times more in the 1,200 page document than "financial services"—preventing a smooth transition for UK fintechs and imposing new pain points.
As of January 1, UK fintechs can no longer passport their national licenses to other EU countries. Passporting rights allow EU-based firms that are authorized in any EU or European Economic Area state to trade freely in any other member state with minimal additional authorization.
In the long term, the UK's departure from the EU could lead to increasing regulatory fragmentation as the jurisdictions go their separate ways in shaping fintech strategies. In addition to the TCA, the parties have a nonbinding Joint Declaration to cooperate on financial regulation matters, which will be accentuated by a memorandum of understanding signed in March 2021. However, the MoU alone will not prevent regulatory divergence in future, with open banking being a case in point.
framework—presenting an additional challenge to UK fintechs looking to expand operations across Europe.Join other Insider Intelligence clients who receive this Briefing, along with other Fintech forecasts, briefings, charts, and research reports to their inboxes each day.