A lack of government support for growth and innovation has been identified as a major barrier to expansion in the financial technology, or fintech, sector in a report carried out by Ibec group Financial Services Ireland.
Fintech is defined as the use of new technology to improve and automate the delivery and use of financial services.
The study examines developments in the sector and as part of it, Amárach Research surveyed a range of firms, from long established companies in the financial services sector – who are adapting product delivery to meet the demands of the digital age – to fintech start ups.
Both categories said government support for growth and innovation was lacking.
Among established financial services enterprises, “regulations governing the financial sector” was the most commonly identified challenge followed by skills shortages and staff costs.
For newly-established fintechs, the biggest challenge was sourcing skilled workers followed by regulations.
Despite the challenges, companies operating in the sector were optimistic about the growth outlook as well as staffing intentions.
86% of start-ups said they expected to grow turnover in the coming years with the average expected growth in excess of 72%.
Among established firms, 73% were expecting expansion in turnover with average expected growth of 17%.
70% said of all firms said they expected to increase headcount over the coming years, despite the challenge in sourcing adequate skills.
The report recommends the establishment of a ‘fintech hub’ to enhance the development of new fintech firms, while also fostering collaboration and the sharing of knowledge about financial services technology.