Innovation in Ireland’s banking sector has been significantly impeded by insufficient government funding, according to a newly released report.
The study, titled Ireland’s Fintech Future, was commissioned by Financial Services Ireland (FSI), part of the banking lobby group Ibec. It identified limited state support as a major obstacle to the growth prospects of the country’s fintech landscape.
Notably, 72% of respondents indicated that there is inadequate funding for innovation, while 64% felt there is not enough financial support for growth. Additionally, the report highlighted skills shortages and regulatory compliance burdens as further challenges for the fintech sector.
Despite these hurdles, the study found a prevailing sense of optimism among the surveyed firms, particularly among startups. A remarkable 88% of new ventures anticipate increasing their revenue over the next few years, expecting an average growth of 72%. Similarly, established firms echoed this sentiment with 73% expecting revenue growth at an average of 17%. Furthermore, 70% of all fintech companies expect to increase their workforce in the near future.
FSI director Fiona Callan remarked, "The survey findings indicate that the sector is optimistic about its future, but it is clear that obstacles exist in Ireland for both emerging financial services firms and established companies that are undergoing digital transformation."
This report follows research from UK investment firm Finch Capital, which showed a 28% decline in funding for Irish fintechs in 2022, alongside a broader 70% drop in funding for fintechs throughout Europe.
Based on the survey’s insights, Financial Services Ireland has proposed several recommendations, including increased government funding to establish a fintech hub, unlocking a €1.5 billion surplus in the National Training Fund, and urging the Central Bank of Ireland to create a more streamlined regulatory framework.