The UK's fintech industry, the country's most funded technology sector, is poised to expand internationally as UK hubs begin to sprout up in destinations such as Amsterdam.
Three UK payments fintechs have jointly chosen the Netherlands as their European base, City A.M. has learned, seeking to reinforce their offering for European customers amid regulatory uncertainty.
The chief executives of Azimo, Vitesse and Currencycloud told City A.M. the country's regulatory similarity to the UK made it an obvious choice for a European office, but London would remain their headquarters as a global centre of financial services expertise.
"The Dutch have a similar cultural outlook to the British, quite a mercantile view of the world. They're big traders and have an open economy that’s home to a lot of people all over Europe," said Michael Kent, chief executive of remittances startup Azimo.
"Culture is very important in tech companies, and we felt it would be good a fit."
Geographical closeness to the UK and reputation for fintech talent were also considered.
"We had a whole series of criteria, but the most important driver was the quality of the regulator," said Mike Laven, money transfer firm Currencycloud's chief.
"The Financial Conduct Authority in the UK is structured, it's a formal process and you know what you're dealing with, and we found that the Dutch regulator is similar in that sense. It’s a regulator who we can rely on."
Though many fintech startups may be unaffected by Brexit, the potential for licence passporting across borders to cease once the UK leaves the EU means payments firms would have to seek authorisation to operate in new geographies.
All three startups are in the process of acquiring licences from the Netherlands' central bank, with an internal timeline set to begin business in the country before the UK's exit on 29 March.
Each company is building an initial office of five or six staff in the Netherlands, with support from Dutch authorities and the UK's Department for International Trade (DIT).
"We’re doing this because of Brexit legally, but I think at the end of the day London is still London," said Phillip McGriskin, chief executive of payments startup Vitesse. "It will remain the core centre of our financial business."
"We haven’t seen any issues with talent yet, [and] we don't expect any issues. Everybody needs to see what filters through over the next 12 months."
Laven added that Currencycloud had not seen its hiring percentage of non-British workers diminish since the referendum, saying: "So far it's not a problem, there has been no change."
The UK's investment minister, Graham Stuart, told City A.M.: "The UK is Europe’s fintech capital thanks to a highly-skilled and creative workforce – the second-biggest globally after the US – as well as a fair regulatory system and ease of doing business.
"As an international economic department, the DIT is supporting UK fintechs to expand around the world – such as Azimo, Currency Cloud and Vitesse - creating further jobs and prosperity back home."