FintechGovernment & PoliticsTechnology

Fintech in Ireland: Investment and Innovation

FinTech in Ireland

The text of this Fintech in Ireland article originally appeared in the January 2016 edition of PaymentCompliance magazine and is reproduced here with permission. You can subscribe to PaymentCompliance here


Since the 1980s Ireland has transformed itself into a global hub for technology and international financial services (IFS). In 2015 the Irish government published “A Strategy For Ireland’s International Financial Services Sector 2015-2020”, which is also known as IFS2020. This strategy paper places a significant emphasis on investment and innovation in technology applied to financial services (known as ”FinTech”) in Ireland.

Fintech in Ireland Strategy Paper

Dublin’s International Financial Services Centre (IFSC) is home to many of the world’s leading financial institutions. Ireland offers organisations an open and business-friendly economy, a highly educated workforce, and a competitive tax environment, which have all contributed to Ireland’s recent success in the international economy. However, the global financial crisis of 2007-08 significantly diluted the attractiveness of Ireland as a centre for international financial services. The Irish government’s ambitious IFS2020 sets out the government’s renewed commitment and support for international financial services organisations doing business in or through Ireland, along with a plan to increase foreign investment and create jobs in the sector. The strategy paper places a competitive FinTech in Ireland sector at the forefront of its vision and aims to make Ireland one of the leading countries in Europe for FinTech investment and innovation.

IFS2020 Key Priorities

IFS2020 aims to leverage the existing strengths of Ireland’s financial services sector. At the same time, the strategy paper recognises that technology is rapidly changing the industry beyond all recognition and this will require investment and cooperation from all stakeholders. IFS2020 articulates the following five overarching priorities:

  • Priority 1: Promote Ireland as a location for international financial services and world class
    innovative products and services.
  • Priority 2: Drive continuous improvement in the operating environment and competitiveness of Ireland’s international financial services sector.
  • Priority 3: Drive research, innovation and entrepreneurship in the international financial services sector, with a particular focus on FinTech and governance, risk and compliance.
  • Priority 4: Develop job-creation opportunities from emerging international financial services sector sub-sectors and new markets.
  • Priority 5: Establish an implementation framework for IFS2020.

These strategic priorities, coupled with a subset of 30 associated actions points, are the building blocks that the Irish government hopes will consolidate and progress Ireland’s position as the location of choice for international financial services and FinTech companies

Why focus on FinTech

Digital wallets, peer-to-peer lending, crowd-funding, mobile payments and online foreign exchange solutions are some of the revolutionary products and services that illustrate how FinTech is rapidly changing the financial services sector. Moreover, the ever growing reliance of financial services organisations on “big data” analytics, real-time consumer feedback, smart devices and cyber-security, to name but a few, mean that technology and financial services are becoming inextricably linked.

Accordingly, the ability of financial services organisations to both innovate through technology and use technology to improve their existing processes and products will, to a large degree, dictate their success in the digital age. Through IFS2020 the Irish government is appreciating that technology, and specifically FinTech , presents a prime opportunity to develop and modernise the Irish international financial services sector.

Ireland sees the future as FinTech

Deloitte reports that, today, UK- and Irish-based companies are involved in more than 50 percent of
Europe’s FinTech deals. Moreover, IFS2020 claims that Ireland has “a five-year compound growth rate for FinTech financing that is…twice that of Silicon Valley”. IFS 2020 describes the Irish government’s
support for FinTech in Ireland and its objective to cement Ireland’s position as leading global hub for FinTech
investment and innovation. The specific emphasis of Strategic Priority 3 is on stimulating the following two connected areas: (a) driving research, development and innovation within existing financial services firms; and (b) FinTech.

To make Strategic Priority 3 a reality, the government intends to incentivise incumbent financial services organisations to invest in innovation, research and development. The government will also prioritise securing international and domestic funding for FinTech companies by introducing and matching investors with FinTech companies that are at a suitable level of maturity and development. The key non-financial aims include facilitating collaboration and communication between large international financial services companies and indigenous Irish companies.

