Brexit for the Financial Services Industry

Banking with borders: preparing for Day 1 and beyond

With the United Kingdom (UK) set to leave the European Union (EU) in March 2019, banks and other financial institutions have developed strategic plans with a ‘Hard Brexit’ scenario - in which UK legal entities will lose the right to serve EU clients—in mind. To protect their European franchises, financial institutions need to build capability in the EU27.

The timeline challenge

To be ready to serve EU clients by March 2019, most firms will need a new EU entity, or significant expansion of an existing entity, in place by late 2018.

Deloitte supports financial organizations in managing the impacts of Brexit through end-to-end services that help navigate through this complex process, including:

  • Regulatory authorizations: We support a variety of different authorization processes with the European Central Bank, UK Prudential Regulation Authority, and the main European national regulators, and can help navigate regulatory uncertainty and understand industry approaches.
  • Client repapering: We help firms scope the need for repapering, develop an approach, as well as execute complex repapering exercises.
  • Target operating model: We help define detailed post-Brexit operating models for the EU and UK.
  • Human resources, mobility and tax: Brexit will have complex impacts onstaffing models, personal tax, relocation and remuneration, and intragroupcontracts, among others. We support identification of staff moves, personal tax and reward considerations and the assessment of tax impacts including valuation, transfer pricing, and VAT on business transfers.
  • Booking models and Day 2 path:  We support the development of booking model design and controls in EU27 and UK entities to produce properly defined and controlled booking models. EU regulators see this as a key part of their commitment not to authorize ‘empty shell’ entities that are overly reliant on affiliates.
  • Technology: We support technology builds and development of approaches for Brexit execution activities, in the context of recent changes to European data protection legislation, data approach and execution.
  • Financial market infrastructure (FMI) membership: We support banks working on large numbers of FMI applications and connectivity changes.

Be Brexit ready

Following the UK’s vote to leave the EU, Deloitte firms around the globe have prepared detailed insights into the implications for organizations which are now emerging. Explore our global perspectives to assess the risks and opportunities which this unprecedented situation presents.

Global leader

Vishal Vedi

Vishal Vedi

Global Financial Risk Leader

Vishal is the Global Financial Risk lead for Risk Advisory. As a partner in the Deloitte North West Europe practice he leads the Brexit and Structural Reform initiatives across Financial Services. Vis... More