In 1987 less than 60 people worked in the International Financial Services Centre in the Dublin Docklands in Ireland. Three decades later after a government initiative to grow the sector, IFS has transformed into a national industry, employing 35,000 people across the country.
The fintech sector and the government are now hoping to replicate that success, specifically in the fintech space.
“The place is hopping,” says Anna Scally, a founder and board member of The Fintech and Payments Association of Ireland (FPAI). “There’s huge potential here.”
The FPAI was formed by pulling together different payments and fintech groups in Ireland to raise the industry’s profile and speak as a unified voice when lobbying for industry change.
Scally, who also works with fintech companies in her role as a partner at KPMG Ireland, says that people often think of London for fintech, but don’t look 50 minutes’ flight beyond the English capital to Ireland.
While it is an industry-led initiative, FPAI has the support of the Irish government, which has launched its IFS2020 initiative to identify new areas of growth in international financial services which Ireland can tap into, adding an extra 10,000 jobs in the next five years.
One of these areas is fintech.
“Our vision is for Ireland to be the recognised global location of choice for specialist international financial services, building on our strengths in talent, technology, innovation and excellent client service, while focussing on capturing new opportunities in a changing marketplace and embracing the highest standards of governance,” the government says in its strategy.
Many different countries and cities are aiming to become fintech hubs, but Scally says Ireland has certain advantages.
Firstly, Irish companies and Irish people have a global attitude, says Scally, who cites research showing the Irish have the most positive attitude to globalisation.
“Because our domestic market is so small, Irish companies have to go global immediately and that works really well for fintech companies,” she says.
A tech talent base
Ireland also has the tech-based talent. This has been built up over the past several years as foreign tech companies have set up European headquarters or development hubs in Ireland.
In fact, there is more US foreign investment in Ireland
than in the so called BRIC countries (Brazil, Russia, India and China) combined. “A significant amount of that investment has been from US technology companies. All of the top 10 global ‘born on the internet’ companies have either put their European headquarters in Ireland or established significant centres of excellence here,” Scally says.
“We have a huge tech talent base that has been built up both domestically and through the engagement with the international companies that are based in Ireland, and that’s critical if you’re trying to build a fintech ecosystem.”
Scally says Ireland wants to attract a broad mix of fintech companies.
“It’s really important that we have both early stage entrepreneurial-led companies where the founders are Irish but also where the founders are international and choose to come to Ireland,” she says. “And it’s also important that we continue to attract the larger companies.”
The strategy has already met with some success.
Stripe, which operates online payment systems and has raised US$190 million in funding, has set up in the US and more recently set up operations in Ireland; part of the Google wallet project is being run out of Ireland; and Citi’s Dublin Innovation Lab employs 400 highly-skilled technologists examining the delivery of financial services through new technologies to Citi’s clients worldwide.
Scally says Ireland is an obvious base from which to access the 500 million people in the Europe, the Middle East and Africa market.
“Ireland is a very open, business-friendly environment to build a business from and if you are a profitable business you will pay corporate tax at 12.5 per cent which is much lower than you will pay in other geographies,” she says.
Its time zone means that it’s possible to do business in Asian in the morning and in the US in the afternoon.
“Fintech is one of the emerging areas where we’re already contributing but with a bit of effort and focus we can probably make a very significant mark on the world stage,” says Scally.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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