With the big banks staying out of the fight, there is a huge opportunity to shape the financial sector’s EU conversation
Normally the prospect of game-changing political and economic upheaval sparks loads of punditry. But less than a month from the EU referendum, the UK’s FinTech sector has been oddly quiet.
Maybe its the fact that our big banks have decided to stand clear of the fracas — going so far as to direct staff to keep quiet on the issue. Or maybe it’s all become too much of an in-fight between wings of the Conservative Party and no one wants to be seen taking sides. Perhaps we accepted the initial polls giving Remain a small edge and assumed that would continue.
Whatever the reason, FinTech companies face significant changes to the way they operate in the event of a Brexit, or a big platform for affecting EU financial services reform in the event that we stay in. None of that is being adequately addressed by the hyperbolic and reductive campaigns being run by both Leave and Remain. A huge vacuum of informed opinion is sat there waiting to be filled.
By keeping quiet, FinTechs are missing a sterling chance to position themselves as advocates for the industry, for customers, for consumers; and to be seen as businesses with a long-term stake in the life of both economy and country.
There is still time to formulate a media-savvy Brexit PoV. Media interest in the referendum will only intensify in the final weeks. But you need to act.
Start by understanding that there are actually three clear positions you can take as a company:
- We're for Brexit
- We're for staying In
- A pox on both your houses
Here’s a messaging primer for each:
We’re for Brexit.
The pro-Leave arguments have tended to focus on generalities like greater political independence rather than specific benefits to specific industries, or specific pains that a Brexit would eliminate. Companies with a pro-Brexit point-of-view would be well advised to focus on particular instances of good and bad in both cases, and keep the focus on benefits.
The Leave and Remain campaigns are using FEAR as the primary messaging platform, but fear is harder to employ as a motivator when one of the options is to ‘leave things pretty much as they are.’
Because of that, any message of hope and uplift for the FinTech sector attached to leaving the EU will help differentiate you.
For example, you could look at the 2015 EU directive which actually lowered deposit protections for UK citizens, and advocate for Leave on the basis of better banking for consumers. Our analysis of the coverage to date suggests that taking an EU position against regulatory over-reach tends to gain press.
Another angle is one suggested recently by Ernst & Young that leaving the EU would actually drive more opportunity for UK FinTech innovation. With the prospect of leaving and the adjustments it would entail, innovation would likely fall even lower down the agenda at the big banks -- opening the door for even more disruption from startups.
You could also consider turning potential negatives into positives. What if, as some have said, the pound would be devalued post-Brexit? The flip side of that could mean more foreign investment to UK FinTech, even kick-starting an export boom.
We’re against Brexit
FEAR is a more effective messaging platform for the Remain side. Offer anyone a choice between a known and an unknown, ‘known’ will often be the safest bet.
Relying on fear however makes it harder to cut through what others are already saying. As in the pro-Brexit situation, to gain coverage FinTechs will need to be specific about the negatives or positives if The Big Change does occur.
One fear you might build on is the possibility of even more FinTech regulation after a breakup. In order to continue trading with the EU post-Brexit the UK would, like Norway and Switzerland, be compelled to negotiate parallel financial services agreements that more or less mimic the EU regulatory regimes for each FS vertical.
So Instead of one harmonised MiFID or Solvency II for all EU markets, the UK would need to build new national regimes and ensure they are in line with their equivalent EU rulebooks, as well as the national enabling legislation implemented across all EU states.
There could also be a long period of uncertainty while each new UK regulatory bundle is being negotiated.
Business hates uncertainty and of course the Remain side is hammering this generic economic message heavily. For FinTechs trying to sell into EU markets, having a huge question mark over the legality of a sale from a UK-based entity would hardly be expected to drive customer growth.
Another consequence could be the flight of EU tech talent from the City, as immigration status becomes clouded for EU nationals without UK passports or Indefinite Leave. The battle to find and keep talent is an ongoing one in UK FinTech, and that fear is bound to generate ink if the argument is articulated well for the press.
We think the whole Brexit debate is a needless distraction from more pressing issues
The ‘pox on both your houses’ position says that love or hate the EU, the referendum is un-necessary and/or the timing couldn’t be worse. By taking the contrarian point-of-view you could arguably shine more light on a specific issue that is impeding your business or seen as highly painful for the sector, your customers, or end consumers.
It’s harder to cite specific instances here because each FinTech solution and target customer will have their own bespoke use cases and pain points. Start by asking yourself what’s currently keeping your customers up at night, and whether any of those concerns are being addressed by the pro- and anti-EU arguments.
Regardless of which position you lean toward, time is tight and you need to be lighting up news desks with comment and offering your spokespeople for interview -- now.
But before you hit send …
Do consider what customers and stakeholders will make of your position, and have a hard look at any potential disharmonies that a company Brexit PoV could create.
There is no doubt in my mind that the promotional, reputational, and even marketing advantages of leveraging the Brexit debate to position yourself as a FinTech thought leader, can amplify your position in the industry.
Calibrating what you believe with the sensitivities of customers however is a bigger ask – one best led by the seniors on your in-house communications team, or with the help of a seasoned PR agency.