Ireland’s technology and finance sectors have long been going from strength to strength with major global players either originating or setting up in the country, and the financial technology (fintech) and regulatory technology (regtech) sectors are no exception.
"We've seen some fantastic businesses start up from people's bedrooms," says Conor Flynn, chief information security officer, Waystone.
“The strong tech sector here allows people to get very good training and exposure to technology,” says Flynn. “We’re at the leading edge of what’s happening with cloud platforms and cryptography, with all the areas that build the grounding for the fintech sector.”
In addition, he says the establishment of the IFSC – which brought a large number of global funds companies and banking organisations to Ireland – created a strong financial services employment base here. “So the two of those sectors coming together, the move toward cloud technology, and the establishment of global players from local businesses, is another example of the coming together of tech and finance knowhow.”
Some of the reasons for the sectors' success, says Keith Waine, partner, Dillon Eustace, are the strength of existing tech and financial industries which are a source of business and talent; the availability of a young, educated, English-speaking, and multi-lingual workforce, a favourable business and tax environment, access to Europe and easy access to capital. "Enterprise Ireland and the IDA provide significant financial and practical supports to Irish firms expanding abroad and to international firms looking to set up in Ireland.
“If we exclude Stripe, perhaps the biggest Irish success stories to date in this area have been regtech firms such as Fenergo, Corlytics, and AQMetrics,” says Waine. “More recently, we are seeing firms like Sekuritance offering regtech services to a booming crypto-asset industry.”
While the future is bright for the industry, finding the right people will be one of the key challenges for both sectors.
“Finding and retaining talent is increasingly difficult but that also applies to the broader financial and tech industries,” says Waine. “For regulated firms, a particular challenge is finding suitably qualified compliance professionals who understand the industry and who have the experience and credentials required to be approved by the Central Bank of Ireland.”
“As the businesses grow, we only have a small pool of people in the country, and rely on people from other countries to come and work here,” says Flynn. “We need to enable that, with visa programmes and other supports.” He says that the market is a competitive place for talent, particularly for start-ups trying to compete with global tech companies. “Look at TikTok who arrived two years ago already has 2,000 staff. It came in with State-supported employment creation, and has the ability to offer phenomenal packages even at the start of a career.
“For a start-up, a founder will give time and sweat equity but if you’re trying to hire people, it’s difficult because of the opportunities for high income from some of these global companies.” However, he said it creates ingenuity when offering packages, such as giving staff a bigger slice of equity.
Flynn says the focus of investors who get in at angel investor level, second round, or Series A round levels, is on start-ups who show maturity for data governance, information security and data protection. “If you try too hard at the tech and then bolt on data governance, data protection or information security later, it can often mean massive re-engineering, and sometimes it will never sit right.”
He says investors want to see an appetite within start-ups to do it right from the beginning, which creates a solid foundation for those organisations to “build and scale out without having to pay a lot of money to go back and re-engineer their environment”.
Internationally, the future looks bright for this industry and Ireland has a clear opportunity to position itself as one of the world’s leading centres, says Waine. “There is no doubt that the industry has seen a Brexit dividend and successful UK firms will continue to look to Ireland to establish an EU hub.”