubs as key drivers.

Key study findings include:

  • Brexit and Covid-19 pandemic may slow fintech expansion: With the transition period coming to an end on the 31st of December 2020, fintech executives are apprehensive about Brexit uncertainty. 50% said they would be sceptical to set up a base in the UK because of Brexit. More widely, fintech executives cite lack of access to talent (80%), limited availability of funding (80%) and the macroeconomic situation caused by Covid (60%) as the biggest inhibitors of market expansion.
  • Despite fears, fintechs are set on international expansion: 68% of fintech executives expect to expand into new markets in the next 18 months, with nearly one third ‘ready to expand now and actively seeking growth opportunities’. In fact, just 2% said they wouldn’t expand anytime soon. And more than a quarter (26%) are looking to launch in new markets next year. Looking at fintech expansion to the UK, 52% of executives expect growth to be ‘modest’ with a gradual increase over the next 12 months. Only 10% predicted a fall in firms expanding to Europe’s biggest fintech market.
  • Fintechs need more guidance and support: Fintechs would like the UK government to do more to help fintechs expand and attract fintech firms to the UK. Two-thirds of fintechs (66%) said that the government could do more to support international firms. And 42% said that tax breaks and support programmes that make it easier to plan expansion, could help make the UK a more attractive destination for global fintechs.

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Keywords: Brexit, covid, payments , banking, talent, study, Newfound, fintechs, international expansion
Categories: Banking & Fintech
Countries: United Kingdom
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Banking & Fintech

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