Ireland Proves Fertile Ground For Fintech Sector


Regulatory support and growing overseas investment in Ireland’s already buoyant financial services industry is creating an increasingly favourable environment for Ireland’s fintech sector.

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  • Ireland was ranked the best location for fintech in Europe by 60% of the financial services firms surveyed in a recent study

  • The Payment Services Regulations 2018, which came into force in January, are expected to foster new fintech business models and innovations

  • Operational challenges in the sector can include access to talent and commercial property for businesses looking to scale up

Ireland’s status as the world’s fourth largest exporter of financial services makes it an obvious location for both indigenous and foreign financial technology (fintech) companies. Research by Finance Dublin and Deloitte found that Ireland was ranked the best location for fintech in Europe by 60% of the financial services firms surveyed.

Writing in the Irish chapter of the 2018 International Comparative Legal Guide to Fintech, A&L Goodbody partners Claire Morrissey and Peter Walker note that Ireland does not have a specific regulatory framework for the fintech sector.

Fintech companies providing regulated activities fall within the existing body of financial regulation and so require prior authorisation from the Central Bank of Ireland to conduct business. The pieces of legislation most likely to apply are the Electronic Money Regulations 2011 – which authorise an undertaking to issue e-money – and the Payment Services Regulations 2018, which govern payment institutions and third-party payments services providers providing payment initiation and account information services.

Regulatory Sandbox?

In mid 2017, the Central Bank of Ireland published a discussion paper seeking views as to whether consumers were adequately protected from new risks arising from the digitalisation of financial services. A spokesperson confirmed that the central bank had not yet published any conclusions from the paper. However, it has been proactive in the fintech regulation space, announcing plans to develop an innovation hub to engage directly with financial technology firms “outside of more formal regulatory interactions”.

While this falls short of a regulatory sandbox it could be viewed as a first step in this direction, according to Josh Hogan, partner and head of the financial services regulatory group at McCann FitzGerald. (Pioneered by the Financial Conduct Authority in the UK, regulatory sandboxes are controlled testing environments where firms may launch new technologies subject to specific regulator-imposed limitations.) “There are signs that EU member states’ views are evolving as regards to the desirability of the regulatory sandbox model,” he says. “For the moment, the innovation hub will focus on engagement, sharing and listening.”

Fintech Recruitment

Recruitment is a key issue for fintechs, and there are measures in place to help companies recruit for positions they cannot fill with candidates from the European Economic Area (EEA). Prospective employees from outside the EEA can apply for a Critical Skills Employment Permit if they have a job offer for at least two years within the state and an annual salary of €60,000 or more.

Jobs with annual salaries of €30,000 or more may also be eligible provided they are one of the occupations listed on the Highly Skilled Occupations List.

Morrissey and Walker observe that the Payment Services Regulations 2018 (which came into force in January this year) lowered the barrier of entry for fintechs into the payment services market, and are likely to foster new fintech business models and innovation in the open banking space.

Early-stage Irish Fintechs

Among the most interesting early-stage Irish fintechs are Trezeo – which recently became the first income-smoothing service to be authorised by the FCA – and savings and investments app developer Yomo. Founded by fintech veterans Garrett Cassidy and Flavien Charlon in 2016, Trezeo offers users a business account controlled by an app. Once the user’s income gets paid into the app, any money left over after paying living expenses is held in the Trezeo account. Users can request an advance on their income to pay an unplanned expense and transfer savings to their bank account via the app.

Launched in November 2017, Yomo is a savings and investments app designed to help users (particularly those in the 20 – 35 age group) take control of their finances. It comprises a savings scheme, an education component designed to improve understanding of personal finance, and an investment platform.

Yomo co-founder and CEO Gavin Shields is complimentary about the support available to fintech start-ups in Ireland through organisations such as Enterprise Ireland and InterTradeIreland. He advises prospective fintech entrepreneurs to spend as much time as possible identifying and understanding the problem they are trying to solve, and says much can be learned from ongoing research.

Overcoming obstacles

Operating a fintech business in Ireland is not without its challenges, though. Fenergo, which provides client lifecycle-management software solutions for financial institutions, has seen its growth constrained by recruitment and workspace issues, says COO Colm Heffernan.

“The main operational challenges facing financial technology companies in Ireland are access to talent and availability of commercial property to accommodate a growing organisation,” he says. “These factors have impacted our ability to scale as quickly as we would like.”

Heffernan also refers to the impact of GDPR, which requires data controllers and data processors to implement appropriate technical and organisational security measures pertaining to the risks involved in the data processing.



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