The continuing growth and development of Ireland’s burgeoning fintech sector is being supported by the cross-Border Fintech Corridor. The InterTrade Ireland-backed initiative brings together businesses, academic institutions and other organisations to provide economic growth opportunities for the financial and technology sector in the region between Belfast and Dublin.
Ulster University is playing a lead role in supporting the Fintech Corridor and is contributing to the development of the corridor ecosystem in a number of ways. On the educational front, these include a BSc degree Higher-Level Apprenticeship (HLA) in Financial Technology for people wishing to work in the sector, and a part-time BSc (Hons) in Financial Technology for financial sector practitioners.
The university has also expanded its research capabilities and is initiating several projects led by the Department of Accounting, Finance and Economics. The Accounting, Finance and Economics Research Group (AFERG) is working on a call for a fintech PhD studentship and is seeking funding for more of these.
Ulster has also appointed a Chair of Financial Technology to ensure it maintains a lead in fintech research and capabilities. Prof Daniel Broby is an internationally recognised finance academic and formerly a senior figure in the fund management industry.
We are now moving to a more decentralised model where the old players will lose their dominance. The spokes will gain power at the expense of the hubs
Prof Broby explains that the Fintech Corridor is taking advantage of a fundamental shift in global financial market dynamics.
“The first thing to understand about the financial markets is that they have tended to work on a hub-and-spoke approach,” he points out. “The large centres have dominated the market for hundreds of years.”
Invert
But fintech is changing that by combining finance with the power of the internet to invert the old order.
“The internet is without borders,” he says. “We are now moving to a more decentralised model where the old players will lose their dominance. The spokes will gain power at the expense of the hubs.”
Brexit has also had an impact in that regard. “We are seeing Dublin gain outsourced workers from London,” says Broby. “London-based firms are moving activities to Dublin to gain marketing access to the EU. It’s the same in fintech. The cost of labour in Ireland is so much lower than in the City of London, yet the skillsets available are at least as good as there or anywhere else.”
Among the primary objectives of the corridor is to build a cluster with the critical mass to attract other leading fintech players to invest in the region. That growth will in turn pull in further investments.
Northern Ireland doesn't have the same critical mass as Dublin but the sensible rationale is to combine forces. Both cities are pushing much the same thing
“We can build on what already exists. Look at the existing infrastructure in the Republic of Ireland – it’s very dominated by technology companies that want to get into finance. Although the sector is smaller in Northern Ireland, it has lots of financial companies that want to get into technology. There is a clear synergy in that. The corridor makes a lot of economic sense. There is a real symmetry there.”
New to Belfast, Broby says he was attracted to move there for a number of reasons including ongoing research into areas related to fintech.
“In that respect, Northern Ireland doesn’t have the same critical mass as Dublin but, once again, the sensible rationale is to combine forces. Both cities are pushing much the same thing.”
Collaboration
And there is still considerable scope for collaboration between third-level institutions on both sides of the Border. “There are still EU funds available to do joint collaborative research between EU and UK institutions,” says Broby. “It makes sense. Belfast and Dublin are just two hours from each other and there is a desire there to collaborate on AI and machine learning and other relevant technologies.”
That academic involvement in the corridor is very important. “Academia delivers conceptual ideas to start-ups.”
And the involvement of academia can lead to the establishment not just of new companies but of whole new sectors, as history as shown. Broby was involved in the research in the UK which led to the introduction of open banking in Europe. “We identified that consumers in the UK were dissatisfied with retail banks but weren’t changing. We realised that if we wanted to make it easier to change banks, we had to make it easier to transport data.”
That resulted in data sharing being written into the next EU financial services directive. “We didn’t think of it as a philosophical change at the time, but what it did was open up the sector to people outside of banking. It enabled them to get banking data to do other things with it. The UK and Ireland were the first places in the world to do that.”
Two entirely new sectors grew up out of it, fintech and the payment services industry, he notes.
Similar results could come out of the Fintech Corridor. “A large number of new and successful companies have come out of that in both the UK and Ireland. We can now build on that first-mover advantage to help the corridor become a global fintech hub.”