The Dublin Web Summit brings together the world’s leading tech players recognizing Ireland’s key place in the global ICT industry. What you may not be aware off is that Ireland plays a significant role in another global industry – International Financial Services. Many of the worlds leading financial services firms like Citi, Deutsche Bank, State Street, Prudential, MetLife, Fidelity, Bank of America, JP Morgan and Aon are also leveraging Ireland’s world class technology eco-system to deliver solutions around cyber-security, data analytics, anti-money laundering, payments & mobile banking. In all over 220 international firms employ 33,000 people across banking, payments, insurance and investment management.
Technology and Financial Services - Opportunities Abound
From the earliest adding machines to mainframe computers, technology has played a key role in the evolution of the industry. Complexity and data is at the heart of financial services but so too is security and regulatory requirements - a difficult matrix of competing priorities which makes the Silicon Valley / Facebook mantra of ‘move fast and break things’ a challenge. The IT functions in banking, insurance & investment management have evolved overtime to support a diverse range of legacy accounting systems and platforms. This environment has meant an ever-increasing technology spend to both maintain and retrofit these systems – a difficult balancing act in the ‘Great Recession’ which saw the industry severely impacted. The dilemma facing these firms is that while their margins and profitability have contracted, their stakeholders (consumers, clients & indeed regulators) have come to expect the same level of speed, convenience and interaction found from companies they deal with every day companies such as Apple, Amazon and Google. The industry recognises this consumer led demand and is embarking on a sustained level of technology spend unprecedented in its history to deliver a service that is commensurate with the digital age.
This transformation will require substantially more investment than current spending levels and once completed will involve a new landscape of both incumbents and disrupters. Established global players with operations in Ireland like Citi, Fidelity, MasterCard and Aon are successfully adapting to this new environment leveraging the technology ecosystem in Ireland. The CitiDirect BE mobile platform (which was developed in Citi’s 400 person strong Dublin Innovation Lab) is an example of what happens when existing players of Citi’s scale embrace digital innovation - Citi’s CEO Michael Corbart acknowledging its significance:
“A product of our innovation lab in Ireland, this platform is now operational in 90 countries and 16 languages, and is compatible with more than 50 devices. In its first eight months of operation, the platform moved $1 billion. Last year that number rose to $115 billion. In January of this year alone, we've already processed $25 billion in payments through mobile phones. And we've noticed that flows from our clients that use CitiDirect BE Mobile are growing at three times the rate of the firm-wide average for all our clients”
Likewise, as the chart above shows, early stage financing has risen to address the scale of the opportunity in FinTech with ever increasing investment flows targeting start-ups that can assist existing players in this digital modernization while also funding those that aim to disrupt existing business verticals. Opportunities abound in the areas of crypto-currency, algorithmic trading, mobile/online payments, peer-to-peer lending, market data analytics & sentiment mining. Companies like Dublin start-up Polar Lake, recently acquired by Bloomberg, show established players are only too happy to acquire cutting edge capability (and provide big exits at the same time). The next few years will see ever increasing investment in the FinTech space that will drive the nature and shape of the financial services industry for decades to come with the size of the opportunity met equally by the magnitude of the challenge.
Why not drop by the IDA breakfast each morning of Websummit from 8-11am to grab a coffee, network and plan your day ahead!