Financial Services Ireland

Since the global financial crisis of 2008, the Irish economy has staged a remarkable recovery. The financial services industry has participated in this recovery, rebounding and growing with high levels of inward investment.

Ireland today has a solid foundation in place to facilitate the continued success of Financial Services. Considering this, we asked the sector leaders in EY, Cormac Murphy, James Maher and Fergus McNally to share their perspectives on some of the key future themes and trends within each sector and importantly how each of their sectors can play a role in Ireland’s economic recovery and growth post-pandemic.

Achieving Ireland’s ambition for financial services over the next three years

The Irish Government has long recognised the importance of financial services to the economy. Government’s stated ambition is for Ireland to become a top 20 Global FS centre by 2025. To achieve this, the industry needs to address some obstacles that stand in the way of sustainable growth as well as making the right strategic bets.

Right across financial services, organisations are sharing similar experiences and challenges; their responsibility for generating returns that create and attract capital; disruptive competition; and the war for talent. Meeting regulatory expectations, maintaining profitability, pushing the boundaries of digital innovation and providing value-led customer propositions are also front of mind.

Having survived the shocks of the GFC, financial services organisations looking forward, need to define and share their long-term purpose in a way that is understandable and benefits the economy and society more broadly.

It’s through sustainable objectives and aspirations that financial services in Ireland can achieve continued growth and set itself on a firm footing for the future.

Let’s now take look into the Banking, Insurance and Asset Management sectors and tease out some of the key themes facing each over the coming years.



The sector in Ireland is facing the same consolidation and regulatory challenges as its European counterparts. It is also dealing with the rise of new market entrants and fintechs. The departure of Ulster Bank and KBC in 2021 opens the way for their retail banking competitors to compete for the customers they leave behind.

For many years, it seemed like all banks had the same strategy, given the policy and regulatory expectations put upon them. But they also faced huge issues. Limited strategic capacity, the shock of credit losses, increased regulatory attention and the need to invest in often outdated technology.

Finding purpose

Now, the banking sector needs to identify and move towards its overall purpose. Banking leaders must innovate strategically, to attract capital at the same time as gaining social and political support. Policy makers internationally see banking as an enabler in supporting the real economy, with customer welfare taking priority. These themes are in turn reinforced by politicians and consumer protection lobbies.

But the purpose demonstrated by the sector during the pandemic is moving the dial. Good work was done to support retail and corporate customers, as well as keeping the financial infrastructure running through an exceptional period of digital transactions and remote working has not gone unacknowledged. Banks did good work and made a difference in difficult times.

There is also an opportunity for banks to take back lost market share and restate their purpose in creating safe options for savings.

The future is green – and digital

Climate change presents a major opportunity for banks. They can play an incredibly important role in making sure that capital is invested in sustainable infrastructure and businesses.

The existential threat to global banking comes from ‘big technology’, who collect and create value from data, makes for a fascinating challenge. Banks want to embrace the culture of innovation they have often lacked, but also face regulatory governance expectations in a way that technology companies struggle with. Partnerships between banks and technology players may well fail because of the cultural challenges involved. However, the potential for exceptional value creation for banks and technology companies who get this combination right is tantalising.

Banking in Ireland and globally is still in a major transition. The end game is not clear. But banks are achieving levels of profitability that will give them more strategic options. This applies not only to our domestic banks but also to the increasing number of global banks and technology companies who prefer Ireland as a location for post-Brexit banking into the EU.


The outlook for the Insurance sector remains very positive. The demand for its services will continue to increase over the planning horizon. But there are likely to be fundamental shifts in how services are delivered, the relationship between actors in the sector, and the influence of public policy on priority areas.

Close-up of man hands touching digital tablet with business diagram

A stable, competitive insurance industry is important in maintaining the post-pandemic recovery and restoring sustainability to Ireland’s public finances. As one of the top six insurance markets in Europe, Irish insurers are also attempting to integrate ESG as a key part of their business models.

The recent experience of Covid-19 and the accelerating visibility of climate change vividly demonstrates the uncertainty and instability in addressing economic and social challenges. Such macro risks exacerbate existing gaps in social protections. Across the globe we witness gaps in the funding of pension, healthcare and wealth protection, and under-insurance in natural catastrophes and emerging risks like cybercrime.

I call out the risks above not to amplify anxiety, but rather to illustrate the fundamental and critical value of insurance systems. We need to work together to mitigate risks through adaptation and transfer risks through insurance.

How services are delivered

Transformation of the non-life insurance landscape has been underway for many years. There have been significant investments in technology platforms as well as the digitisation of the customer journey. This has been more of a stop-start process in Ireland compared to some larger European markets. With the advent of lower cost technology solutions as an alternative to full re-platforming, there will be a continued acceleration of transformation. The need to reinvent the operating model for non-life companies is also beginning to level pressure on the life insurance sector. The recent trend in selling sub-scale businesses as well as re-risking portfolios has begun to tackle some of the lower hanging fruit. Institutions with the scope and scale to succeed is driving a significant change agenda.

