Joe Lavelle ([email protected]) writes on Fintech incubators and opportunities for Ireland for www.fintechireland.com.  A chartered account and payments sector regulatory consultant, Joe  specialises in successfully establishing FinTech entities in Ireland, the UK and Malta as authorised financial institutions .

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.

www.fintechireland.com

Thomas Bullman ([email protected]) of www.madinks.ie, winner of the Eircom Spider Award 2014 for Digital Retail Excellence writes on disruption.

In a recent article published on www.bbc.co.uk Sir Richard Branson openly admitted to being a difficult employee. He puts this down to the fact that he is a "disruptive talent", a new breed of employee that is provocative and relentless. Martyn Sakol, managing partner of OE Cam, says that a person with disruptive talent has a multitude of positive attributes that they can bring to a business.

"I would define disruptive talent as individuals who think and act differently, innovate, challenge conventional wisdom, spot trends, see commercial opportunities, and tenaciously find ways to achieve success," he says.

Clearly Sir Richard Branson and Martyn Sakol are fans of disruptive talent, but could it be possible to build an entire industry on disruptive talent?

It may sound like building an industry on "disruptive talent" is a clear recipe for disaster but Ireland has seen this as a clear recipe for success.

At the heart of the success of the fintech industry is the ability of a company to harness the power of the internet to disrupt the financial industry. Cost reduction, enhanced customer experience, technological efficiency for the retail and institutional marketplace are the focus of this disruption. In order for an industry to disrupt it needs to be based on disruptive talent, something Ireland appears to be rich in.

In April, JP Morgan CEO Jamie Dimon was quoted in a letter to shareholders, stating, "Silicon Valley is coming ... There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking." Although this was a warning call across the bow of Wall Street we can see that the same is happening in Ireland. Deloitte recently published a survey stating that Ireland could create 5,000 fintech jobs by 2020. Accelerators such as the FinTech Innovation Lab are actively seeking fintech startups. And where will those jobs be created? Asset management, payments, mobile banking, fx and a host of other areas.In the past month alone we can see job creation at fintech firms such as Numerix, ProSeeder, Pramerica, and Abtran.

As a fintech centre Ireland has plenty of talent, talent necessary to disrupt the financial industry. But more than this Ireland has the right balance of location, cost, language skills, support services such as audit and compliance, and a very strong traditional financial services hub.

As part of a series of articles www.fintechireland.com will look at the best disruptive talent and the best disruptive technology startups in Ireland right now.   And follow us on twitter at @fintechireland

This was first published June 29, 2015 by Adrian Marples of Alternatives Elect.  Our thanks to Adrian for allowing us to upload this informative piece on fintech.

After years of one-way traffic, the Irish Financial Services & Fintech outlook for 2015 is promising. Senior Irish financial executives, and bankers in particular, are returning to Dublin. They will face a changed landscape with recent employment headlines centred all too often around the proliferating FinTech sector, or larger firms using Ireland for a data or cyber security hub.

However, the tide across the more traditional financial services sector is turning. Credit Suisse is currently seeking regulatory approval in Dublin ahead of relocating its European prime services business from London. This is major news for Dublin. This is a significant, risk-taking business, a world away from the back office operations which have become the mainstay that populate the banks of the Liffey. Whilst Credit Suisse’s competitors will been watching this closely, many of them are already quietly moving other roles to Dublin, some of them much further up the value chain, under the radar on a piecemeal basis.

For well compensated Irish expats in particular, these developments present opportunities to return home.  There is an increase in senior financial services talent returning to Dublin for the first time since the crisis. Senior bankers can now return to Ireland without suffering the eye-watering pay cuts that were on offer a couple of years ago.

Earlier this year, the Irish government outlined an initiative to increase jobs in the IFSC by 10,000 within 5 years. Dublin has slipped drastically in rankings compiled for the Global Financial Centres Index, from 10th in 2009 to 70th in 2014. The flight of banks like Commerzbank and Goldman Sachs during the recession years didn’t help Ireland’s ability to lure marquee talent to the docklands.

