Patricia Callan
Director, Financial Services Ireland
With digital technology embedded in every part of life, each firm operating in financial services is now a fintech firm.
The ongoing digital transition presents profound opportunities for firms, underpinned by their desire to meet evolving customer expectations and demands. It’s an opportunity to win business by providing a great service and attracting great talent with new, exciting jobs. For Ireland, the opportunities are vast. At FSI, we want to make Ireland a hub for entrepreneurs, from all over the world, building the next generation of financial services firms.
Report on digital transition in financial services
Earlier this year, we published a report entitled ‘Ireland’s Fintech Future’. The report was underpinned by a survey we commissioned to find out how financial services firms are managing their digital transition journeys. The findings of the report were positive, with firms of all sizes optimistic for turnover and headcount growth over the next three years.
The report also provided insight into the composition of the fintech startup sector in Ireland. Two-thirds of the participating companies operated across multiple areas, with ‘payments (not payroll)’ the most commonly identified single area. The prominence of regulatory technology (regtech) was also noteworthy as an insight into the opportunities perceived to exist in helping firms comply with regulation more efficiently.
Firms recognise that having a well-regulated
financial services sector is critical.
Navigating policies and regulation
The findings did, however, seem to bolster a perception in the industry that there is a shortfall of fintech startups operating in regulated areas of financial services. A contributing factor may be the length of time that it takes to get an authorisation from the Central Bank of Ireland (CBI), which some firms identified as a challenge.
Some fintech startups also reported that complying with the body of regulation is an obstacle to growth. This is the nature of operating in a regulated sector, and firms recognise that having a well-regulated financial services sector is critical. However, meeting the required regulatory standards can be costly and time-consuming.
Building a well-functioning financial system
We called on the CBI to examine its processes regarding how regulation is administered, and we warmly welcomed their public consultation on their approach to innovation engagement. One of the CBI’s objectives is to ‘ensure that our regulation is aligned with a well-functioning financial system based on good levels of competition and innovation.’
We look forward to continuing engagement with the CBI and Government so that we increase growth and innovation in financial services, to benefit Irish society and the economy.