The insurance ecosystem

The ecosystem continues to evolve. While our established system of manufacturers and distributors remains intact, we are seeing a significant uptick in the role of Insurance Technology. The scope to integrate, intermediate or challenge some of the existing ecosystems is apparent. The pace of technology change and the use of data mean it is hard for a traditional, vertically integrated insurance company to move at the same speed as customer expectations and market competition. This shifting landscape is challenging existing traditional ecosystem providers as value-added services are delivered through new providers and technology service companies.

Public policy

As a social contract, insurance and the operation of the industry is closely linked to public policy. In a local market context, we have twin agendas of insurance reform in the non-life sector and the move to implement auto-enrolment in the pensions sector. Both agendas are well trailed and will impact on the structure and operation of the market in future. A more fundamental policy agenda topic is the impact of climate change and how this will drive the structure of products and investments across the sector going forward.

Man Walking On Footpath Amidst Surrounding Wall

Wealth and Asset Management

2021 was a year of recovery and reflection across the Asset Management industry. In Ireland, total assets in Irish domiciled funds reached a record high of €3.9tn, with Ireland also becoming the largest hub for ETFs in the EU.

Ireland should look to build on very firm foundations and commit as a global centre of excellence for asset management. Our ability to do so, will be inextricably linked with our ability to compete against other countries competing for the same level of jobs and services. The industry in Ireland therefore needs to continually grow its capacity, advance its knowledge base and diversify its skill sets to attract and meet international attention that may otherwise look elsewhere.

In building our industry, we cannot lose sight of some real threats that might challenge and hamper growth, including:

  • The emergence of alternative jurisdictions, such as the UK;
  • The ease of working remotely in an industry that is not heavily dependent on capital or real estate, and is highly mobile;
  • The need for investment and modernisation of third level education to deliver world class talent; and
  • The suitability of Irish investment vehicles for use as global investment funds.
Structural issues

On top of navigating a vast EU and US regulatory agenda, the asset management industry has been working through many structural issues since the financial crisis of 2008.

“Value for money” tops the agenda. I We have witnessed investors switch from more expensive active managed funds to lower cost passive products. For active managers there are three core challenges: be distinct, perform and offer a value-based proposition. In a market as highly fragmented as asset management, it’s increasingly more difficult to be distinct. As a result, performance and operational efficiencies are key. It’s no surprise therefore that we have witnessed significant M&A activity across the entire asset management value chain, with participants consolidating for growth and economies of scale.

Size and scale will get the industry to point, but technology transformation, intelligent data analytics and digital distribution will quickly occupy board room conversations as the industry starts to truly transform itself.

Distribution and democratisation of investing

Digital distribution models for asset management companies have evolved significantly over the course of the pandemic. With the responsibility for long term savings having shifted from corporates to individuals, significant work is still needed to democratise investing and allow more and more individuals participate as investors.

In Ireland alone, we have over €130 billion in cash deposits from Irish households which will quickly lose value in an inflationary environment. The Irish government should act and begin to create demand-side incentives allowing more individuals participate in the wider market.

Sustainability in sustainable investment

The industry is embracing ESG. This is the right thing to do and holistically gives the industry a strong purpose to rally around. Strong ESG policies will ensure that capital is allocated through a more longer-term lens, this is important for companies to grow and infrastructure projects to obtain alternative funding, which in turn will sustain our communities Inevitably, switching to ESG will create tensions on returns during the early years, with ESG funds sometimes coming out in front, and sometimes behind. Patience from all sides will be necessary to stay the course in the early years, but the benefits will be worth it

Business models, processes, definitions and taxonomies will be challenging, and no doubt may change from time to time. But when it comes to climate, we have hundreds of years of erosion to pay reparations for. And if there is any doubt about that… just remember our children, and their children, and the world we leave for them.

Private Equity and private credit

There is no doubt that private equity and private credit will play a significant role in driving economic growth in Ireland. Private equity is a key source of funds for private companies and getting capital into the real economy, which in turn creates jobs, generates returns for its investors and builds better businesses.

Logically, the asset management ecosystem in Ireland lends itself to service the needs of International Asset Managers as they look to deploy this capital across the world. The Government and regulatory agendas need to align to ensure Ireland isn’t left behind as growth in these asset classes continues.

What lies ahead is in the hands of the industry

Much has been done to transform and disrupt financial services over the past ten years, but as outlined, challenges as well as opportunities lie ahead.

The pandemic has proven to be a catalyst for change. Technology platforms afforded us a lifeline to function over the past two years and our everyday familiarity and discernment of technology now highlights how important digital is and how much more there is much to do when it comes to refining the digital user experience.

The pandemic has taught us much about strong values and purpose. Environmental, Social and Governance Policies are no longer opportunities to differentiate our business, rather they are required to simply exist.

So let’s be more clear on what it is we stand for. We need to articulate and demonstrate how we bring value across communities and as well as the wider economy. In doing so, we can progress towards our ambition of being a top 20 Global FS centre by 2025 and ensure that the FS industry plays its role in building a better future.


This article was first featured in Finance Dublin.

Contact Us

If you would like more information on how EY's team of experts can help, please reach out today.