Local impact, global origins

It’s tempting to view these global events as distant, but their ripple effects are being felt everywhere, including Ireland. Geopolitical shocks are translating directly into domestic economic concerns, for example:

• Exporters — be they whiskey distillers or precision manufacturers — are recalibrating routes to market;
• Multinational subsidiaries face investment pullbacks; and
• SMEs, especially those reliant on cross-border supply chains, face increasing operational stress.

The Department of Finance recently warned that continued trade tensions could shave 1.5 percentage points off Ireland’s domestic growth trajectory over the next two years—equivalent to around 25,000 fewer jobs. ¹ These statistics represent the lived reality of Irish households and Irish businesses. For banks and bank customers, these aren’t just economic signals — they are a call to action.

 

Resilience, redefined

Amid this turmoil, Ireland’s banking sector has proven itself as resilient, and a foundational pillar of economic stability. In fact, the past five years have demonstrated the resilience and strategic importance of banks not only in preserving economic continuity, but in fostering customer trust and societal cohesion.

The sector’s response during the Covid-19 crisis—characterised by empathy, agility, and an elevated focus on customer well-being—has continued into the post-pandemic period. Irish banks are actively supporting households facing cost-of-living pressures and providing guidance to businesses dealing with supply chain disruptions. Generating customer loyalty.

This customer-centric mindset and agility is critical in the current volatile environment.

 

Disruption and opportunity

But sustaining this loyalty requires transformation. The banking sector is undergoing structural change, driven both by technological innovation and shifting competitive dynamics.

We are seeing a diversification of market participants: fintechs, non-bank lenders, and digital-first platforms are not just arriving — they’re establishing themselves, reshaping customer expectations, and competing on experience, speed, and simplicity. All market participants need to evolve to this as customers will opt, and are opting, for providers that offer seamless, real-time interactions.

At the same time, banks must contend with foundational questions around the very nature of money and payments. The emergence of new capabilities such as digital currencies and blockchain-enabled settlement will reshape how financial value is stored, transferred, and recorded.

 

Four imperatives for transformation

In light of these converging forces, four areas demand attention for banking leaders:

 

1. Understanding the evolving customer

Today’s Irish customer looks nothing like the profile of a decade ago. First-time buyers are now often in their late 30s. Flexible working patterns and participation in the gig economy are growing. Younger generations adopt new financial tools at record rates—many have never set foot in a branch, yet actively manage their finances through digital wallets, apps, and instant payments.

Even within families, generational shifts are stark: teenagers managing digital allowances contrast with older customers expecting traditional interactions. At a national level, population growth, ageing demographics, and increasing inward migration are changing the composition—and expectations—of the customer base.

This evolving landscape requires more than digitisation. It demands rethinking value propositions, product design, and service models from the ground up. Banks must meet customers where they are—digitally, demographically, and behaviourally.

 

2. Reinforcing Ireland’s competitiveness

EY’s recent research on Ireland’s ambition to position itself as a global financial services hub identified one critical enabler : simplification². To foster innovation while maintaining trust and stability, Ireland must reduce unnecessary complexity across its regulatory and operational systems.

Encouragingly, momentum for simplification is gathering at the European level. ECB President Christine Lagarde and European Commission President Ursula von der Leyen jointly called for a more proportionate, risk-based approach to regulation—emphasising the need to reduce unnecessary complexity and support financial innovation³. Ireland is well positioned to lead in this area, championing smart simplification that preserves and continues to protect market integrity while unlocking new growth opportunities.

Beyond simplification, enhancing Ireland’s competitiveness also demands a broader view — one that recognises the critical enablers of innovation and resilience. Chief among these is talent. As the financial services landscape becomes more complex and technology-driven, the skills required are evolving just as rapidly. Future-ready regulation must be matched by future-ready workforces.

At the same time, cross-sector collaboration—such as industry-led initiatives to protect access to cash—has shown the power of coordinated action. This same model can be extended to shared challenges such as digital inclusion, sustainability, and cybersecurity. Beyond regulation, competitiveness also means investing in talent. As the demands on the sector evolve, so too must the skills within it. Cross-sector collaboration—such as joint initiatives to ensure cash access—demonstrates the impact of unified action. This model can be extended to shared challenges like digital inclusion, sustainability, and cybersecurity.

Lastly, Ireland must enhance its innovation infrastructure—developing the regulatory sandboxes, public-private partnerships, and investment environments needed to scale emerging solutions like AI, tokenisation, and digital identity.

 

3. Embracing AI and exponential technologies

The trajectory of AI adoption in financial services has shifted from experimental to essential. Cloud computing and agile development are now industry norms. Generative AI has moved from hype to practical application, driving productivity gains across customer service, compliance, fraud detection and more.

The next phase—Agentic AI—promises even greater transformation. This technology is capable of executing complex tasks with minimal supervision, will challenge banks to reimagine their operating models, control functions, and talent strategies.

But successful AI integration won’t hinge on technology alone. EY’s analysis shows that banks leading in AI are those investing in people: retraining staff, embedding digital literacy, and building cultures that embrace change. Future-ready banks will be those that not only deploy AI ethically but do so in ways that preserve trust and enhance human capability.

 

4. Making sustainability a strategic imperative

We have all heard of the proposed recent Omnibus simplification package introduced in relation to Sustainability Reporting and recognise the easing of the burden that it represents. However, it is critical that this is not interpreted as a pressure release on the progress that must still be made, as societal norms evolve and environmental boundaries fundamentals continue to be breached, deteriorate — and banks must continue in their leadership position and direct capital flows to mitigation and adaption respond with increased urgency.

The financial sector has a unique role in accelerating the transition to a low-carbon economy. This means embedding ESG principles into product design, credit policies, investment strategies, and customer engagement. It also means channelling capital—at scale—towards initiatives that deliver measurable environmental and social outcomes.

Crucially, sustainability should not sit on the sidelines of business strategy; it must be central to it.

 

The path ahead: trusted, agile, and relevant

As we look to the future, the most successful banks will be those that remain agile in the face of disruption, trusted by customers, and relevant in a world of constant reinvention.

Innovation is no longer a luxury—it’s a requirement. But it must be accompanied by empathy, resilience, and a deep understanding of the changing needs of Irish society.

The next 25 years will likely bring even more volatility, complexity, and technological upheaval. But they will also offer extraordinary opportunities for those institutions bold enough to lead.

Banks that embrace this challenge will not just survive. They will shape the future of finance in Ireland — and create lasting value for customers, communities, and the economy at large.

 

¹Minister Donohoe notes the publication of analysis estimating the impact of tariffs on the Irish economy : Paschal Donohoe TD, Fine Gael Dublin Central,
²EY Building a Better Financial Services Ireland Research Report 2025 (Building a Better Financial Services Ireland Report – Financial Services Thought Gallery)
³Financial Times, “Lagarde and von der Leyen call for EU drive to cut red tape for banks”, February 26, 2024.