Home Policy & Governance Irish financial services ‘action plan’ sets out fintech priorities

Irish financial services ‘action plan’ sets out fintech priorities

Fintech focus: (L-R) Karen Cullen, Jennifer Carroll MacNeill and Michael J McGrath (assistant secretary-general with responsibility for the department’s financial services division) | Credit: Department of Finance (Ireland)

Six priorities for fintech and digital finance are included in a new financial services ‘action plan’ for 2023 published by Ireland’s Department of Finance.

Jennifer Carroll MacNeill, minister of state with responsibility for financial services, launched the action plan, which follows (and relates to) the release six months ago of an updated ‘Ireland for Finance’ strategy – a whole-of-government strategy charting the development of international financial services in the European Union (EU) member state to the end of 2026.

The ‘Ireland for Finance’ document ceded greater prominence to fintech and digital finance, as well as to sustainable finance, than the strategy’s first iteration. This was published in 2019 (and due to run until 2025) and was subsequently also followed by annual action plans.

The themes of the updated overarching strategy are sustainable finance; fintech and digital finance; diversity and talent; regionalisation and promotion; and ‘operating environment’. The newly published action plan, which runs to 37 pages, is split into five sections following the same themes.

Twelve ‘key deliverables’ are identified for the public and private sector over the remainder of 2023, with six of these in the ‘fintech and digital finance’ section (Global Government Fintech lists all 12 priority measures at the end of this article).

REGISTER NOW Global Government Fintech Lab 2023 is being held in Dublin on Thursday 18 May

Fintech ‘continues to grow in importance’

‘In the past year, fintech and digital finance have continued to grow in importance in Ireland and are becoming a strong driver of growth in employment,’ the action plan’s ‘fintech and digital finance’ section notes.

Among the six measures is a commitment to ‘deepening the work of the cross-government fintech steering group and joint fintech group’. The steering group’s creation was announced in February 2021 and is overseen by Karen Cullen, who is the Department of Finance’s head of international financial services. Its membership expanded last year to take in various fintech-interested public sector agencies and bodies. The joint fintech group comprises steering group members and industry representatives.

‘2023 will be an important year in terms of preparing for the transposition and implementation of [the EU’s] MiCA [Markets in Crypto-Assets regulation – likely to come into effect in 2024],’ this section of the action plan also notes, adding that ‘other work will include assessing industry proposals on tokenisation and digital assets’.

The six measures also include ‘communicating and rolling out a new pre-seed funding offer for early-stage fintech innovators’ by government agency Enterprise Ireland. The target is that 12 new companies benefit from this in 2023.

Beyond the six specific measures, the ‘fintech and digital finance’ section also references the recently created International Sustainable Finance Centre of Excellence, which has been set up ‘to deliver the skills necessary for financial services to finance a net-zero future’; a ‘sustainable finance fintech strategy’ (overseen by Sustainable Finance Ireland and the Fintech & Payments Association of Ireland) launched in October 2022; and, in a separate ballpark, the common EU member state position on the new framework for eIDAS (which stands for ’electronic identification, authentication and trust services’) agreed at the Council of Ministers in December 2022 – the precursor to an EU ‘digital wallet’.

RELATED ARTICLE ‘Getting into gear: governments get organised for fintech’ – a report from the Global Government Fintech Lab 2022’s opening panel session, which featured Karen Cullen

Central bank to explore sandbox possibility

Fintech-relevant measures extend beyond the six in the ‘fintech and digital finance’ section. The twelfth action point, for example, states that the Central Bank of Ireland will kick off a ‘detailed review’ of its Innovation Hub that will ‘include peer comparisons, to expand its impact and functionality’.

The central bank’s Innovation Hub was set up in 2018 for fintech companies to engage with the authority outside of formal requirements. The updated ‘Ireland for Finance’ strategy already referred to a ‘plan to consult on proposed enhancements to [the] Innovation Hub in 2023 with any changes to be implemented over the course of the current central bank strategic cycle (2022-2026)’.

