Life after 50: What Brexit means now for US financial institutions
Overview
Now that Article 50 has been triggered, the UK and EU will negotiate pressing issues such as the movement of people, goods, services, and capital across borders. The results of these negotiations will affect many business decisions, including potential investments, human capital allocation, and contract revisions. US financial institutions need to take decisive steps to prepare for a Hard Brexit, and watch closely as negotiations get underway.
How does Article 50 alter the timeline?
Now that Article 50 has been triggered, the two year countdown has begun. Within this period, the UK and EU will negotiate pressing issues such as the movement of people, goods, services, and capital across borders. The results of these negotiations will affect many business decisions, including potential investments, human capital allocation, and contract revisions.
Planning Ahead
Financial institutions can take the following steps to prepare for a Hard Brexit:
1. Evaluate your business exposure. Determine how your firm operates within the UK and EU
2. Address any information gaps. Gather relevant information related to your business structure
3. Continue your plan implementation. Analyze areas of focus for your business and adapt the plan accordingly
With negotiations underway, we encourage you to closely follow the outcomes, as there is no precedent for a player such as the UK leaving the EU.
Here are the five things to watch closely as negotiations get underway:
1. Continuing negotiations between the EU and the UK
2. Changes to the EU and UK economies
3. Contagion and uncertainty with the upcoming EU elections
4. Immigration policy discussions
5. Fragmentation and shift of financial influence across the EU
While it is difficult to predict exactly what the final landscape will look like, financial institutions should take this opportunity to redefine their response plans, and keep a watchful eye on any major developments to appropriately position themselves in this time of uncertainty.
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Sample Brexit actions, an illustration of where a client could be at this time.
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How PwC can help
Our teams in asset and wealth management, banking and capital markets, and insurance are helping our clients tackle the biggest issues facing the financial services industry. With professionals across tax, assurance, and advisory practices, we can help you find ways to thrive even in a period of uncertainty. Whether you're preparing for regulatory changes, putting FinTech/InsurTech to work, or rethinking your human capital strategy, we work together with you to deliver value to your business.
For more information on how PwC can help with Brexit planning, reach out to one of our leaders below.
