We have already seen some of the impact – the pound crashing to historic lows against the dollar, and, unfortunately, taking the rand down with it.
The regulatory impact of Brexit is likely to be no less disastrous.
A study by independent think-tank JWG suggests the uncertainty and regulatory changes required for the Brexit could cost at least £17 billion over the next decade. The UK financial sector, and others, will need to rework various legislation rather than relying on existing EU treaties.
What does this mean for South African companies struggling to meet existing regulatory requirements?
Those of us that trade with both Europe and the UK may find that we need to comply with additional rules and regulations – around areas such as financial compliance, anti-money laundering, risk management and even privacy.
The business case for an extensible data governance centre that allows us to quickly and easily understand the impact of compliance on data, reuse what we already have, and communicate compliance to the regulator has increased.
In the short term, the uncertainty created by the Brexit makes existing risk management regulations, such as stress testing and BCBS 239, more important. Now, more than ever, South Africa needs to show that our financial sector is solid, and that we remain a relatively safe investment option.
Hopefully as emotions subside we will be able to prove that South Africa remains a viable investment choice.