STRONG LINKS

MORE THAN 100 FINANCIAL SERVICES FIRMS HAVE ESTABLISHED OR EXPANDED IN DUBLIN. KIERAN DONOGHUE, GLOBAL HEAD OF STRATEGY AND FINANCIAL SERVICES AT IRELAND’S INWARD INVESTMENT AGENC – IDA IRELAND – SAYS THERE ARE MYRIAD REASONS FOR THIS, BUT WHAT HE HAS GLEANED IS THAT POSTBREXIT, FINANCIAL FIRMS ARE EXECUTING A MULTI-LOCATIONAL STRATEGY NOW THAT LONDON IS OUTSIDE THE EU. HOWEVER, IT REMAINS IMPORTANT THAT LONDON VERY MUCH STILL HAS A ‘FRIEND’ IN EUROPE.

Ireland, specifically Dublin, is well positioned in terms of attracting financial services businesses from the UK. Attractions include geographic and cultural proximity, language and law, financial regulation and supervision to EU and global standards, deep domain knowledge, close ties with the UK financial sector, the ‘liveability’ of Dublin itself, and its role as an established and diversified financial centre especially for investment funds, banking, insurance and financial technology.

London will remain a major global financial centre, as Kieran explains. However, as time passes, and more emphasis is placed on establishing trade agreements with Asia and emerging markets, the UK will still need a friend in Europe.

“Ireland has longstanding and close ties to the UK, going well beyond a common time zone, language and legal system,” he says. “With a diverse and experienced talent pool, a common travel area with the UK, a voice in European policy and regulatory fora, plus a substantial financial services industry comprising the leading international banks, insurers, asset managers and fintechs, Ireland is well-placed to support UK-based firms as they prepare for a postBrexit world.” And in terms of what this looks like, the numbers speak for themselves.

“We’ve been speaking to international financial services groups since 2016 and over the last five years or so, more than 100 financial services firms have either established in or substantially expanded their presence in Dublin,” Kieran says. “Clearly, their assessment of Brexit reinforced the importance of preserving access to the EU market, of maintaining relationships with existing clients while positioning for future opportunities and, therefore, they selected Dublin on this basis.”

“One of Ireland’s attractions is the presence of more than 300 foreign-owned financial institutions employing more than 40,000 people,” Kieran continues. “These firms operate in several sectors including banking and payments, insurance / reinsurance, funds and asset management, aircraft leasing and financial technology. They undertake a diverse range of front, middle and back office activities and have significantly expanded their presence in Ireland post-Brexit.”

“A recent report entitled ‘Brexit & the City: The Impact So Far’ by New Financial has identified Dublin as the financial centre that has experienced the largest influx of financial services companies in

response to Brexit and we have an increasing number of systemically important institutions such as Barclays, Bank of America, and Citigroup running their Pan-European banking businesses out of Dublin – it’s quite diverse in terms of the nature, scale and complexity of the institutions that are establishing here.”

Even with the substantial focus on Irish shores, Kieran says given the complexity of the markets that they’re servicing, along with the distribution of their customers, a multi-locational model is the appropriate response to Brexit. “In practice, what we’ve seen is a significant number of groups establishing a presence in Dublin, but also Luxembourg, Frankfurt, Paris and Amsterdam. The UK-EU Trade and Cooperation Agreement (TCA) all but ignored financial services and I think that sends a very strong message in itself, which is that if you want to maintain access to the EU market and to your customers in Europe, you need to be in Europe.”

However, it isn’t just about location – having access to the talent and skills essential to ensure the industry continues to thrive is also paramount. “Naturally, with respect to financial services, access to a young, highly- educated and skilled workforce is pivotal. For the industry, innovation is key and high calibre talent is necessary to drive success. Therefore, the chosen EU hub must have a talent pool consisting of people with the required skills and experience – in quantity and quality – for the sector to continue to flourish,” he continues.

“UK-based financial services firms should see an EU presence as an opportunity to increase market diversification and competitiveness, and to supplement the local, top-quality expertise on offer in Britain. And here in Ireland, the industry can also source skilled and experienced staff both locally and from across the EU. A fast-track visa programme also exists to onboard staff hired globally, for instance from the US.”

Meanwhile, the Irish government is keen to show their strong pro-business trackrecord. According to Forbes, Ireland is one of the best countries in the world for ease of doing business, having already attracted some of the world’s leading financial services firms including JP Morgan, BNY Mellon, BlackRock, Amundi, Fidelity, Morgan Stanley, Goldman Sachs, Zurich, Mastercard, Stripe and many more.

“UK-based financial services firms should see an EU presence as an opportunity to increase market diversification and competitiveness, and to supplement the local, top-quality expertise on offer in Britain. And here in Ireland, the industry can also source skilled and experienced staff both locally and from across the EU. A fast-track visa programme also exists to onboard staff hired globally, for instance from the US.”

Ireland’s attractiveness is not confined to the financial sector, either. “Many other industries from manufacturing e.g. biopharmaceuticals, to technology (software development) and other services sectors such as digital media and IT / business services already have a very strong presence in Ireland and have elected to expand further in anticipation of the challenges triggered by the UK exit.”

In terms of where this leaves us now, five years after Brexit, Kieran says the next step is to ensure business can move onwards and upwards post-relocation.

“The vast majority and the biggest relocations took place within two years of the UK referendum. Brexit business is still coming through but not to the same levels as 2016-2018 – it has certainly peaked,” he says. “We don’t expect a substantial second wave [of relocations]; the bigger question now is how companies that established or expanded in Ireland in response to Brexit scale their investment.”