2020 vision needed for Ireland’s fintech future

10 Aug 2015371 Shares

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Ireland's bet on fintech could profit the country in many ways

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From start-ups to multinationals, as many as 5,000 new jobs could be created in the Irish fintech sector by 2020. This is a calculated bet that could reward Ireland handsomely, writes John Kennedy

Twenty years or so ago bright minds at then little-known start-ups called Amazon and eBay cottoned on to this thing called e-commerce. Now e-commerce is fully ingrained in our way of doing things, whether it is buying concert tickets, paying bills, applying for jobs or booking flights — it’s hard to imagine life without it.

But if you consider e-commerce is just one constituent in a vast financial ecosystem that captures everything from online banking and insurance to sophisticated share trading and the onset of mobile wallet services like Apple Pay, then we are only at the start of an exciting new era.

And Ireland couldn’t be better placed. In the 1990s the International Financial Services Centre (IFSC) brought in a broad array of financial products and services companies, many of them subsidiaries of global players like Deutsche Bank or Citi.

Today, more than 35,000 people are directly employed in IFSC companies across the length of the country from Donegal to Kerry, not to mention thousands of jobs that are indirectly supported by these companies. Once the IFSC was a district of Dublin, today more than a third of IFSC jobs are located outside Dublin.

‘One of Ireland’s strengths is that we are responsive and nimble. We know how to adapt and evolve’
– SIMON HARRIS, TD

As the 2000s progressed many of these companies, such as Fidelity, added in vital technology service and R&D departments in Ireland, making shrewd use of the country’s talented young graduates and Ireland’s draw for young graduates from all over Europe as a place to live and work.

In 2009, MasterCard acquired Dublin tech company Orbiscom and today the south Dublin company is the global location for all of MasterCard’s digital R&D.

While traditionally Wall Street in New York, as well as cities like London and Frankfurt, have been considered the major go-to places for innovation in financial services, Ireland could carve out a considerable niche as the go-to place for fintech R&D and services.

Ireland is the last major landfall linking the US and European financial sectors and the availability of data centres and high-speed transatlantic fibre means Ireland is a strategic location for trading where every picosecond counts.

It is no accident that Apple – whose iTunes entertainment platform used by 800m people worldwide makes it the world’s biggest credit card repository – chose Athenry on Ireland’s west coast for a major €850m renewable data centre.

Ireland’s strength in fintech is clear and 2015 has so far been a bumper year for fintech jobs.

Among the major fintech projects announced so far this year were: 350 jobs announced by Pramerica in Letterkenny30 fintech jobs at Numerix in Dublin;, 120 tech jobs at Coupa’s new European hub in Dublin; 25 fintech jobs at TransferMate in Kilkenny; 80 new jobs at GlobalShares in Clonakilty in Cork; IFDS bringing 75 new roles to Dublin, 300 fintech jobs at Northern Trust in Limerick and Accenture plans to hire 250 people across a wide range of disciplines by the end of August.

These are just the tip of the iceberg.

Siliconrepublic.com is acknowledging the growing importance of fintech as an area with Fintech Week, which will take place on the website from 17-21 August, and will feature news and information on who’s who and who’s hiring in this emerging industry.

Joining the dots on fintech’s digital future

Once upon a time in Ireland people were told that a job in the bank was a job for life. Sectors like technology were frowned upon because parents just couldn’t get their heads around it. But everything has changed.

The Deloitte Talent in Banking Survey 2014 identified the ‘Google Factor’ as the reason why software services is the most popular industry for business graduates in Ireland. Banking was the third most popular industry.

It is clear that the opportunities for IT professionals within the financial services arena needs to be communicated to graduates.

In order to fill this demand for ICT professionals, education policy at second and third level needs to catch up. In the UK, for example, computer programming is to be made a mandatory subject for all students between five and 16. Ireland needs to pay heed.

On an industrial policy level, decision makers need to move fast to ensure that Ireland keeps its edge as a global fintech R&D hub.

Investment in innovation and collaborative activities and hubs is critical and a combination of Ireland’s R&D tax credit regime and the Knowledge Development Box need also to be examined.

Another area that needs to be paid attention to is the level of venture capital investment going into fintech – only €16m out of €400m in venture capital has been invested in fintech companies over the last three years.

In March, the Irish Government launched its five-year International Financial Services Strategy (IFS2020), which aims to build on Ireland’s strengths in talent, technology, innovation and client service to make Ireland the go-to location for the next generation of digitally-oriented financial services.

It includes over 30 actions in areas like improving competitiveness, driving research and innovation and creating new sub-sectors and markets. This included making use of Ireland’s enterprise agencies and embassies, its education system and its diaspora network.

As well as an implementation strategy, Simon Harris TD, Minister of State for International Financial Services, said that there will be a major IFS Summit held early next year.

“Ireland is uniquely positioned to become a leading global centre for fintech – where global multinationals can develop and implement their innovation strategies side-by-side with Irish-owned start-ups who will scale and succeed in global markets,” Minister Harris said.

He added: “One of Ireland’s strengths is that we are responsive and nimble. We know how to adapt and evolve.”

On the start-ups front, earlier this year Accenture brought six early-stage companies into its inaugural FinTech Innovation Lab in Dublin, the NDRC kicked off its FinTech start-up accelerator and Dublin-based fintech player Fenergo raised US$75m in a recent venture capital investment.

As well as this, Ulster Bank partnered with Dogpatch Labs to develop 8,000 sq ft of vaults beneath its coworking space, which is strategically located in the chq Building in the IFSC, with plans specifically to foster collaboration between fintech start-ups and neighbouring financial services giants.

If Ireland plays its cards right, stays focused and fosters better technology education in schools and greater innovation and collaboration between finance and software players, Ireland could one day consider itself a financial hub to rival New York, London or Frankfurt.

It’s a daring but calculated bet that could pay off.

Infographic: IFS 2020 — facts and figures

IFS-infographic-fintech

Fintech Week, with special coverage of this exciting new field, will take place on Siliconrepublic.com from 17-21 August. Follow #FintechWeek on Twitter to see all the stories about the opportunities in this emerging area first.

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IFSC in Dublin image at top via Shutterstock

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com