Structured environment key to continued growth
In March 2024, the Government gave its formal backing to industry proposals for a hub in its Update to Ireland for Finance: Action Plan 2024 strategy document. 'Assessing the proposal for the establishment of a national fintech hub' was among six deliverables contained in the fintech and digital finance section.
'It is envisaged that the hub could be a natural landing space for multinational firms in the early stage of their entry to the Irish market, while also going a long way to addressing some of the challenges faced by indigenous firms on their digital transformation journey,' the document stated.
Roll on seven months to October, 2024 and Ibec industry body Financial Services Ireland (FSI) put forward its vision for the hub which it said would help Irish fintech firms compete in the sector on a global scale and would cost €13.5 million over five years to operate. The FSI proposal was for a hub occupying between 10,000sq m and 50,000sq m of space in Dublin city centre. The capital was chosen 'due to its proximity to the headquarters of major financial services and technology firms and its easy connectivity for international visitors.'.
Two months later, the new programme for government included a commitment to collaborate with industry on the establishment of a national fintech hub.
The need for such a hub is undeniable, according to Ian Nelson, partner and head of financial services and regulatory with KPMG in Ireland. 'Ireland's financial services sector is a fundamental part of the national economy, employing thousands of people and contributes significant value to society,' he points out.
Ian Nelson, partner and head of financial services and regulatory with KPMG in Ireland.
'With the global fintech industry continuing to expand rapidly, Ireland must position itself as a leading innovator to remain competitive. A dedicated fintech hub would provide a structured environment for start-ups, scale-ups, regulators and established financial institutions to collaborate, innovate, and drive technological transformation. It would also help in providing a mechanism for firms to access funding, talent and market intelligence.' The fintech hub could potentially serve as a physical and virtual centre for innovation, collaboration, and commercialisation, says Nelsonhe continues.
'Potential roles and associated activities could include co-working space for fintech start-ups and other businesses; innovation labs for testing, piloting and launching new technologies and sandboxes; regular networking events, workshops, and development sessions to foster idea exchange; potential access to mentoring, venture capital, and broader international market linkages; collaboration opportunities with regulators, academia, and corporates; and training and upskilling programmes tailored to fintech needs.'
He envisages multiple benefits flowing from the hub, including stimulating innovation and entrepreneurship in financial services and enhancing Ireland's international competitiveness as a fintech destination. It would also help to 'attract and retain high-skill talent, provide a centralised support system for emerging fintechs, enable further regulatory clarity and faster go-to-market strategies through collaboration with regulators, and encourage foreign direct investment and boost Ireland's start-up ecosystem,' he adds.
Nelson favours Dublin as a location – with a regional dimension – and believes cost should not be an issue.
'While the exact location would need to be determined through a feasibility studies and assessments, Dublin would be a potential choice due to its existing fintech cluster and infrastructure,' he says. 'However, regional presence and outreach will be essential to ensure national impact. The hub should be driven by government, trade agencies and industry on a combined basis. The cost is hard to estimate but international benchmarks would imply that sensible investment will pay for itself many times over.'
With broad agreement from industry and Government on the need for a hub, it seems the only question now is when it will happen. Sadly, there is little clarity at present. In a written answer to a DáilDail question on May 29th last, Finance Minister for Finance Paschal Donohoe noted the commitment in the programme for government and said: 'Department of Finance officials are carrying out research and continue to engage with industry in exploring the possibilities for a National Fintech Hub.' No hard and fast commitments there, then.
Nelson takes an optimistic view: 'Given that the expected feasibility study would be completed this year, a realistic timeline for launching a national fintech hub would be 18-24 months from now,' he says. 'An initial pilot or virtual hub model could be up and running sooner – potentially within 12 months – providing early value while the full physical infrastructure is being developed.'
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