Enterprise Ireland’s Leo McAdams offers his perspective on the Irish fintech scene and what the Government’s support for this sector entails.
Fintech is a priority sector for Enterprise Ireland (EI). A dedicated fintech team in Dublin manages more than 220 indigenous clients with internationally focused business strategies.
The team coordinates a large and increasing number of fintech international initiatives with representatives from its international network, with a focus on both established markets such as North America and the UK, and emerging markets such as China and Latin America.
The 220 companies in the fintech portfolio represent a wide range of sub-sectors, including payments, financial software, insurance, business process outsourcing, peer-to-peer lending and supply chain finance.
The portfolio also represents companies at different stages of growth, with a growing number of early-stage start-ups – such as Corlytics, AQ Metrics and InvoiceFair – balanced by a large number of bigger, scaling companies, including Fexco, Taxback, Fineos, CR2 and, lately, companies such as Fenergo, which has just raised $75m in expansion capital.
EI’s fintech portfolio employs more than 8,000 people, of which 40pc are located outside of Dublin.
‘EI’s fintech portfolio employs over 8,000 people, of which 40pc are located outside of Dublin’
In terms of start-ups, there has been a significant increase in the number of fintech investments approved by EI over the last 12 to 24 months.
The start-ups’ focus areas are also wide ranged. A number are focusing on offering technology to the funds industry. Some are aiming at the compliance and risk market. Others are offering ‘funding’ solutions by way of supply chain finance and peer-to-peer lending.
The entrepreneurs have typically originated from traditional financial services sectors, with a large number having either a banking background or coming from long-established fintech companies. Because they know the industry, their services or products tend to focus on solving problems for financial services companies and offering a ‘have to have’ rather than a ‘nice to have’ solution.
Having financial services experience is definitely an advantage, as it gives the start-up immediate credibility, industry contacts and knowledge of the ‘pain points’ and buying cycles.
‘Having financial services experience is definitely an advantage, as it gives the start-up immediate credibility, industry contacts and knowledge of the ‘pain points’ and buying cycles’
The fintech ecosystem is hugely important in terms of supporting start-ups and entrepreneurship.
Funding is the life-blood of all start-ups, and Enterprise Ireland is providing equity funding at both the early stage, via the €50,000 Competitive Start Fund, and the high-potential start-up (HPSU) stage.
The recent €65m Seed and Venture Capital Scheme includes a focus on priority sectors, including fintech. Also, EI, in parternership with HBAN, held the first fintech angel event in June of this year and attracted a large number of fintech investors. Two of the six companies that presented secured equity funding from the event.
The banks have stepped up their engagement with fintech companies on a number of levels. Both AIB and Bank of Ireland have traditionally supported a number of seed funds that have invested in fintech companies. They are now providing incubation and co-working space, and are also the end users as they buy fintech solutions for internal use.
Over the last 18 months, three accelerators launched programmes in Dublin – the NDRC pre-accelerator, the 12-month MasterCard programme and Accenture Fintech Innovation Lab Dublin – all aimed at assisting start-ups in validating their product offering and engaging with financial institutions.
The government’s IFS2020 strategy is hugely supportive of the industry, both MNCs and start-up and scaling indigenous companies.
It aims at delivering an increase in jobs by focusing on policies and actions that will drive growth, including internationalisation, branding, funding, skills, research and innovation, and infrastructure.
‘Very few international jurisdictions can match what Ireland can boast of in terms of fintech’
A number of international jurisdictions are putting themselves forward as fintech locations of excellence in competition with Ireland. A large number of these jurisdictions are planning to develop policies that will create a fintech industry in the future.
Very few of them can match what Ireland can boast of today in terms of the number of tier-one financial services MNCs, a vibrant start-up and scaling scene, and significant government and industry support for the sector.
Leo McAdams is the financial services, software and business process outsourcing department manager at Enterprise Ireland. McAdams worked closely with Minister Simon Harris in developing the IFS2020 strategy and was instrumental in supporting the recently launched Fintech and Payments Association of Ireland.
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