Ireland's 2018 Action Plan under the IFS2020 Strategy is underway. Originally launched in March 2015, IFS2020 aims to develop and grow Ireland as a leading international financial services (IFS) hub by building on Ireland's strengths, including innovative technologies, ease of doing business, compliance, governance and data analytics.1 The 2018 Action Plan seeks to improve Ireland's operating environment and further increase its competitiveness in IFS and attractiveness to foreign investors.2
The following are five key aspects of Ireland's 2018 Action Plan that will help shape the country's overall IFS2020 Strategy.
1. Development of a strategic, prioritized approach to Brexit
Key insights
- One of the 2018 Action Plan's key areas of focus is Brexit due Ireland's strong trade relations with the UK, and the potential for IFS companies to choose to base their business in Ireland rather than the UK
- Building on its reputation as a high-tech, innovation-focused economy, Ireland is targeting fintech growth at a time when technology is increasingly setting the global finance agenda
- With this government-led business development program, Ireland will aim to boost its IFS market by targeting overseas IFS firms and Asian financial institutions, a strategy that could see an increase in IFS business to Ireland
Brexit has created uncertainty in financial markets across the world. Given Ireland's close economic relations with the UK, the Irish government has been preparing for Brexit with a comprehensive government response.3 However, as part of its strategic priority to "promote Ireland for international financial services and world class innovative products and services," the Irish Department of Finance will continue its preparations by developing a strategic and prioritized approach to the implications of Brexit on IFS.4
This important task will be carried out by an existing public sector financial services sub-group that reports to Ireland's Department of Finance. Brexit will likely see IFS concentration move away from the UK, which could have a significant impact on Ireland's financial services industry, including IFS.
2. Promotion of Ireland as a location for foreign direct investment to IFS firms
This key aim sees Irish agency IDA Ireland working at home and with stakeholders abroad to attract foreign direct investment from overseas IFS companies. Attracting foreign investors is one of the cornerstones of the entire IFS2020 Strategy, further to its goals of job creation goals and for the wider growth and development of the IFS sector in Ireland. The strategy is resulting in success. For example, the Depository Trust & Clearing Corporation (DTCC), "the premier post-trade market infrastructure for the global financial services industry"5 recently announced that it intends to open a new office in Dublin. Michael D'Arcy TD, Minister of State for Financial Services and Insurance commented that, “The Government will continue to work closely with the industry to implement the IFS2020 Strategy in its aim to promote Ireland as the European location of choice for specialization and innovation in financial services."6
3. Research on the opportunities for Ireland's financial services sector within Asian financial institutions
With Asia's dynamic economies and burgeoning financial industry, as well as commitments to alternative finance from countries such as China, Ireland views Asia as a region filled with potential for its own IFS sector.7 The research carried out as part of the 2018 Action Plan will focus on niche sectors of opportunity for possible investment from Asian financial institutions, and promote Ireland's current position as a key provider of IFS within the European Union.
4. Promotion of market diversity, prioritizing fintech and payments in well-defined markets
Acutely aware of the importance of a broad range of IFS services, Ireland will provide support to companies in order to promote IFS vertical diversification. Fintech and remittances in well-defined markets will be given priority, such is their importance in financial and banking development today. Ireland aims to boost its IFS sector by nurturing and developing business partnerships, with a focus on the Americas, the MENA region, and Asia, as well as a renewed focus on the UK.Further, fintech investment in Ireland is rising sharply and IFS2020 wants to build on this momentum.8 The 2018 Action Plan will identify the most important fintech events for ministerial or high-level involvement to further boost the Irish fintech space.
5. Provision of a dedicated fund for fintech startups
In a further sign of the country's commitment to fintech, government agency Enterprise Ireland will supply up to EUR 500,000 for an early-stage investment fund, dedicated exclusively to fintech startups based in Ireland. The aim is to fund 10 early-stage fintech startups complemented by mentoring and training, with the help of business and education sector partners.
In focus: Ireland's robust plan
Ireland is ready to take its IFS section to new heights. In designing the 2018 Action Plan, the Irish government has made clear its intention for Ireland to be "a leading global location for specialist international financial services."9 In full expectation of growing the country's IFS sector - to a possible "significant extent", according to Irish Finance Minister Michael D'Arcy - the Central Bank of Ireland has hired more employees. D'Arcy also highlights the Central Bank's commitment to financial innovation and efficiency, while maintaining rigorous standards of compliance.
With the clock ticking to the UK's withdrawal from the European Union on March 29, 2019,10 the 2018 Action Plan places Brexit front and centre as a priority for which to prepare. Elsewhere, it aims to build on the success of the 2015–2017 Strategy and leverage the strong platform afforded it by Ireland's already advanced financial ecosystem. With the 2018 Action Plan, Ireland continues to position itself as a world- class IFS location.