| The 'Fintech future' for Ireland - op-ed on the potential from a convergence between the IFSC and the ITC sectors |
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| ‘Fintech’ is a word that crops up in a number of articles in this issue, notably in our interview with Citi's Aidan Brady, where he speaks about the Citi Innovation Lab, which since 2005 has been one of Citi's foremost centres for fintech developments, and in an article on Facebook's application to be regulated by the Central Bank for the provision of financial services. |
Facebook is in Ireland, along with other leading brand names in IT thanks to the great FDI platform that the country offers to banks, non banks, and non financial services companies alike. It is looking to a global market for its financial service offering – that will make it a financial services company, an 'IFSC' company, of the next generation.
'Fintech' certainly is core to the activities of all IFSC companies, and while the thought of a convergence of ITC and financial services might seem overly futuristic, it is an increasingly imminent likelihood that financial services companies will ignore at their peril.
That said, there is also an amount of hype around the subject of fintech, and technology issues generally that needs always to be accompanied by an amount of clear thinking.
Certainly, technology must be seen as integral to all financial services offerings in future, (and also to the skill sets of all staff working in financial services).
That said, the importance of 'service' values should not be neglected, such as values in financial service such as knowledge, committment to service, standards of professionalism, and integrity. These values are as old as the ages, and must be blended with the new age skills of fin tech. The companies individuals and players that do so will be the ones who will succeed in the future.
A core part of the 'great FDI platform' that Ireland offers remains the tax regime – which is characterised by a lot more than just a low headline corporation tax rate. Also integral is the stability of the fiscal regime, a point that is made by the chairman of FIBI in an article in the 2014 edition of the Finance Dublin Yearbook, and referenced in our cover story in this issue of European banking union, and the opportunities it offers to the IFSC.
This all happens as new assaults on Ireland's corporation tax regime are launched daily, in the media, and from ideologically motivated campaigners often conveying a belief that low tax is somewhat immoral. Questions of morality should be disassociated from discussions over the efficacy of tax rates. Companies are not people, and the people behind all companies (their shareholders) are fully taxable in their home jurisdictions. There is indeed an economic, and ethical, case to be made for zero corporation tax on corporations throughout the world, treating them on the same terms as business and professional partnerships, as most countries do.
In this debate it is important to reiterate the time honoured comparison of the difference between Tax Evasion (illegal and dishonest), and Tax Avoidance, (legal), and to put the case for Ireland's 12.5% tax rate with pride and the confidence that such a strategy is fair, sensible, and best, for all, for the 'third world', and the country’s trading partners equally.
(This article was published in: 2014) |
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