FinTech specific action points

Of the 30 actions in IFS2020, the strategy paper describes the following FinTech specific actions:

  • Build a more cohesive financial technology ecosystem (Action 23) – Two government agencies, IDA Ireland (responsible for foreign direct investment) and Enterprise Ireland (the government agency in Ireland responsible for supporting Irish businesses), will work in partnership with other stakeholders to build a more cohesive financial technology “ecosystem” in Ireland. It hopes this will increase collaboration between Ireland’s IT and international financial services sectors, indigenous and foreign owned firms and research centres. The two agencies will also seek to expand the collection of FinTech  companies and activities in Ireland by securing investment from existing clients and new entrants.
  • Identify sources of funding for FinTech (Action 24) – Identify international and domestic sources of
    funding for FinTech companies and develop a process to facilitate introductions to “investor ready”
    organisations. Review funding mechanisms for start-ups, including if it is feasible to develop a dedicated syndicate to fund FinTech start-ups.
  • Support FinTech accelerators (Action 25) – Partner with existing accelerators to support engagement, training and mentoring with participating organsiations. Leverage Enterprise Ireland’s existing advisory panels to support market activities. Identify other potential accelerator partners and examine the success of FinTech models in other jurisdictions.

IFS2020 progress to date

The Irish government has been diligently producing progress reports on the implementation of IFS2020
that includes summaries of the development of each strategic priority area along with a more detailed
update on each of the 30 specific actions. The latest progress report demonstrates the positive
developments in the first year for Actions 23, 24 and 25 relating to FinTech , which are all “on course”.

The update reports indicate that in relation to the FinTech action points, interaction between the IDA,
Enterprise Ireland and key FinTech stakeholders is ongoing, with the new Fintech & Payments Association of Ireland (FPAI) established.

Other positive developments for FinTech in Ireland include a FinTech Investor Forum event that was held in June 2015 and several one-on-one meetings between investors and start-ups. There is also ongoing action an engagement in relation to FinTech accelerators and the government has completed a review to learn
from the example set by the success of international FinTech accelerators.

FinTech Payments Association of Ireland

IFS2020 describes the requirements for a coordinated approach to development of FinTech and
widespread consultation with industry stakeholders. To address this need, a not-for-profit trade
association called the Fintech & Payments Association of Ireland (FPAI) was launched in September 2015.

The FPAI describes itself as an inclusive association which welcomes participation and engagement from
public and private organisations with an interest in Irish FinTech. It states that its aims are to further the interests of stakeholders in the intech and payments businesses in Ireland and to foster an environment where they can thrive based on locating and doing business in Ireland.

FinTech in Ireland: Where to from here?

IFS2020 is an ambitious plan that highlights the Irish’s government’s long-term commitment to the
growth of the financial services and FinTech sectors through a combination of cooperation, innovation
and investment. The international financial services industry is extremely competitive, with Ireland vying against long-standing financial heavyweights such as London, New York and Hong Kong. However, the disruptive and unpredictable nature of FinTech has the potential to “level the playing field”. The financial centre that best adapts to new global financial and technology trends, such as peer-to-peer lending or crypto-currency, will be in pole position to become a 21st century leader of the knowledge economy.

A walk through Dublin’s International Financial Services Centre and “Silicon Docklands”, where many of the world leading financial services and technology companies have set up their European headquarters, demonstrates that confidence for Fintech in Ireland is high. Although the current key action points from IFS2020 are all on track, government, regulators and the private sector need to continue to implement the strategy paper’s actions points to ensure that Ireland remains a competitive and business-friendly environment for financial services and technology companies through to 2020 and beyond.


Photo credit: Flickr Hive Mind

One thought on “Fintech in Ireland: Investment and Innovation

  1. My brother suggested I might like this post. He was entirely right. You can not imagine just how much time I had spent for this information!

Leave a Reply