The following extracts are taken from The Irish Times’ ‘Focus on Fintech’ supplement published on 10 December 2015 and are reproduced here with their kind permission.
By Gordon Smith
With the new Fintech and Payments Association of Ireland (FPAI) in place, the country’s growing fintech industry now has the means to liaise directly with policymakers in plotting a course aligned to the Government’s strategy for international financial services, IFS 2020.
The FPAI was formed in September and it merges a number of groups – including early- stage companies, banks and financial institutions – into a unified industry body. “The idea of pulling all the groups together was to create a much more cohesive organisation, under which all companies can coalesce under one banner. It also helps shine a spotlight on what’s happening in fintech in Ireland,” says Anna Scally, tax partner at KPMG and a director of the FPAI. One of the association’s tasks has been to set up a working group to collaborate with the Government on fleshing out the IFS 2020 strategy and put forward the concerns of the fintech industry.
Scally says that many of the constituent parts needed to grow and deepen the fintech sector in Ireland are already in place. “I do believe we have a lot of the very important elements to become a greater fintech centre than we are today. We have a number of the earlier- stage companies, like Grid Finance, TransferMate and Brite:Bill. We have a number of mid-stage and scaling companies, like Payzone, Fexco, Realex Payments and First Derivatives."
“Then we have other companies which provide the backbone, such as Bankhawk Analytics and Corvil, and, very importantly for Ireland, we have the multinational companies, which differentiates us quite significantly from other countries.”
This latter group includes PayPal and Google, which is developing payment and wallet technology. Citi’s innovation centre has carried out research and development in Dublin since 2009 and has already produced a web-based electronic banking platform, an analytics tool and mobile payment solutions.
In 2012, MasterCard Labs set up an innovation hub in Dublin, leading technology development for the group worldwide. More recently, Accenture also established a fintech innovation lab in Dublin with an incubation
facility for fintech start-ups.
“The multinationals here are very heavily engaged either directly in fintech or supporting internal fintech initiatives,” says Scally. “We have a recovering domestic banking scene and we also have a number of international
banking funds who themselves are all very keen to participate in what’s going on from a fintech perspective.”
By Barry McCall
Businesses can trade and get paid online without going through the hoops and expense of linking up with credit card companies by using services such as PayPal or Stripe; individuals can use Currency Fair to get foreign exchange far more cheaply than through the banks; and businesses can transfer money around the world quickly and at low cost using Transfer Mate. These are just a few of the rapidly growing legion of fintech services that are challenging the traditional financial services players and making them rethink how they are going to do business in future.
KPMG tax partner Anna Scally adds that the banks are responding. “All financial institutions have realised that they have to become much more efficient and effective,” she says. “The competition is no
longer just the bank down the road. For example, Colm Lyon has a new company called Fire, which will offer an online current account without a bank. This is something the banks will have to respond to. But they are exercised and engaged.You can see how many of them are engaging in innovation.”
A number of banks have responded very proactively to the challenge. These include State Street, Citi and Ulster Bank, which has recently moved its internal innovations team into the Dogpatch Labs technology start-up hub.
Anna Scally has an interesting solution for banks looking for help from the burgeoning fintech sector. “KPMG has an exclusive tie-in with Matchi,” she says. “This is a platform which features innovative fintech
companies and facilitates banks and financial services institutions to find solutions to meet their needs. It’s a matchmaking service and we help financial institutions to define the problems they are facing and then look on Matchi to findthe solution.”
The sector itself is also becoming more visible in Ireland with the recent establishment of the Fintech and Payments Association of Ireland (fpai.ie).
“This will help Ireland’s growth as a fintech hub and help the companies connect with one another and the traditional financial services players,” says Scally. “Many countries are vying to become fintech hubs and the FPAI will help promote Dublin in this regard.”
© 2017 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.