London has been called the financial technology (fintech) capital of the world.
Consultancy KPMG found $16 billion was invested in the United Kingdom's fintech market in the first six months of the year, outpacing China and the United States. London alone is home to 80 percent of the country's estimated 1,600 fintech companies, according to audit firm EY.
But like many industries across the U.K., the British fintech sector is facing questions about what business will look like after March 29, 2019, the day the country is set to leave the European Union. A draft divorce deal released by the U.K. government last week was met with criticism and an outbreak of resignations, putting the agreement's future in peril.
At the LendIt conference in London this week, fintech firms from start-ups to incumbents had one clear message for British Prime Minister Theresa May: let's move on with Brexit so we can get back to doing our jobs.
"Anything that impacts U.K. people who we serve will impact us," Jaidev Janardana, CEO of peer-to-peer lending firm Zopa, told CNBC from the conference on Monday. "As a business, we think it's in our interest to have certainty, to avoid huge dislocations or shocks."
'Bumpy ride' ahead
Zopa is one of London's fintech success stories. The company has issued nearly £4 billion ($5.1 billion) in loans to U.K. customers since it was launched in 2005. It brands itself as a flexible, simple and digital alternative to traditional lenders and has raised £130 million in funding to-date.
Janardana said Zopa's agile business model allowed it to tighten lending conditions the day of the Brexit referendum in 2016. He said the company has been preparing for Brexit over the last two years by monitoring and tightening lending criteria to buffer against financial shocks.
"It is possible that over the next year or so we have a slightly bumpy ride, and we want to make sure that our investors have a positive experience through that," he said. "We are only lending to those customers who can actually pay back loans."
Uncertainty is the word
Relendex is another peer-to-peer lending company that provides loans to U.K. property developers. Paul Sonabend, the firm's commercial director, said uncertainty surrounding Brexit is forcing customers to put off making investment choices.
A new CNBC survey of chief financial officers from around the world confirmed uncertainty remains a key theme for business leaders when it comes to Brexit. Nearly one third of global CFOs said they do not know what will happen with Brexit, while 16 percent predicted a no-deal scenario — where the U.K. crashes out of the bloc and has to rely on WTO trading rules.
"Nobody wants a 'hard Brexit' (taking the U.K. completely out of the EU) because that will just increase the uncertainty," Relendex's Sonabend said.
Meanwhile Raffael Johnen, CEO of German online lender Auxmoney, said investors are shifting money from the U.K. to "safe havens" like Germany.
"We've never had so much inflow, interest of investors seeking exposure to German consumers," he said.
'Never-ending quest' for talent
Beyond business uncertainty, London's fintech companies expressed concerns about finding skilled workers in a post-Brexit world. Fifty-eight percent of the U.K.'s fintech companies said attracting qualified or suitable talent is already their biggest challenge, according to a 2017 survey by EY.
Husayn Kassai is founder and CEO of London-based Onfido, a software company that helps businesses use facial ID and machine learning technology to verify customers' identities. He said finding qualified talent is a "never-ending quest."
"A big issue with Brexit is the extent to which the U.K. may be perceived as not as open to individuals coming over, and that is for us the biggest challenge," Kassai said.
London still on top
Still fintech leaders like Kassai are optimistic that London won't lose its place as a hub for innovation. The city's long history as a financial center, its innovative regulatory authority and its vibrant culture are among the reasons they said it will remain the "fintech capital of the world."
"All the ingredients, the talent is here, the capital is here, the entrepreneurs are here," said Peter Renton, founder of Lend Academy, a website that covers peer-to-peer lending.