“[The UK] can’t have its cake and eat it with Brexit”, according to Chris Skinner, chair of the Financial Services Club.
Speaking at this year's annual ISITC Europe meeting in London, Skinner explained that the UK and the financial services industry still had their “fudge”, meaning he thought the industry would face “a lot of fudging over the next five years”.
Kay Swinburne, Member of the European Parliament for the UK's Conservative Party and vice chair of the Economic and Monetary Affairs Committee, agreed.
She said: “Brexit is the most complex thing in financial service, on paper it looks simple, but put into practise, it will be incredibly difficult. Each and every sector is going to have to reassess what they do.”
Michael Cooper, chief technology officer of global banking and financial markets at BT, spoke of Brexit as unprecedented, explaining, “no one has ever left the EU27, many nations regret it [Brexit], but they realise we have to work together”.
In the same vein, Swinburne affirmed her faith in Michel Barnier, Europe's chief Brexit negotiator. She said: “He knows what he’s doing for financial services, he’s aware of how important London is [as a financial hub]."
She added that Brexit is the “biggest catalyst for change and because of this, the financial services need to embrace all incumbents” and must see “how they can leap-frog to the next level rather than staying the same”. She also explained that educating politicians about the financial industry is also imperative.
In terms of asset servicing, Cooper said the industry should “drive forward to innovate” and proposed that the “success or failure of technology will be probably be influenced by Brexit”, particularly in the next five years.
Rebecca Healey, lead analyst of financial market structure at Liquidnet, said: “We do need to get a legal agreement about data, how we share it is critical. We [as an industry], have been snowed under with the second Markets in Financial Instruments Directive (MIFID II) — it's distracted us from Brexit.”
Swinburne also touched on MiFID II in terms of Brexit, explaining that in the lead up to the UK leaving the EU, the other 26 Member States are “preempting their own [financial service] vulnerabilities in this midst of change”.
She said: “MiFID II has been set up to be neutral and has no difference to entity for asset classes competition within firms who happen to be based in certain countries.”
Swinburne concluded: “Competition is in the heart of MiFID II. Brits have always pushed for open markets and competition. MiFID II may be very different in terms of competition.”
She predicted in the future, MiFID III, when it is established, “may be more protectionist”.
