Brexit has created havoc for Britons living in the EU. Thousands have had their bank accounts cancelled. Fintechs were quick to step up and provide solutions. Could that also be a chance for Liechtenstein-based fintechs?
Brexit has been a major challenge for the European Union, and it still is. It puts the European idea in question and raises concerns about the stability of the bloc. Liechtenstein is not a member of the European Union, but it is a member of the European Economic Area (EEA). Also, being located right in the heart of Europe and surrounded by EU member countries, anything happening in the EU undoubtedly also affects Liechtenstein.
And so does Brexit. However, it also brings opportunities. As part of the Brexit fall-out, British expatriates in EU countries will have their UK bank accounts closed. Considering that about 1.3m Britons live in the EU, that will generate significant demand for new accounts. Where will they all go?
Fintechs provide quick fixes
The reason why banking becomes more difficult for Britons living in the EU is that the flexible passporting rights under which EU-based banks operate all across the union will no longer apply to British banks. UK banks can continue to do business in the European Economic Area (EEA), but they will typically need a national banking licence for each country of operation. That doesn’t mean all bank accounts get cancelled, as the impact varies depending on the country. However, many Britons already got a cancellation notice. For example, in the Netherlands, the Dutch national bank has required that UK accounts of resident Britons must be closed.
Where will they go? Challenger banks have been quick to provide solutions. Revolut said, “Since the middle of last year, we have seen an increase in the number of British expats living abroad signing up for a Revolut account.” Likewise, TransferWise has added around 1m new accounts between July and December, citing Brexit as one of “a number of different factors”.
An opportunity for Liechtenstein’s fintechs?
Issues with UK-EU banking could also provide an opportunity for Liechtenstein-based fintechs. The small country has in the past been fast to amend rules to accommodate new circumstances. It’s home to a vast financial industry and modern fintechs that provide first-class services. Appealing to UK citizens based in Europe and structuring the right products for their need could be an opportunity Liechtenstein-based Fintechs may want to explore.
Trouble in the EU is mostly also bad for Liechtenstein, as it worsens Europe’s economic strength. However, it also provides opportunities for Liechtenstein-based businesses to close the gap and attract those disadvantaged by European problems – individuals, businesses, and investors alike. That’s one of Liechtenstein’s unique strengths.