In a post-Brexit boon, assets under management in Dublin have the potential to grow to $8.2trn by 2025, and opportunities of AI and robotics could also be leveraged.
Ireland leads the pack in terms of where to relocate to for the management of assets in a post-Brexit world, according to a new report from PwC.
The 21st PwC CEO survey, Optimistic CEOs and buoyant growth, yet disruption looms, included many with Irish operations and focused on looming threats such as Brexit and cybersecurity as well as opportunities in the form of AI and robotics.
‘Technology, and particularly the rise of AI and robotics, provides great opportunities to further manage the cost base and deliver even better products to consumers’
– TRISH JOHNSTON
Almost three-quarters are concerned about cybersecurity threats.
While 70pc believe changes in core technologies will prove ‘disruptive or very disruptive’ over the next five years, just 38pc believe that robotics and AI can improve the consumer experience.
A whopping 83pc are concerned about regulation; in Europe, they reckon that the Markets in Financial Instruments Directive II (MiFID II) will squeeze margins.
Similarly, 77pc are concerned about tax changes and the threat of an EU digital tax and EU tax harmonisation.
London falling: Brexit planning at advanced stage
Ireland appears to be the forerunner when it comes to locations of choice ahead of Brexit and, according to PwC, most asset managers based in London have advanced Brexit plans in place.
Many CEOs are worried about the availability of digital talent. Nearly two-thirds (63pc) confess to being ‘somewhat or extremely concerned’ about the lack of digital skills in senior leadership. A similar number, 67pc, are concerned about a lack of digital skills throughout their businesses.
“These organisations are considering relocating certain aspects of their financial and accounting functions out of London to other EU capitals including Dublin, Luxembourg and Frankfurt,” said Andrew O’Callaghan, PwC EMEA leader for asset and wealth management.
“The reasons highlighted for Ireland’s popularity included common-law jurisdiction, protection of contracts, English-speaking and a relatively easy destination to access. While companies are preparing for Brexit, with many having made plans, they cannot hold off indefinitely to implement these plans.
“And, while a transition period may be on the cards to December 2020 to avoid unnecessary disruption, it is critical that clarity on Brexit is achieved as soon as possible.”
Trish Johnston, PwC Ireland asset and wealth management leader, said that assets under management in Ireland have the potential to grow to $8.2trn by 2025.
“With an economy that continues to grow at above-EU-average GDP levels, we remain very confident about the future growth capacity for Ireland’s funds industry. The strengthening of global economic expansion and robust global investment will further fuel growth in Ireland.
“However, with the uncertainties caused by Brexit and other geopolitical challenges, we cannot be complacent. Technology, and particularly the rise of AI and robotics, provides great opportunities to further manage the cost base and deliver even better products to consumers.
“The Irish asset and wealth management industry, like its global counterparts, also needs to fully leverage technology to enable it to forge ahead,” Johnston said.