Most businesses expect losses due to new financial technology

Over 70 per cent of Irish businesses expect revenue losses of up to 40 per cent over the coming years as a result of innovation in the financial technology (FinTech) sector.

A report from consultancy Price Waterhouse Cooper (PwC) shows that over three-quarters of Irish financial institutions expect to increase internal innovation efforts over the next three to five years. However, only 46 per cent admit they're good at commercialising those ideas.

IT security concerns rate highly among financial services firms with 58 per cent saying they plan to invest in cybersecurity in the year ahead - 26 percentage points above the global figure.

Regulatory hurdles were cited as barriers to innovation in the financial technology sector. Some 76 per cent of respondents said that anti-money laundering regulations were the greatest barrier.

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In terms of specific technologies, 20 per cent of those surveyed globally said they were investing in blockchain. Only 7 per cent in Ireland reported plans to adopt the technology while only 14 per cent said they were familiar with the technology.

The report, which was carried out in Spring 2017 and surveyed over 1,300 business leaders, 50 of whom were in Ireland, ultimately says that Irish firms are less likely to respond to many of the emerging trends for specific industries.

John Murphy, a partner at PwC, said: "With new business models, the pace of change in financial services seems only to be increasing.

“In the future, customers will be forced to make financial decisions based on a combination of artificial intelligence, even greater automation, less human intervention and new payment options.

“The survey confirms that FinTech in Ireland is having a growing influence on financial services and the long-term potential is even greater.”