Chris Skinner's blog

Shaping the future of finance

The best #Brexit insights including #Fintech, #Blockchain and more

Chris Skinner Author Avatar

Well, I can’t go on and on and on about Britain’s decision to leave the EU, but it would be remiss of me to not highlight a few insights that popped up yesterday.

First, there’s probably the best insight I’ve read into why we voted to Leave in The Guardian:

“If you’ve got money, you vote in,” she said, with a bracing certainty. “If you haven’t got money, you vote out.” We were in Collyhurst, the hard-pressed neighbourhood on the northern edge of Manchester city centre last Wednesday, and I had yet to find a remain voter. The woman I was talking to spoke of the lack of a local park, or playground, and her sense that all the good stuff went to the regenerated wonderland of big city Manchester, 10 minutes down the road … Brexit is the consequence of the economic bargain struck in the early 1980s, whereby we waved goodbye to the security and certainties of the postwar settlement, and were given instead an economic model that has just about served the most populous parts of the country, while leaving too much of the rest to anxiously decline. Look at the map of those results, and that huge island of “in” voting in London and the south-east; or those jaw-dropping vote-shares for remain in the centre of the capital: 69% in Tory Kensington and Chelsea; 75% in Camden; 78% in Hackney, contrasted with comparable shares for leave in such places as Great Yarmouth (71%), Castle Point in Essex (73%), and Redcar and Cleveland (66%). Here is a country so imbalanced it has effectively fallen over.

The summary resonates with my conversation in the City last month, where my colleague felt that Cameron and crew were completely disconnected from the voters.  The poorest in the country – those suffering from austerity, benefits cuts and disenfranchised from losing work and job opportunities – roared against the system.  And won.

Some felt this was a foolhardy vote to take to the public in the first place, but Cameron only allowed it in order to placate the backbenchers in his own party when it came to the rise of UKIP (the UK Independence Party).   The thing that David Cameron had not calculated in his plan was Borish Johnson.

Borish was purely using this campaign and this opportunity to progress his own political career and hey, he won.  But he's not gung-ho about it.  In fact, he's already being conciliatory:

I cannot stress too much that Britain is part of Europe, and always will be. There will still be intense and intensifying European cooperation and partnership in a huge number of fields: the arts, the sciences, the universities, and on improving the environment. EU citizens living in this country will have their rights fully protected, and the same goes for British citizens living in the EU … the only change – and it will not come in any great rush – is that the UK will extricate itself from the EU’s extraordinary and opaque system of legislation: the vast and growing corpus of law enacted by a European Court of Justice from which there can be no appeal. This will bring not threats, but golden opportunities for this country – to pass laws and set taxes according to the needs of the UK. 

Was this an unexpected victory?  Maybe, but it was no Black Swan.  When you have a vote, especially one that is close, you know you might get the wrong result and Nick Clegg, the former leader of the Liberal Democrat Party, wrote a very insightful piece in the i News last Wednesday, the day before the Vote:

Imagine how you will feel on 24 June?  Having woken on Friday to the news we’re quitting the EU, you will assume that those who persuaded you to take that leap of faith have a plan about what to do next. So imagine how dismayed you will feel when you discover, instead, that Nigel Farage, Michael Gove and Boris Johnson can’t agree among themselves what life outside the EU looks like? They may be united by a ferocious loathing of the EU, but they have no shared plan for the future.

Yep.  His article goes on to predict all the other fall-out post the Leave vote, including Nicola Sturgeon calling for Scottish Independence, Donald Trump beaming all over with the triumph of independence and the cold shoulder from overseas.  The key point here is: what’s the plan?  There isn’t one.   Like England’s football team, there is just no leadership and no plan after the match went the wrong way.


The BBC makes an attempt to outline what the plan might be, and it falls into five – yes FIVE – different variations.

