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Beyond the Brexit vote wiping several trillions off global markets, its far-reaching implications are going to be felt especially by the financial sector. Several major banks have openly taken ‘remain’ positions, primarily because Europe grants financial institutions licensed in one member state automatic operating rights in all other EU member countries.

Financial services firms benefit hugely from the resultant simplicity of doing business in the region. The European Commission refers to this rule as the ‘single passport’, a system which allows financial services operators legally established in one Member State to establish/provide their services in the other Member States without further authorisation requirements.”

The recent emergence of London as a major hub for fintech (some even argue, the most important) may seem logical in light of the concentrated financial presence in the UK capital, but actually makes sense only as long as the ‘single passport’ law stands.

Even though startups based in London have a much larger domestic market to take on than Hong Kong or Singapore, it is clearly dwarfed by the 740 million population residing across the European Union. With the UK’s leaving vote, startups that are just looking for proximity to institutions might as well set up in Switzerland, where they benefit from an equally sophisticated financial infrastructure (and a much more favourable taxation).

Also Read: Bye, bye Britain: The Brexit startup

Fintech startups looking to operate in the EU market, however, will have to find an alternative to the fertile ground that London used to provide for them. As a German, this makes me feel like ringing up a few politicians and alerting them to a one-time opportunity.

This is a tremendous chance for mature and dynamic startup ecosystems such as Berlin (or the financial hub of Frankfurt) to put their hand up and attract fintech startups to set up shop in Germany. Apart from the fact that my home country is a fervent believer in European unity – as many humorous accounts of further exit campaign names have pointed out, we will be ‘Germaining’ – it is also by far Europe’s largest market.

Sure, the German bureaucrats aren’t exactly as progressive as a fintech startup may wish for, but it would be one option. Equally interesting is Amsterdam, with its tremendous quality of life, cosmopolitan society and advanced digitisation.

Essentially, Brexit creates an opportunity for a major European city to become the next fintech capital in Europe, which is a rather pleasant side effect for the remaining EU nations (although perhaps one of the few pleasant side effects of the decision). Estonia, famous recently for its progressive E-residency scheme and vibrant tech startup scene, may also be an attractive country to consider.

One thing is for sure – fintech will keep transforming the financial industry, and Europe is a fantastic market thanks to its integrated nature. Assuming the world remains bullish about fintech at large, we can expect significant contributions to the EU economy from at least a handful of startups in the near term as they scale across the region.

Of course, London’s fintech hotspots and co-working spaces won’t be vacated overnight, as the UK will most likely continue to provide good opportunities for startups looking to serve the country’s 60-plus million English-speaking citizens.

In fact, it is even likely that the government will ramp up incentives in the hopes of convincing some startups to stay in the kingdom, and new one to settle. This means that fintech may benefit from Brexit in the long term, bizarre as it sounds in the wake of the decision.

Also, unlike the large financial institutions that have chosen London as their strategic regional hub, fintechs are mostly nimble and adaptable. The best ones will certainly survive – despite the potential need to re-focus, acquire a new license, find a new home base and re-build their business.

For startups, the two-year exit horizon is very manageable and enough time to adapt to the new status quo. However, company valuations are likely to take a dip post Brexit, and startups in the UK may have lesser access to funding in the future.

As a European, this article would not be complete with a personal, emotional addendum to the Brexit debacle. Much as I am born and bred German, I identify strongly with the idea of being a European – despite the many unfortunate crises the region has gone through in the past years and months.

The EU is an unprecedented example international harmony, and a great political pilot for the world. Throughout my travels, one thing I keep noticing (in particular, about the millennial generation) is that what unites is much stronger than what separates us. European unity is built on the fundamental view that we can benefit from operating in unity, without having to sacrifice what is dear to us.

Also Read: Renovating financial institutions: What customer experience tells us about how companies are run

The decision to leave this Union will perhaps provide some instant gratification to UK voters, but the repercussions are likely to be permanent. One article very accurately called this the ‘Brexit hangover’ – and it looks like the leave camp is already starting to sober up, with a petition to re-run the referendum collecting close to 3 million signatures to this date.

Back to fintech – let us hope that not just the fittest will survive the political mess we are now facing, but that startups will emerge stronger, with more opportunities, and most importantly that they will keep doing what they do best: Create better financial services for the people of Europe.

The views expressed here are of the author’s, and e27 may not necessarily subscribe to them.e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your article here.

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