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A Tale of Two Cities: Brexit’s Mixed Blessing for European Fintechs

It’s not easy to pick out the similarities between Dublin and Vilnius. You could visit one after the other, pondering their resemblance during the three-hour flight – and still come up with just a handful of examples.

Yet the two cities, some 1,300 miles apart, stand shoulder-to-shoulder where technology is concerned. Both are among the largest fintech hubs in Europe. Both are home to some of the continent’s tech-savviest citizens (ICT qualification rates are well above the EU average). And though Dublin has its “Silicon Docks”, at least one besotted CEO has called Vilnius a mini-Silicon Valley.

With fintechs shifting their operations from London to retain single market access, Dublin and Vilnius have been further strengthened by Brexit. Some startups have even set up offices in both cities, like Revolut or the payments giant SumUp. One Lithuanian fintech believes Brexit will establish Vilnius as a European tech hub; one Irish fintech thinks it will establish Dublin as the European tech hub. According to Michael Browne of Enterprise Ireland, Brexit “presents greater opportunities for Irish fintechs to partner with innovative global players.”

Competition for talent

But there isn’t just an opportunity to partner with multinationals – there’s a necessity to compete with them as well. Recruiting talent in Dublin and Vilnius has long been competitive (“hyper-competitive”, opines one industry expert). Although the issue pre-dates the referendum result, Brexit has only increased the pressure on fintechs.

“The competition is huge,” says Ija Šležė, CEO of Lithuanian startup Forbis. Demand for talent started growing several years ago when Barclays and Danske arrived in Vilnius. Brexit’s impact is trickier to gauge, but there is “only one general rule,” she believes. “Every new player, especially a big one, increases the competition.”

Since the referendum, there has been no shortage of newcomers to Vilnius. Invest Lithuania’s Rugilė Stonytė characterises it as a “snowball effect.” Only last month, Yapily announced plans to expand to the capital, joining fellow fintechs like Railsbank and Curve. And as for big players, Revolut opened an office in 2017, where it now employs some 170 people: ten times more than the average Lithuanian fintech.

The result? “Attracting new talents to tech has never been more challenging than now, and that’s the reality,” claims CoinGate CEO Dmitrijus Borisenka. Lithuania’s talent pool is being rapidly soaked up: over 2019, the number of fintech employees shot up by a third. When CoinGate – a cryptocurrency startup based in Vilnius’ old town – recently tried to recruit a senior developer, it took four months to find someone suitable.

A similar story is unfolding on the other side of Europe, as observed by John Byrne, CEO of Dublin-based Corlytics. “Unicorns moving to Dublin because of Brexit will make it even more competitive,” he says. The city has been a magnet to US giants like Payoneer and Coinbase, along with smaller London-based fintechs like Modulr and Soldo.

Talent was already in demand, according to Byrne, because of the tech giants with European headquarters in the city. Google, for example, based itself in Dublin’s largest commercial building (which it rechristened “Google Docks”). Ten minutes across the Mac Mahon Bridge will take you to Facebook’s HQ; ten minutes more, and you’ll reach the home of Twitter on Fenian Street. The Irish Fintech Census names coding and software development as the hardest skill to source; anyone wondering why just needs to look at this corner of Dublin. The area, a fraction of a square mile, is a black hole for talent.

When it comes to recruitment, fintechs have to fight on two fronts: finance and technology. This is particularly competitive in Dublin, the most popular destination for financial service firms relocating after Brexit. “We are competing with technology companies in Ireland, but also with financial companies moving over – so it’s really on both sides,” explains Immedis CMO Tara O’Sullivan.

How can fintechs survive, surrounded by big fish in small talent pools?

Immedis focuses on retaining, as well as recruiting, talent. It’s a key consideration in a poacher’s paradise like Dublin: in 2018, two-thirds of Irish businesses planned to offer staff pay-rises to fend off headhunters. Although the wages at Immedis are reportedly “top quartile,” O’Sullivan stresses the fintech’s opportunities for promotion and diverse culture. “Alignment with the company’s vision, mission and values often trumps salary,” she says.

According to Byrne, Corlytics is a “flat organisation”, where employees can make decisions without being stifled by top-heavy management. Progress takes priority over process. “Brexit brings opportunities to work at senior levels […] at large companies,” he admits. “The hierarchy and structure will not be for everyone – this is where Corlytics needs to compete.”

Over in Vilnius, CoinGate’s eclectic benefits package ranges from insurance and flexible working hours to electric scooters and G-force simulators. Ija Šležė claims Forbis combines the advantages of a large technology company – like Google, which has a Lithuanian office overlooking the River Neris – with professional development opportunities and a “democratic” workspace. Yet the “big IT centres seem to be more attractive,” she concedes.

Talent in populations

The basic issue is population size. Dublin might be three times larger than Vilnius, but it’s still six times smaller than a European fintech behemoth like London. To compete, both cities need to attract talent from abroad.

Dublin has proved more successful at this than its Baltic counterpart, which has suffered a “brain drain” for most of the past three decades. In a recent report, Vilnius was ranked 115th for attracting foreign workers – trailing Dublin by almost a hundred places. Irish fintechs have a “history of attracting talent from overseas,” comments Michael Browne.

Lithuania, however, has a history of its own. According to Greta Monstavičė of Katalista Ventures, “there has always been a sizeable Belarusian community” in the country. Vilnius alone is home to 19,000 Belarusians – given recent protests in Minsk against Europe’s “last dictator”, Alexander Lukashenko, that number is projected to grow further.

Monstavičė believes Belarusians may have had a greater impact on Lithuania than any other foreign workforce. They’re a sizeable demographic and, crucially, tech talent runs deep. A Belarusian has won the Google Code Jam programming competition every year since 2013. According to Rugilė Stonytė, Belarusians migrating to join their northern neighbours is “a great opportunity for fintechs in Vilnius” to recruit “talented and experienced engineers.”

But the transition to remote working means fundamental change is afoot. “We can hire the right skills remotely from this point onwards,” reveals John Byrne. “Our team does not need to be based solely in Dublin and London.” At Immedis, meanwhile, recruiters have begun to look for “the best person for the job” and not “the best person in a given location.” Fintechs across Dublin and Vilnius are starting to scan distant horizons for the next generation of developers and programmers. The battle for talent isn’t over, but it is shifting to new, global arenas.

“People are our greatest asset,” says Tara O’Sullivan. “The right talent is worth fighting for.”

Author

  • Benedict Smith studied English at Oxford University, followed by Journalism at City, University of London. Alongside the The Fintech Times, he has written for ABC News and Good Morning America.

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