  1. The Norway model
  • Member of European Economic Area, full access to single market, obliged to make a financial contribution and accept majority of EU laws, free movement applies as it does in the EU
  1. The Switzerland model
  • Member of the European Free Trade Association but not the EEA, access to EU market governed by series of bilateral agreements, covers some but not all areas of trade, also makes a financial contribution but smaller than Norway's, doesn't have a general duty to apply EU laws but does have to implement some EU regulations to enable trade, free movement applies
  1. The Turkey model
  • Customs union with the EU, meaning no tariffs or quotas on industrial goods exported to EU countries, has to apply EU's external tariff on goods imported from outside the EU
  1. The Canada option
  • Ceta free trade deal with the EU has yet to come into force, gets rid of most tariffs on goods, but excludes some food items and services, and stipulates need to prove where goods are made
  1. The Singapore and Hong Kong approach
  • City states do not impose import or export tariffs at all - a unilateral free trade approach

Most argue that the EEA Model, which all member states of Europe are part of already, will work.  The Norway Model.  But the Leave campaign won on the basis of restricting the free movement of people which is a central foundation of EEA and the EU.  So Norway with immigration controls is the plan.  That won’t work.  There is no plan.

This is why the Financial Times summarised the impact on our banking industry best when dealing with the resignation of Jonathan Hill, the EU Commissioner for Financial Services.

Lord Hill “said Britain now faced being forced to abide by European banking rules shaped in Berlin, Paris and Frankfurt on priorities dominated by the Eurozone.  ‘The voices that would be present at the table without Britain there — the voice of the French financial services industry, German industry, Dutch, Irish — will clearly be heard,’ Lord Hill said.

Erik Nielsen, chief economist at UniCredit, said the resignation of the commissioner meant that ‘whatever influence the UK had in the EU is completely gone as of this weekend’.

Lord Hill warned that it was unlikely British-based banks would be able to preserve ‘passport’ rights allowing them to serve clients across the bloc, not least because these required acceptance by the UK of free movement of people from the EU. ‘I can’t see that flying given the weight of immigration as an issue in the referendum debate,’ he said.

Other senior officials in Brussels said they believed passporting for UK-based institutions was ‘dead’, a blow to London where more than a third of trading in euro-denominated derivatives currently takes place. Several big banks, including HSBCJPMorgan Chase and Goldman Sachs have begun preparations for a potential shift of some operations to Dublin, Paris and Frankfurt.”

I blogged yesterday that I hope we don’t lose the passporting rights and argued the case on CNBC yesterday morning:

But yes, it is a very real possibility.  Meanwhile, three blogs about the impact of Brexit on the Fintech outlook caught my eye.   Preston Byrne, COO of Eris Industries, believes that the EEA Norwegian model with free movement of people is the future way to go:

The EEA option de-risks Brexit. It allows British business to thrive, and allows European and global business to deal with the whole of Europe - and the wider world - from their current bases in London.

There are very sound business reasons to support this positon. As an information-age start-up with a distributed workforce, when we started up in the UK, the UK’s membership of the single market made it easy for us to expand our operations on the continent with very little hassle. It’s always hard to find the right people. However, being able to hire in Germany, Belgium, and elsewhere meant we always managed to get our hands on the right candidates to help our business grow and expand into the world-leading blockchain technology provider we are today.

We and our employees benefit from the four freedoms, especially those of free movement of labour and capital. If these freedoms are taken away, new, innovative businesses that follow in our footsteps will be hamstrung by stricter immigration restrictions, tax regulations, and compliance obligations, as well as reduced availability of investor funds.

Freedom of movement is really the most critical piece. With it we can hire the best people Europe has to offer, and deploy them where we need them, when we need them, for as long as we need them to be there. Without it, our compliance costs would go up and we simply wouldn’t be able to get the right talent - because there simply isn’t enough of it concentrated in any one place in the European Economic Area. This includes London, which (as anyone in tech will tell you) is simply not the hub of global tech talent it fancies itself to be.

So you see, Brexiteers, freedom of movement is not merely about holidays in the south of France or a shorter queue at the UK border. To be blunt, without freedom of movement in the EU/EEA, British firms cannot compete effectively in global markets. The UK’s talent pool has proven far too small for our requirements.

I hear you Preston, but the EEA Model with free movement of peoples won’t wash, as the Leave campaign was soundly based upon restricting borders through immigration controls.  I expect they may well reverse position on this, as politicians so often do, but it will further disenfranchise the country and cause the foreign haters to hate more.

Coindesk looked at the impact Leave has on Blockchain firms:

Friendly regulatory policies were rapidly turning London into a capital for blockchain innovation, that is until last week’s decision by the UK to leave the European Union left some wondering if this market position will be impacted.