The action plan also mentions the exploration of the creation of a regulatory sandbox. ‘A number of industry representative associations have recommended in submissions for both this Action Plan and for the Update to Ireland for Finance strategy that a regulatory sandbox be considered by the Central Bank of Ireland,’ the document states. ‘This is in keeping with the engagement with the Retail Banking Review [whose report was published in November 2022], which reported that participants in the public consultation in the review expressed the view that fintech providers and other firms could benefit by an expansion of the Central Bank of Ireland’s Innovation Hub to include a regulatory sandbox.’

The action plan states that ‘consideration will be given to the types and benefits of sandboxes adopted in other countries’ (a form of words also used in the Retail Banking Review).

The central bank last year established a ‘Financial Industry Forum’, chaired by the governor, which meets twice yearly (the first meeting was in May 2022). The action plan states that the central bank ‘will also establish three sub-fora to discuss innovation, domestic issues and international issues in more detail, with membership consisting of subject-matter experts in the respective areas’.

Ireland to host Global Government Fintech Lab

Ireland’s Department of Finance is partnering Global Government Fintech for the Global Government Fintech Lab 2023 – our international event for senior public servants interested in exploring and implementing fintech solutions – on Thursday 18 May.

Minister Carroll MacNeill, who took up her ministerial role in December 2022, is due to deliver the opening keynote and Cullen is among the panellists for the opening panel session.

The Global Government Fintech Lab, which is free to attend for all public servants, will feature speeches, discussions and breakout sessions focused on fintech-related opportunities and challenges for those working in central government, agencies and other public authorities. It is being held at Dublin Castle’s Printworks venue.

The Lab agenda includes overarching themes such as how governments and public authorities are structuring around fintech and exploring where the biggest opportunities can be found for fintech solutions in the public sector. More specific sessions are planned on topics including: data; public authorities’ use of fintech solutions to tackle fraud, error and debt; payments (to/from government); blockchain; and central bank digital currencies.

The inaugural Global Government Fintech Lab took place in June 2022 in partnership with the Estonian government.

‘Update to Ireland for Finance: Action Plan 2023’: 12 priority measures
Global Government Fintech has bolded the six measures in the ‘fintech and digital finance’ section (measures 3, 4, 5, 6, 7 and 8); the lead organisation responsible for all measures is in italics

1. Revise and update Sustainable Finance Roadmap (International Sustainable Finance Centre of Excellence)
2. Development of an updated sustainable finance value proposition (IDA Ireland)
3. Deepen the work of the cross-government Fintech Steering Group and Joint Fintech Group (Department of Finance)
4. Promote and support the digital finance agenda for the industry at home and abroad (IDA Ireland)
5. Participation in 2023 international fintech events (Enterprise Ireland)
6. Communicate and roll out a new pre-seed funding offer for early-stage fintech innovators (Enterprise Ireland)
7. Export market seminar and peer-to-peer networking event focusing on international markets for indigenous fintech and financial services firms (Enterprise Ireland)
8. Continue to develop educational consumer resources to support consumers to engage with fintech (Competition and Consumer Protection Commission)

9. Complete the study by the Expert Group on Future Skills Needs on the international financial services sector (Expert Group Future Skills Needs)
10. Partner with the IDA and other stakeholders on showcase events in Ireland (Department of Finance)
11. Relaunch the annual European Insurance Forum (Insurance Ireland)
12. Review of Central Bank Innovation Hub (Central Bank of Ireland)
Source: ‘Update to Ireland for Finance: Action Plan 2023’ (Department of Finance; March 2023)

FURTHER READING

Global Government Fintech Lab to hold 2023 ‘Lab’ in Dublin – our article (20 January 2023) announcing Ireland’s capital as location for the event

‘Ireland’s finance department’s fintech lynchpin: an interview with Karen Cullen’ – an interview (16 September 2021) with the Department of Finance’s head of international financial services (and fintech steering group head)

GLOBAL GOVERNMENT FINTECH LAB 2023: REGISTER NOW

The Global Government Fintech Lab 2023 will be taking place in Dublin on Thursday 18 May. The Lab, our one-day event for senior public servants interested in exploring and implementing fintech solutions, is being organised in partnership with Ireland’s Department of Finance. The event, which is free to attend for all public servants, will feature keynote speeches, panels and breakout sessions focused on fintech-related opportunities and challenges for those working in central government, agencies and other public authorities.