Ireland has transformed itself into a leading global provider of financial services since the launch of the IFSC in Dublin just over 30 years ago, writes Kyran Fitzgerald.
There are now more than 200 foreign multinational firms with bases here while the country is also home to over 200 Irish owned international services firms.
One of the best known as well as longest established indigenous firms is Fexco, based in Killorglin, south Kerry, a town that has played host to Puck Fair for many decades.
The firm was founded in 1981 by Brian McCarthy and it employs more than 2,300 people around the world.
Around six months ago, Fexco announced the creation of 175 new jobs in Kerry over the next three years, jobs in engineering, software and sales. The expansion is being backed by Enterprise Ireland.
It is now one the world’s leading FinTech companies providing an extensive suite of payments as well as foreign exchange products.
Over the years, some of the best known names in finance have established bases in the regions.
In the 1980s and early 1990s, GPA rose to become the leading global player in aviation leading operating out of a base in Shannon.
The group was taken over by GE following a failed attempt at a flotation, but it spawned an industry, as former GPA executives set up their own aircraft leasing operations.
The current Minister of State for Financial Services is Michael D’Arcy, a Co Wexford based Fine Gael TD. His Department has identified six main priority areas for the development of the sector.
These include the promotion of Irish regions as financial centres along with the development of broader financial infrastructure.
In 2015, the Government launched an international financial services strategy known as ‘IFS2020’ with the aim of creating up to ten thousand net new jobs over the following five years.
More than 200 Irish owned firms now find themselves at the cutting edge of innovation in payments and other financial technologies.
There are 25 payments companies alone in the country while more than 1,800 people are employed directly by leading firms.
Alongside IFS2020, the State funded skills development body, Skillnet Ireland — which sponsors collaborative training involving enterprises and trade unions — has also launched a 2020 strategy for the financial sector.
Since 2015, more than €5m has been invested in training for firms and employees in the sector by Skillnet companies.
The IDA has come under pressure from the politicians to invest the flow of foreign direct investment into the regions and it has enjoyed particular success in areas of manufacturing such as pharmaceuticals and biotech.
The agency itself is working on a new five year strategy that takes into account the rapid changes in the nature of work, with the shift away from low skill jobs such as back office work and basic manufacture. The focus will be on preparing people for careers in which artificial intelligence and robotics play a much bigger part.
In the meantime, the regions are continuing to benefit from IDA sponsored international FDI.
Recent examples include Deutsche Borse which is adding 200 positions at its growing funds business in Cork where it operates through a subsidiary,
Clearstream Global Securities Services. Around 375 people are currently employed by Clearstream near Cork Airport.
However, the operation is being relocated to the new Navigation Square complex shortly.
The company provides mutual funds custodian services for around 60 major financial institutions.
Elsewhere, another international financial services company, Alter Domus, opened its second Irish office in Cork in 2017. Its main businesses are aircraft leasing, private equity, real estate and debt.
It is currently filling roles in Cork for accountants and senior officers who will play a role in the initial set up of funds, liaising with specialists and taking care of the day to day operations of funds.
US based BNY Mellon has set up offices in Dublin, Cork and Wexford providing services in asset management, funds administration and servicing.
The nature of finance is changing dramatically with the rise of digital providers.
Financial technology, or Fintech has emerged as a sector in its own right and enjoying rapid growth.
IDA Ireland has secured key investments from such US industry leaders as Stripe, Yapstone and Equifax , according to solicitors A& L Goodbody in a recent survey.
Enterprise Ireland has a dedicated FinTech team which manages over 220 companies. Home grown successes include — Future Finance and Fenergo, which focuses on regulatory compliance and efforts to combat money laundering.
Future Finance recently raised $317m, while Fenergo has raised $80m.
Homegrown successes include the Kilkenny based specialist, TransferMate, which provides international ‘business to business’ solutions. Its payment systems are licensed in all US states.
Clearly the situation in the light of Brexit is a highly dynamic one with many companies reassessing their operations and many UK companies ramping up Irish businesses in order to retain EU passporting rights allowing them to operate across the European Union with freedom.
The regions are pitching to benefit from overspill effects while pointing to lower costs in key areas such as housing and commuting.
The leading provincial cities are moving to ease local commercial property constraints.
Estate agents CBRE have pointed to continued momentum in the commercial property market in Cork with strong interest in assets.
Several new schemes are planned or have commenced, in particular in docklands, Mahon, the city centre & close to the railway station.
A €100m office scheme is due to get underway in Galway — where suitable space is in short supply — this Spring.
Limerick has announced an ambitious renewal programme, Limerick 2030, with up to 3,000 due to be employed at the Opera site over the next six years. A clear pitch is being made to incoming international services companies.
Two of the country’s top ten VC investors are based in Cork — namely Kernel Capital and SOSV.
Kernel was founded in 1999. It has offices in Cork, Dublin and Belfast. To date, it has invested in companies such as Pilot Photonics and Altratech.
SOSV, with offices in Cork and Princeton, New Jersey, its HQ, has $300m in assets under management. SOSV was founded by the technology entrepreneur Sean O’Sullivan.
And according to media reports, it is one of the most active firms in the world in the financing of startups. SOSV recently made more than €30m from the sale of a 20% stake in a bike-sharing company. It moved part of its business from Cork to London recently.
The clear message is that suitable infrastructure is being put in place within the regions to attract high level investment.
Leading accounting firms have been beefing up their main regional offices while many leading local professional firms are in expansion mode.
Third level institutions are playing their part, with UCC having opened its new Centre for Executive Education in the heart of the city at Lapps Quay in November.
Over the long term, €100m is being invested in an expansion in its business school. However, the other regional educational institutions are also playing their part in ensuring greater availability of local talent with suitable skills.