Disruptive technology ‘critical’ for new finance jobs

Ireland’s ability to embrace disruptive technology and attract key people will be “critical” factors that will determine if the international financial services industry here can meet the Government’s target of creating 10,000 net new IFS jobs by 2020, a report by Deloitte has found.

Called ‘Waves of Disruption: The Future of Ireland’s Financial Services Sector’, the report said technological developments would have the most “transformative effect” on IFS in Ireland.

Examples include machine learning and artificial intelligence, which will lead to the robotisation of work, and blockchain technology that will challenge traditional technology platforms.

Deloitte said the rate of disruption would increase, given the pace of technological advancements, which would also become more affordable.

As a result, premium financial services will be made accessible to a greater portion of the population, while at the same time opening up the industry to new players.

Deloitte has predicted significant disruption will occur in retail banking, fund management, payments, and insurance in Ireland but expects growth to occur in payments, regtech, cyber and aircraft leasing.

“Ireland will, with the right focus, gravitate towards specific IFS sectors such as payments, regtech, cyber and aircraft leasing where significant capability and potential exists to become a global centre of excellence,” the report said.

Tax initiatives

It said corporation tax rate alone would not be a key driver of innovation and that the regulatory environment would struggle to keep pace with the rate of innovation.

“Emerging tax initiatives such as Knowledge Box, research and development tax credits, and the EU BEPS [base erosion and profit shifting] proposals will shape the new tax landscape for IFS.”

Deloitte forecast that the number of back-office roles in Ireland would reduce but found that new business models would create opportunities for Ireland.

It said the worst case scenario for Ireland’s IFS industry was a situation where the industry becomes significantly disrupted by new entrants but limited talent restricts FinTech growth, leading to a reduction in employments levels.

The best case scenario was one that sees disruption continue and talent availability increase leading to further innovation, investment and next- generation technologies being deployed systematically.

David Dalton, head of financial services at Deloitte, said attracting the right talent would be the key issue for Ireland to thrive in IFS.

“We will need to punch above our weight in producing numbers of suitable graduates, and also, given our size, attracting skilled people from abroad,” he said.

Deloitte said Ireland needs to increase its overall volume of STEM graduates, in addition to attracting top talent from abroad.