Staff recruitment
First off, Brexit poses a real challenge from a staff recruitment point of view. Many workers in the city of London are from European countries: in fact, 18% of them are from the EEA. While they can work without visa applications now, financial institutions may find after Brexit that they have to carry out a whole host of visa sponsorships in order to get talent in – which could in turn lead to reduced global recruitment.
Rights and permissions
Currently, financial services firms are able to operate in both the European Economic Area and Britain with relative ease thanks to an agreement known as “passporting”. The main benefit of this, of course, is that each firm doesn’t have to apply for regulatory approval in each of the European countries in which it operates. However, with passporting set to end, firms may have to act fast by applying for these within the three year post-Brexit grace period offered by the government – or face losing the right to operate here altogether.
A dip in value?
More broadly, however, Brexit may well cause other financial landscape alterations. Take the risk of a drop in currency: this has already happened at several key points during the Brexit process, and it’s unlikely to stop now. Just recently, the cancellation of a parliamentary vote on the deal that was agreed to with Europe led to the pound plummeting over 1.5% at one stage. If there is a large-scale drop in the performance of the pound, many forex firms may find themselves with a changed landscape to contend with – and the same goes for many other financial markets too. In some of the most pessimistic scenarios, the possibility of a recession taking place has been suggested by some commentators – which could well hit the finance industry hardest.
In the age of Brexit, nothing much is certain. All sorts of industries are having to think about how they’ll get their act together in the face of Britain leaving Europe – and the financial sector is no exception. From the ability of firms to “passport” to the value of the currency, the financial landscape is facing the real possibility of change, and it’s wise for all professionals in this field to think twice about how different things might be in a year or even just a few months from now.
Find out more about the possible impacts of Brexit for finance professionals in our whitepaper