Irish Fintech Success has Deeptech roots

Irish FINTECH success has DEEPTECH roots

Ireland’s top fintechs are built on the appliance of cutting-edge science and the world is taking note, says Enterprise Ireland’s Eoin Fitzgerald.

“Deeptech”, which is generating buzz across the business world, describes technologies that result from the commercial application of cutting-edge scientific research. These technologies are creating radically new solutions, with the potential to upend existing products, processes, and even markets.

“Right now, deeptech is driving innovation in Ireland’s fintech sector,” says Jack Finucane Clarke, Enterprise Ireland’s London-based market advisor specialising in financial services, software and fintech. “By harnessing technologies such as blockchain, artificial intelligence (AI) and machine learning, Irish fintechs are not just helping to improve business performance right across the financial services sector but are creating and capturing new commercial opportunities for it.” That matters because, right now, both new and existing financial services players around the globe face increasing challenges and opportunities.

“These are emerging not just from the digitisation of banking but from the advent of new payment platforms and ever-changing compliance requirements too, particularly the raft of new regulations that emerged in the aftermath of the financial crisis,” says Finucane Clarke. Ireland’s formula for tech success is helping financial services institutions to succeed. It’s happening in part because fintech is an area in which Ireland already excels. “Ireland is really good at fintech. Enterprise Ireland, the trade and innovation agency, has a really strong portfolio of top fintech companies in this space and, indeed, is one of the largest investors in fintech startups in the world,” explains Eoin Fitzgerald, Enterprise Ireland’s senior advisor for fintech, based in Dublin.

In fact, Enterprise Ireland has invested in over 80 fintech start-ups since 2014. Its portfolio of more than 200 financial services and fintech companies generated over €1bn in revenue in 2017.

“Ireland is now showing strength in deeptech for the same reasons that it developed strength in fintech – because it has both a strong international financial services sector and a strong technology sector,” says Fitzgerald.

Ireland is the fourth-largest exporter of financial services in the EU. More than 250 of the world’s leading financial services firms operate in the country. Almost half of all global hedge fund assets are serviced from Ireland. It is home to operations of nine of the world’s top 10 technology companies, including Facebook, Google and Amazon.

Commercial innovation driven by academic excellence

Ireland’s strong academic research base is helping to drive innovation too.

“Ireland’s most successful deeptech start-ups are either university spin-outs or are created through the commercialisation of the really good fundamental research being carried out here,” says Fitzgerald.

Right now, much of this academic research is going into fintech. Enterprise Ireland is helping, having launched a major fund to support fintech and deeptech start-ups working in areas such as AI, machine learning, augmented and virtual reality, the internet of things (IoT), and blockchain. This work supporting the commercialisation of research is coming to fruition through the success of Enterprise Ireland’s fintech companies.

Many specialise in compliance – or regtech – providing solutions for anti-money laundering and know your customer requirements, including working with the UK Financial Conduct Authority (FCA)’s regulatory sandbox to develop robust solutions.

Governor Software took this approach to develop its products, which help senior risk and compliance executives maintain regulatory governance and oversight through clear visualisation of regulatory obligations. Its compatriot Gecko Governance uses blockchain to create integrated regtech solutions for managing compliance in the funds industry. Sedicii creates blockchain-based products that track digital asset ownership and verify data between organisations without exposing the underlying data.

Machine learning and AI underpin innovative mobile marketing solutions for the financial services sector, such as Xtremepush, whose product allows banks to schedule web prompts based on when a recipient is most likely to engage with them.

By identifying where customers drop off in the engagement cycle, it can help digital banks improve the speed and efficiency of customer onboarding, reduce the cost of customer acquisition and amplify opportunities for engagement, as well as for the sale of products such as loans and mortgages.

Irish fintech Trezeo helps provide financial stability for self-employed people working in the ‘gig’ economy, turning unpredictable pay cheques into regular income. In doing so, it enables a cohort to gain access to lending opportunities from which they may previously have been precluded.

Swoop, which received GBP 5m from the RBS bailout fund scheme, delivers AI-based advisory services to small businesses, simplifying and speeding up access to loans, grants and equity funding. Machine learning specialist RecommenderX, who has worked with companies like Mastercard, guides enterprise teams to better data-driven decisions.

Trinity College Dublin spin-out DataChemist helps organisations find insights previously hidden in their data, including some of Europe’s largest financial organisations Groundbreaking AID:Tech uses a combination of blockchain, AI and machine learning to create a decentralised digital identity platform that empowers people to manage their own data securely and privately.

It’s one of a growing number of Irish fintechs that have been sparked into life by scientific breakthroughs. “There is a lot of innovation going on, a lot of really interesting technologies emerging and a lot of really good research being commercialised,” says Fitzgerald.