Banks are now under intense pressure to cut costs in the face of increased regulation and lower profits from their investment banking arms. Many international banks already have a presence in Ireland, either for tax reasons or to house their fund administration businesses, so logistics are considered favourable.

Ireland presents a strong proposition for financial services firms. We occupy the same strategically important time zone as London and there is a much vaunted, well educated, English speaking work force. Critically, there are much lower real estate and labour costs than competitor banking hubs.

There are other pressures causing the return in demand for talent: a skills shortage exists, particular in the regulatory space, as firms adapt to the rigours of the Single Supervisory Mechanism. Both domestic and international banks will pay a premium for experience gained outside Ireland across risk, analytics, cyber security, audit and compliance.

Whilst it remains to be seen whether other international banks follow the bold steps of Credit Suisse, the prospects for the FinTech sector look altogether more assured. A combination of factors, such as legacy technology issues and regulatory headaches for mainstream financial services firms, are causing bountiful opportunities to firms operating in this sector right now. Looking to the future, there is also the widespread expectation that a new generation of customers will gradually turn away from one-stop shops and opt for single channel providers for their financial products.

From a talent perspective the challenge for these firms will be to mature from a strong technology proposition to a more wholly structured and institutionalized business. As businesses mature, there will be a requirement for fresh talent to populate new CEO / COO positions as firms adjust to the operational demands which come with scale, whilst a Commercial Director will be required to drive sales in new markets.

After several years where compliance and non-core businesses dominated the agenda we can hopefully look forward to a new era of growth across both the traditional financial services and Fin Tech industry. The shadow of the regulator will never be far away but current trends suggest significant cause for optimism.

www.fintechireland.com

Great article in the Irish Independent (26 July) about Dogpatch Labs [@dogpatchlabs] partnering with Ulster Bank [@UlsterBank] in a project which will see the Ulster Bank Innovations team base itself in the technology start-up hub. The Bank’s Innovations team will form part of the 8,000 square feet expansion of Dogpatch Labs into the vaults of the historic CHQ building in Dublin, Ireland. The Bank’s staff will work side-by-side in open plan office space with ‘some of Ireland's most innovative and potentially lucrative technology start-ups in Dogpatch's open-plan offices’.

The deal will also allow Dogpatch Labs expand significantly, providing new office space, meeting rooms and a dedicated event space into the vaults of the CHQ building. Dogpatch Labs is home to the likes of Irish company Intercom, which raised $23 million in funding earlier this year, and IDA backed Udemy, which raised $65 million of funding in June.

Why is Ulster Bank getting involved?  Well according to Maeve McMahon, director of customer experience and innovation at Ulster Bank, the partnership is "a really exciting and interesting collaboration", and is as much about the bank learning from start-ups that are disrupting the traditional financial services market as it is cornering the potentially lucrative financial technology (FinTech) start-up market.

"There is also an obvious commerciality to this venture for us, and we have a very good high potential start-up package in Ulster Bank that we can make available to these companies. By being based here and working side by side with them we can understand better what they do and can potentially back them as companies with expansion capital", she said.

Patrick Walsh [@pwlsh], co-owner of Dogpatch Labs says that Ulster Bank was the right bank for the co-working space to partner with because it "understood the vision and is open to innovation", but also because the bank is part of the International Bank One Solution (IBOS) group.

"The whole point of FinTech start-ups is to scale outside of Ireland. The ability to plug into an international banking network through RBS in the UK, but also through their IBOS partners like Silicon Valley Bank in the US, is invaluable. We couldn't get with another bank in Ireland", he said.

Hugo Mahony, Business Development lead with Dogpatch, added that in the coming months Ulster Bank will launch "the 'FinTech Fireside Chat Series', featuring some of the leading names in Irish tech today".

Fintech Ireland [@fintechireland / @oakeslaw] meet both Patrick Walsh and Hugo Mahony a little while ago and we have to say how impressed we were with not only their enthusiasm and business acumen but in particular their genuine commitment to fintech and startups.  If you haven’t checked out Dogpatch Labs, do yourself a favour and follow them on twitter and visit the website at http://www.dogpatchlabs.com

http://www.independent.ie/business/technology/news/ulster-bank-and-dogpatch-labs-break-into-vaults-31404001.html