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Brexit yet to dampen fintech recruitment in London

Fintechs are still recruiting in London as large banks start to make plans to move staff to EU countries

Despite fears over Brexit, London is still seen as the place to be in Europe for people developing digital technologies for the finance sector.

Research from German recruitment website Joblift shows there has been, on average, a 5% increase in financial technology (fintech) jobs in the UK every month from April 2016 to April 2017, with London accounting for the most.

In contrast, Berlin, which is a threat to London’s dominance as a fintech hub, had, on average, a 2% increase in the number of postings each month this year.

The study found that 3,370 fintech jobs were advertised directly, compared with 1,458 in Germany.

This is no surprise, as the London fintech sector is currently substantially bigger than Berlin’s, but it is a surprise to some that the rate of job growth is still higher in London.

“Berlin has been touted as London’s major competitor for the title of Europe’s fintech hub, given uncertain Brexit effects and Berlin’s expanding startup scene,” said Joblift. “However, our research shows that London trumps the German capital in both the number of jobs being posted and, more surprisingly, the rate of job market growth.”

In the UK, it is only London that packs a punch, with the second-biggest hub, Manchester, only generating 166 jobs in the same period. Meanwhile, Belfast in Northern Ireland is seeing rapid growth, with an 18% average monthly increase in job adverts over the past 12 months.

The continued recruitment by fintechs in London shows that while the big banks are already outlining plans to move operations out of the UK to ensure continued access to EU markets, fintechs are, for now at least, not losing their appetite for UK capital.

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Big banks are moving UK jobs abroad because of fears of losing their rights to sell services across Europe, known as passporting, when the UK leaves the EU. Cities such as Dublin, Paris and Frankfurt are seen as potential destinations for thousands of jobs currently based in London.

Fintech startups’ fears around Brexit are related to their continued ability to hire the right people. As the UK government has committed to ensure there is access to skills overseas post-Brexit, fintechs are likely waiting to see what happens, and could move quickly if it becomes an issue.

Investment in the UK’s fintech industry shrank last year, and research earlier this year found fintech investments in the UK in 2016 fell by almost £176m compared with 2015, but still towered above the figure in 2014. The figures from data and analytics company Fintech Global found a total of £936.5m was invested in UK fintech in 2016, with £820m of that in London. This compares with around £1,112m and £963m respectively in 2015.

EU countries investing in startup hubs

EU countries are looking to take advantage of the uncertainties over the UK’s future and are investing in startup hubs, which will provide the right environments for IT entrepreneurs in terms of access to skills and customer bases.

For example, in the past five years, Sweden has attracted the highest number of fintech investments per capita in Europe, and its capital Stockholm has branded itself a fintech hotspot.

Then there is the Netherlands, with its capital city Amsterdam already a major startup hub. Amsterdam’s city government promotes the quality of life in the city and its potential as a gateway to Europe to attract talented IT entrepreneurs to its IT startup community.

But investment is still being made in the UK. For example, Barclays Bank has opened a workspace in London where fintech startups can turn their ideas into software to solve real business challenges.

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