There is a list of challenges that Ireland needs to address in order to achieve full potential.
It's not just the rapid growth of the Irish FinTech sector that has set tongues wagging internationally, but also the development of a multi-layered eco-system designed to encourage innovation in this exciting area.
Along the golden mile in Dublin's IFSC, Fintech has become something of a buzzword as large international and domestic Financial Services companies seek to use technology to find ways of making their business practices more agile, profitable and attractive to the consumer.
FinTech's tentacles are reaching into the world of online payments, including international payments, compliance and back-office functions.
It's now one of the fastest growing financial service sectors on the planet. In 2014 alone €11billion was invested in the area.
Investment in FinTech in the UK and Ireland rose from €239 million in 2013 to €564 million in 2014. And around 7,000 people are employed in the sector here with that figure expected to grow steadily.
In March 2015, a FSI FinTech Task Force was established and Marc Coleman explains why this development is key to creating an International FinTech hub here.
"FinTech is not just a sector but a cross-sectoral phenomenon that cuts across the existing sectors of financial services and, increasingly, challenges and disrupts it", said Coleman.
He added: "FSI's Budget submission for 2016 outlined what is needed to encourage startups to get up and running and achieve critical mass: a friendlier taxation system, a balanced approach to regulation and a champion for the industry in the form of a FinTech Commissioner."
To continue innovating and growing the FinTech sector here the availability of skilled graduates with appropriate expertise is intrinsic - but are we producing enough such employees?
Marc Coleman explains: "Among those companies surveyed for last year's "A Skills Needs Analysis of the International Financial Services Sector", nine out of ten expect to increase the size of their organisations in the next three years. The challenge is that nearly eight in ten cite the need for required skills as important to achieving growth. FSI's FinTech Task Force will prioritize the skills challenge in the coming months so the sector can create high-quality sustainable jobs for young people and strengthen links between the industry and third level institutions."
In September, 2015, Minister Simon Harris launched the new FinTech and Payments Association (FPAI) to "provide a single voice for Ireland's growing financial technology and payments industry."
One of the Directors of the FPAI, Anna Scally, is also a Tax Partner with KPMG. She advises Irish and international FinTech companies on tax efficiently structuring their international businesses. She also gives advice to many early stage Technology and FinTech companies on the challenges around fundraising, structuring shareholding arrangements, rewarding founders and employees and growing global businesses.
At the end of 2015 KPMG launched "FinTech 100" - a profile of the fifty leading and established FinTech companies across the globe as well as fifty emerging stars.
Limerick brothers John and Patrick Collison of online payments firm Stripe ranked 16th in FinTech 100.
"The scale of the FinTech opportunity for Ireland is unprecedented. It is a measure of our growing global presence in the sector to see two Irish entrepreneurs receive recognition on this year's list for their San Francisco based start-up, Stripe", said Anna Scally.
But I asked her if an Irish-based company might well find its way into the FinTech 100 list in the coming years?
"Yes, that is imminent. I believe an Irish company will enter the FinTech 100 soon - perhaps in the emerging category. Were that to happen it would give our FinTech sector even greater international exposure", she said.
And she continued: "It's vital, I believe, that we work with rather than against the strong FinTech sector in London. So many factors now make Ireland uniquely placed to become an international FinTech hub. Our financial services sector has recovered and our economy is growing strongly. Additionally, we have great financial services expertise and a very successful technology industry here. By establishing the FPAI we are sending a clear message to the world that Ireland is taking specific steps to develop our FinTech sector and assist its continued growth."
And Marc Coleman believes the potential for the FinTech sector here is immense - but says we need to focus more on certain markets.
"A report published by Asia Matters - "Unlocking Asia's potential for Ireland" - points out, Asia already accounts for one-quarter of global GDP, a share that should rise to half in the next three decades. And yet Ireland's share of overall trade is 6.2 percent. As an island nation, focusing on web-based internationally traded services makes a lot of sense as we can advance rapidly here."
And he concluded: "As several sources have stressed, Ireland needs to address a list of challenges to achieve full potential including the skills shortage. Changing the system of personal taxation to not only encourage (FinTech) entrepreneurs but incentivize high potential start-ups and help them achieve critical mass is also important. Here Britain is taking a strong lead and, while the recent Budget made a useful start on the right road, there is further to go."
This article was taken from The Sunday Business Post "Making Ireland a Fintech Hub" article on 24 January 2016 and is reproduced here with their kind permission.
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