Article 50 was enacted on March 29, 2017, and although the UK won't officially leave the EU until April 2019, the European financial markets hold their breath. The results of the May 2017 French presidential election indicate that France will not be joining the UK in a Brexit-like exit from the EU.
According to a recent article in bobsguide, there isn’t much concern about the GBP shaking significantly, but there is concern about how financial payment organizations can gain new opportunities and business growth out of Brexit.
Since the Brexit vote on June 23, 2016, financial services companies in the UK have experienced a 6.1% increase in costs and there has been a marked shift in risk aversion. One of the biggest fears that firms have is attracting and retaining talented employees, according to asset management software consultant Stephen Burke.
Although Brexit isn’t predicted to affect small businesses, the pound will drop slightly, and merchants facing costs in foreign currencies will be hurting the most. Lee Murphy, Owner of accountancy software Pandle predicts the pound will bounce back quickly once buyers have snapped up the currency at a lower price, but some companies may relocate so they can export to the EU without increased tariffs.
“We are now on the road to Brexit and a bumpy one it will be”, claimed Burke. Financial organizations should not, however, anticipate insurmountable problems, Burke continued, but should open themselves up to the possibility of many new opportunities. Burke recommends that payments companies have “as much flexibility as they can in their business to ensure they are optimally positioned post Brexit.”
We recommend that in order to combat the stormy waters of Brexit, financial payment organizations use this opportunity to change legacy systems and improve their processes with digital transformation. Employ merchant automation software that enables these goals:
- Cuts back-office costs to counteract cost increases and shrinking margins
- Boards more merchants with your existing staff without worrying about finding new talent
- Reduces repetitive work processes to increase productivity for current employees
- Reduces risk of human error
- Allows your underwriting team to focus on the ambivalent applications that need their attention the most
The partner you choose to assist you in your automation solution should:
- Utilize an agile methodology to remain flexible under market instability and shifting regulations
- Have the ability to scale with your business so you can explore new verticals
- Be compliant to increase risk aversion
- Utilize a risk scorecard to automate manual underwriting data entry, incorporating established company risk standards
Interested in how automated merchant onboarding software works? Download our most popular eBook, The Merchant Acquirer’s Ultimate Guide to Onboarding More Merchants.
Hammond, Alex (2017, March 30). The impact of Brexit: Fintech firms begin to speak out. bobsguide. Retrieved from http://www.bobsguide.com/guide/news/2017/Mar/30/the-impact-of-brexit-fintech-firms-begin-to-speak-out/