The global FinTech sector has experienced rapid growth with the investment in FinTech start-ups resulting in the introduction of niche technologies producing unique service offerings tailored to specific consumer and business needs. Successful entities have benefited greatly from Government support while the existing large payment sector players are choosing to adapt and work alongside these start-up enterprises with a view to embracing their model and supporting their innovative approach by supporting “incubators” to nurture start-up entities through their early stage development. Such initiatives have in many instances also received the support of Financial Regulators such as the approach adopted by the UK Financial Conduct Authority “FCA” who have played a key role in ensuring a practical approach to complex financial regulatory compliance obligations which for these low risk classified start-up Companies can prove to be a major hurdle.
Incubators have to date provided startups with invaluable support through mentoring, support services, stakeholder connections and investment in research and development. Developing, testing and researching is key to assessing any opportunity with new ideas taking an average of 100 days to pass through innovation funnels such as that at Visa. Dublin has long been renowned for its commitment to investment and ability to attract research and development opportunities while the Irish English speaking labour force has achieved global recognition for its high degree of skill and expertise in areas such as technology and finance and support services such as IT hosting. The rapid innovation in the FinTech sector presents the perfect opportunity for Ireland to become a significant hub for attracting the high potential FinTech Companies. Ireland has successfully attracted technology giants such as Facebook, Google and Airbnb however it has been noted to “lag behind” in its ability to attract and nurture FinTech Companies by failing to adopt a “joined up strategy” that would encompass private business, Government Agencies and the Regulatory Authorities.
In a recent interview David Page, Innovation Partner at Visa Europe Collab outlined his views on the important role of FinTech incubators and indicated where the emerging European capitals of FinTech were located. According to Page the established innovation hubs include London, Berlin, and Tel Aviv noting that London has being highly successful in becoming recognised as one of the global capitals for FinTech innovation supported by its practical approach to financial regulation, strong startup community in Tech City, early-stage investors and government support allowing new FinTech businesses to thrive. Israel is widely considered to be the ‘startup nation’, with more startups per capita than any other region globally while Berlin which is seen as slightly different as “a creativity hotspot”. Stockholm is becoming the FinTech capital in the Nordics while there are some exciting startups coming out of Barcelona. This trend indicates the significant opportunity for Ireland, in particular Dublin, to join this innovation race and become one of the leading FinTech capitals in the world.
The strong FinTech incubator presence in London, Tel Aviv, Stockholm and Berlin demonstrates the significant opportunity for Dublin (as well as Cork, Limerick, Galway and our cousins in the north - Belfast) to attract high potential start-up FinTech businesses however, if this is to be achieved the approach taken by the government and regulatory authorities will be a major factor in determining if Ireland will indeed be successful in joining in the emergence of this truly innovative FinTech race which is transforming the way global citizens pay for goods and services by exploring technologies to innovate the payments sector.