DUBLIN, 9 JAN: Ireland’s financial services industry could grow by 26% by 2028, with employment in the sector increasing by 34% if key competitive advantages and opportunities are harnessed, according to a new report from EY Ireland.
The report, Building a Better Financial Services Ireland: Accelerate to Elevate, is based on in[1]depth interviews and insights from 140 senior financial services leaders across Ireland and an analysis of the key success factors of the 10 fastest growing financial services markets globally. It sets out a series of recommendations across five key areas which underpin the most successful financial services markets globally: Infrastructure, Talent, International Trade, Macroeconomic Fundamentals, and the Regulatory Framework.
By effectively harnessing existing advantages in these areas and continuing to make progress in addressing bottlenecks, modelling based on insights from industry leaders suggests that Gross Value Added* in Ireland’s Financial Services sector could be €3.4 billion higher by 2028 when compared with a baseline forecast. Delivering this growth could raise employment across Irish financial services by as much as 34% over the period 2024-2028, an annual increase of around 6%. This would represent an additional 30,000 jobs above the baseline by the end of the projection horizon.
The report makes a number of recommendations to capitalise on the strengths of Ireland’s financial services sector and accelerate growth, including:
Colin Ryan, Financial Services Managing Partner, EY Ireland, said: “Ireland’s financial services sector has long been a cornerstone of Ireland’s economic growth. With over 8,800 companies currently employing more than 120,000 people, there is a strong sense of optimism about the future, with industry leaders expecting the sector to grow significantly in the coming years.
As a gateway to Europe for global financial markets, Ireland is uniquely positioned to capture the next wave of growth. EY has examined the key drivers of success in some of the world’s fastest-growing financial markets, with a focus on identifying how these factors could be leveraged to fuel further expansion in Ireland.
The competition for international investment is fierce, but EY and senior financial services sector leaders believe that Ireland can not only survive but thrive as a globally significant location for financial services. To succeed, however, it is crucial that we remain proactive to solidify Ireland’s competitive advantages in a rapidly evolving global economy. We must reinforce the strengths that have historically set us apart, while also embracing new opportunities in areas such as sustainability, digital transformation and financial innovation.
The opportunity before us is immense. By acting decisively now, we can further elevate Ireland’s position on the global stage and ensure that our financial services sector remains a driving force for economic progress in the years ahead.”
Financial services leaders see technology as Ireland’s leading growth driver
More than nine in ten (92%) financial services leaders see technological infrastructure and innovation as Ireland’s most significant competitive advantage over international peers. Ireland’s strength in technology comes from the strength of its FinTech ecosystem, robust digital infrastructure and the availability of skilled talent. Ireland ranks 7th for technological infrastructure and innovation globally under the EY 5-Accelerant Framework, buoyed by the level of collaboration between universities and industry taking place within the market.
Ireland’s cross-border trade environment seen as a key advantage
Ireland’s position within Europe, offering access to the EU single market and proximity to European financial centres, is recognised as a key advantage by 92% of financial services leaders, and critical for future growth. Almost three-in-five (58%) financial services leaders see access to the EU single market as a key advantage for Ireland’s financial services sector, relative to international peers, with a further 48% highlighting its proximity to major European financial centres and its cross-border tax policies and frameworks. Leaders also see cross-border trade as critical to the success of their own businesses, with 27% citing it as a pivotal accelerant.
Strong regulatory and legal frameworks are a strength for
Ireland Ireland’s regulatory and legal frameworks are seen as key to its future standing on the global stage by 81% of financial services leaders. Half (50%) see Ireland’s common law legal system as a strong advantage, offering stability to companies looking to invest and grow in Ireland. However, continued agility and improved efficiency are needed to maintain competitiveness on the global stage. Macroeconomic stability and growth are a key appeal of Ireland’s financial services sector Almost three quarters (74%) of financial services leaders highlighted Ireland’s macroeconomic fundamentals and policy environment as an important driver of financial services sector growth. In particular, they highlighted Ireland’s corporation tax policies as an integral part of its attractiveness and growth, most notably the implementation of the 10% rate for the International Financial Services Centre in 1987 and existing 12.5% rate.
When asked to highlight any areas of perceived disadvantage for Ireland in comparison to other leading Financial Services hubs, just over three in ten, (32%) respondents cited the affordability and accessibility of housing in cities, while the cost of living and doing business was highlighted by 33% of respondents.
For more information on the report, click here.
