Financial Services firms expect to deliver jobs boost for Irish economy
Strong business sentiment among financial services firms operating in Ireland is set to deliver continued jobs growth in the sector over the next three years.
The findings are detailed in a new report launched by Financial Services Ireland (FSI), the Ibec group that represents the sector in Ireland, with members spanning banks, insurance and reinsurance companies, fintech start-ups, fund and asset managers and more.
Almost three quarters (70pc) of respondents expect to grow their headcount over the next three years, and the vast majority also expect to grow their turnover.
The report, Ireland’s Fintech Future, surveyed a range of financial services companies to capture their insights as firms in the sector continue to evolve their offerings, to deliver the digital services that customers want.
FSI Director Patricia Callan said: “As consumer appetite for digital services continues to grow, every firm operating in financial services is now a fintech firm. The findings of the survey show that the sector is positive about the future, but it is clear that there are obstacles in place in Ireland, both for developing the next generation of financial services firms, and for longer-established firms who are digitalising their businesses.”
The report’s findings are derived from a survey carried out by Amárach, which categorised respondents in two ways: start-ups operating in the area of fintech, and longer-established financial services companies digitalising their business. The survey results were complemented by interviews carried out with a subset of firms in both categories.
Some of the key findings include:
- Firms said there was not enough Government support for growth or innovation in fintech. Almost two thirds (65%) of all respondents said there was not enough government support for growth, and 72% said there was not enough government support for innovation.
- Skills shortages are a key challenge, with areas like software engineering and compliance highlighted
- Firms reported that regulatory compliance is substantial in terms of time and expense, posing obstacles to growth and digitalisation. The importance of strong and credible regulation is well recognised, but firms believe there are opportunities for the Central Bank of Ireland to streamline the process by which the regulations are administered.
On the back of the report’s findings, FSI is making three key recommendations:
- Government should work to create an environment that is more conducive to growth and innovation in fintech: implementing initiatives that would make Ireland a more attractive place for firms to locate, and allocating and enabling increased funding options for growth firms. State agencies like IDA Ireland, Enterprise Ireland and Irish Strategic Investment Fund (ISIF) should play a key role. We also believe Government funding for the establishment of a ‘fintech hub’ would deliver significant benefits to the industry and the economy, and represents a clear statement of intent about Ireland’s ambition for excellence.
- Government should look to increase the pipeline of talent with the skills that are currently in short supply. The €1.5bn surplus in the National Training Fund should be utilised to ensure the higher education system is adequately funded and has the capacity to meet Ireland’s skills needs. Firms expressed a willingness to collaborate further with educational institutions in order to inform the development of courses.
The Central Bank of Ireland should examine its processes with regard to administering regulation, with a view to ensuring these processes are as streamlined as possible. From a firm-level perspective, clear guidelines and certainty of timeframes enable compliance to take place in the most efficient way.