The continued rise and success of the Irish Fintech market in 2020

September 23

2020 is, has been and is set to continue to be a challenging and disruptive time across most sectors and industries. However, within the area of Fintech, there has been a continued rise in terms of financial activity and investment going on within the sector.

According to recent figures from multinational professional services network KPMG, eight deals carried out within the industry in the first half of 2020 resulted in €278million being exchanged via mergers, acquisitions, venture capital funding rounds and private equity transactions showing a positive and buoyant sentiment within the market.

This figure represented a record period of activity for the sector and is a drastic contrast to what is being seen across most other sectors, both here and overseas. So, what exactly has contributed to Fintech’s continued rise within the Irish market, and what can we expect to see throughout the rest of 2020?

 

One, if not the, fastest-growing sectors within Financial Services…

There are roughly 37,000 professionals working within Financial Services here in Ireland, according to Enterprise Ireland’s most recent Ireland Fintech Census. This figure probably lies closer to 40,000 as we move through 2020. As of the time of the report, 7000 of those were involved in Fintech. These were employed by between 200-300 fintech businesses and this number was set to increase by 43% by the end of 2020.

Fintech is slowly but surely taking away from conventional banking, with global companies such as Revolut paving the way within financial tech, and continuous growth plans for further digitalization. Revolut has become such a phenomenon that according to Partner and Fintech lead at KPMG Anna Scally it has now become ‘’a verb which instructs the transfer of funds.’’ The KPMG figures also revealed that there is a surge ongoing in the wider tech and biotech sectors here in Ireland also. The Irish Venture Capital Association (IVA) Anne went on to mention massive deals secured by ‘’Prepaid Financial Services, Payzone and Fenergo’’ which have also contributed to the massive boost to Ireland’s Fintech scene.

 

Rules, regulations and the general Fintech landscape…

With the fintech landscape in Ireland being so diverse, from global players like Google, Visa and PayPal to homegrown success stories like Stripe and CurrencyFair, there is a need for certain rules and regulations which allow these operations to carry out their business while still keeping within certain legal parameters.  One positive aspect which seems to draw a lot of fintech companies to Ireland and allow start-ups to get going here is that there is Government supported funding available for these types of companies, as verified by legal giant A&L Goodbody’s ‘’The International Comparative Legal Guide to: Fintech 2019.’’ Enterprise Ireland is such an organisation which offers fintech companies several supports via its Competitive Start fund and its Innovative High Potential Start-Up Fund. There are also some lesser-known schemes available such as the Disruptive Technologies Innovation Fund which is particularly for disruptive technologies which transform businesses.

When it comes to cryptocurrencies in Ireland, while they are not subject to specific regulation in Ireland, they also do not have legal tender status. In fact, cryptocurrencies and crypto-assets should be subject to the existing regulatory frameworks which are in place such as the Fifth EU Anti-Money Laundering Directive. Ireland has also implemented certain Data Protection Legislation, Payment Services Regulation, Criminal Law and Regulatory Guidance in order to accommodate the unprecedented growth of Fintech in recent years.

 

It shows no signs of slowing down…

While other industries may be apprehensive of the following months/years following the pandemic, the growth in Fintech seems to just consistently be ramping up, rather than slowing down. Ireland is fast becoming a preferable base for fintech companies to Britain due to Brexit. So much so in fact that Mastercard even announced plans to use a new campus site in Leopardstown to grow its European technology hub. The pandemic has also nearly heightened the demand for fintech services, with businesses scrambling to adapt to digital payment methods to reduce virus transmission, if they did not have this option available previously. With COVID19 still firmly present in modern society, and the after-effects of such set to be for some time to come, the increase of remote working and carrying out tasks such as payment transactions digitally, means Fintech’s growth and prevalence is stronger than ever.

 

If you are interested in hearing more about any of the above or the clients we are working with within the Fintech space, please feel free to get in touch with me at the following contact details.

 

About the Author

Thomas Guilfoyle

Senior Consultant - Funds & Asset Management

tguilfoyle@lincoln.ie+353 1 661 0444

Insights

Increasing Diversity and Reducing Bias in the Workplace

Diversity and inclusion are now at the forefront of most organisations’ strategies for improvement and growth. Businesses everywhere are striving to be more inclusive of prospective employees in regards to gender, age, ethnicity, sexuality and more. In order to increase diversity and reduce bias, one must look at every stage of the hiring process, from … Continued

Insurance in the News

The reform of the Irish Insurance industry has, at last, began to take some shape. Campaigners have long been calling for the cost of motor and liability insurance renewals to be lowered. As well as the cost of insurance premiums being paid by customers being a cause for concern, so too has been the amounts … Continued

How to work successfully alongside a Recruiter

Looking for your next role can be a stressful and often overwhelming experience. That’s where recruitment agencies such as ourselves tend to come in to act as a partner in your talent search. While you may enlist our help, some people may be naïve to the world of recruitment, and so don’t know how best … Continued