Start-ups working in the financial services sector have a greater trust credibility gap to overcome than most early-stage companies, delegates at a conference in Dublin were told on Thursday.
Speaking at the inaugural 'Fintech Nation' event held in the Marker Hotel, Derek Butler, chief executive of Irish peer-to-peer finance firm Grid Finance, said financial technology firms had to work that bit harder to win over businesses and consumers.
“You’re dealing with money and tech and combining those things together means it takes much longer for people to believe in what you’re doing and to have trust in you,” he said.
“You also have to get to a certain scale and get your numbers as big as is possible to become a commercially very significant businesses, Mr Butler added.
Grid Finance was one of a number of Irish fintech start-ups to take part in the conference, which was organised by the Fintech and Payments Association of Ireland (FPAI).
Irish fintech firms are making waves globally with firms such as Stripe, Trustev, CurrencyFair, Realex and Fenergo achieving widespread success overseas. Ireland is also seen as a possible fintech hub with Deloitte last year forecasting that as many as 5,000 related-jobs could be created here over the next five years.
Mr Butler said he could envisage a world in which fintech firms would be independent of the traditional banking system. He said though that the rules around regulations would remain with regulatory bodies still having an important role still to play in terms of protecting consumers and setting standards.
Many of the start-ups appearing at the FPAI event spoke of long delays in getting to market because of regulatory delays, with it taking around nine months on average to get approval to launch services.
Fire Financial Services, a company established by Realex founder Colm Lyon, which this week announced it had processed €4 million worth of transactions in the year-to-date, was one of the start-ups to describe the difficulties they faced dealing with regulatory authorities.
"It was an onerous journey and the best thing the Irish regulator could do is to make things easier is to try and catch up with the British regulator which has much more success in backing fintech firms," said Owen O Byrne, head of product at Fire.
“It’s really about the regulatory authorities here being given additional resources and about them making the whole process clearer to encourage start-ups to get regulated. It’s never going to be an easy ride to regulation but if there is the support out there then it can be done,” he told The Irish Times.
Rubicoin, which was informed by Apple this week that it is now ranked as the number one investment app in the tech giant's US AppStore, said it is enjoying considerable success in North America. It is now in the process of rolling out its services to consumers in other regions.
"Every jurisdiction has its own regulatory environment and you need to be sure you're obeying the rules and convince the authorities of this and it can take considerable time," Emmet Savage, Rubicoin's co-founder told The Irish Times.
“The regulator plays a critical role though, creating barriers for entry in some instances, but also keeping everybody even,” he added.