Joe Duffy: On fintech and the importance of financial services to Ireland’s future
OREANDA-NEWS. Ireland’s inconclusive election results from February 26 show a nation divided on the political future of the country. Whatever the outcome, what is clear is that we must not let the fragmented political landscape risk derailing the strong position of our International Financial Services industry, built up over many years of acquired knowledge and expertise.
From the low of the EU-IMF bailout in 2010, Ireland had the fastest-growing European economy in 2014 and 2015, and is very likely set to repeat that feat this year, predominantly because of strong exports to the US, UK and other European markets, but also because of the power of export-driven growth from our International Financial Services sector.
With financial services contributing 7.4% of Irish GDP and approximately €2.1 billion to the Irish Exchequer – a strong Ireland needs a strong financial services sector which, for a small export-driven economy, translates into a strong internationally focused financial services sector.
Ireland has firmly established itself as a world capital for fund administration with data from the Irish Funds Industry Association indicating assets under administration reached a new record €3.6 trillion as of September 30, 2015.
Total employment in the IFSC today stands at over 38,000 (7.4% growth in 2015) with 10,000 people employed outside Dublin. These are not just funds industry roles; they are a diverse mix across insurance, payments and other banking activities. Aircraft leasing is also huge.
I read an incredible statistic in the Financial Times in January stating that a fifth of the planes that fly around the world today are owned by leasing companies operating out of Ireland. It is therefore not surprising to see IATA, the global airline trade body, forecast Irish aircraft lease income to rise from the expected €8.9bn in 2015 to €20bn by 2033.
I believe the next new opportunity for financial services growth and jobs is in ‘fintech.’ Fintech is growing at a rapid rate, driving disruption in financial services in the same way that Uber and Amazon disrupted their industries.
What has been really pleasing to see, is how the last Government threw its weight fully behind the sharp growth in start-up fintech firms looking to use technology to exploit perceived gaps in global financial services, and fostered an environment suited to that.
But more now needs to be done for this accelerating growth to continue and for Ireland to truly compete with other European, and, equally fast growing fintech hubs around the world.
Ireland’s regulatory environment and a pro-enterprise government have been instrumental in the success of the Irish funds industry. The same can be said of what is instrumental and intrinsic to the future of Irish fintech. For Ireland’s fintech sector to flourish, the regulator, encouraged by those in power, needs to continue to take further progressive steps similar to those of other strong fintech centres.
With technology transforming all aspects of the financial services industry and money pouring into start-ups and established companies leading the change, countries and cities around the world are jockeying to become fintech hubs. Competition may be fierce, but I believe Ireland has all the right ingredients to be a strong and successful competitor.
If the next government can acutely focus on this sector and ignite ‘best in industry’ thinking, rather than ‘do its bit’ to continue to foster investment support learning and enable entrepreneurship, and the regulator can continue to address the needs of emerging fintech companies as quickly and thoughtfully as it has done for the funds industry, the future of Irish fintech will be very bright indeed.
Комментарии