From establishing a safe zone for blockchain firms to passing a measure that exempted bitcoin from value-added tax, the nation had arguably helped pave the way for measures currently under consideration in the EU while putting pressure on regulators in the US to rethink their policies on FinTech innovation.

If nothing else, the EU referendum, nicknamed the 'Brexit', has brought an air of uncertainty into an environment that had long been lauded by the technology's advocates as forward-thinking and permissive.

Prior to last week's vote, many European companies had taken to incorporating in the UK to "avoid red tape in their home countries", according to Wardynski & Partners attorney and digital currency specialist Jacek Czarnecki. But after the UK's exit from the EU, he argued its appeal could decrease.

Czarnecki told CoinDesk: "At least in short term London will lose as a candidate for [Europe's] digital currency capital. They still have much to offer, but considerably less than before and moreover with a large uncertainty as to the future."

If the UK’s vote puts its status as a digital currency leader among European nations in jeopardy, other cities are poised to take over.

Czarnecki said Luxembourg, Berlin and Stockholm are all positioned to become stating points of digital currency commerce in Europe, while Rik Willard of blockchain consultancy firm Agentic Group, adds Zurich to the list of cities that have proven attractive for new industry companies.

Yes, Brexit throws the UK’s FinTech leadership into question, with Berlin already seeking to woo our best talent away:

Cordelia Yzer was on the phone.  The Berlin Senator for Economics and Technology was not chatting to fellow politicians, but with start-ups and global funds, who, in the wake of Brexit, are now considering Germany's capital as their base.   "Those companies who have headquarters in London are aware that they need to be in the EU," she says. "We had competition in the last two or three years between London and Berlin. I am convinced that more funds will now make the decision in favour of Berlin."

Maybe Simon Taylor of 11:FS lays out a more realistic view, and one that I support.  When asked whether London will lost its’ position as the global Fintech Hub, he states:

If there’s one thing I think highly unlikely it’s this. There is a concentration of talent based in London that I believe is a mix of tech and former banking talent that chose London for more reasons than it being a good place at a point in time. The access to universities, to policy makers and to the local regulator (FCA) will all continue.

Hmmm ….  It remains to be seen.  Whatever your view, this is a great period of uncertainty and no-one likes uncertainty.  But hey, the only certainties in life are death and taxes.

Meanwhile, to summarise what we are really like, I revert to the words of George Orwell.  Orwell wrote The Lion and the Unicorn in 1941, and described England as follows:

“[England] resembles a family, a rather stuffy Victorian family, with not many black sheep in it but with all its cupboards bursting with skeletons. It has rich relations who have to be kowtowed to and poor relations who are horribly sat upon, and there is a deep conspiracy of silence about the source of the family income. It is a family in which the young are generally thwarted and most of the power is in the hands of irresponsible uncles and bedridden aunts ... A family with the wrong members in control – that, perhaps, is as near as one can come to describing England in a phrase.”

Thanks to The Guardian for remembering this.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

What is the future?

Learn more

Learn more about Chris

About Chris Skinner

The Past, Present And Future Of Banking, Finance And Technology

Fintech expert Chris Skinner: countries need digital transformation to remain competitive

Join me on Linkedin

Follow Me on X!

Hire Chris Skinner for dinners, workshops and more

Learn directly from from one of the most influential people in technology, gain insights from the world's most innovative companies, and build a global network.

Chris’s latest book

Chris Skinner’s ‘Digital For Good’ Book Launch Event – CFTE

Top 50 Global Thought Leaders and Influencers on FinTech 2023

Chris Skinner
Commentator, CEO of The Finanser and best-selling author at The Finanser

Thinkers360 Thought Leader

Contact Me

Global Awards

Lifetime Achievement Award

Global 100 - 2024 Winner

Chris Skinner - Financial Markets Advisor of the Year - The Finanser - UK 2023

Best Financial Markets Advisor of the Year 2023

30 Best Regtech Blogs and Websites 2023

Kids creating the future bank | TEDxAthens

Captain Cake and the Candy Crew

Captain Cake Winner of a Golden Mom’s Choice Award


Alex at the Financial Services

Gaping Void's Hugh MacLeod worked with the Finanser