Vice President | International Financial Services, UK
Byron Fry - LinkedIn
In a recent report published by Accenture, entitled Does Digital leadership in Banking really matter?, links were established between the digital maturity of a bank and its market valuation. The essence of the argument is that banks who successfully digitalise their data enjoy greater efficiencies that lead to lower costs as a percentage of revenue, which leads to a higher market valuation. Increasingly, banks and other financial services firms are turning to blockchain technology as a means of storing and transferring data in order to increase transparency, lower costs and accelerate the speed at which it is transferred.
Ireland has sought to be an early proponent of this technology and has been steadily establishing its credentials in the enterprise blockchain space to become one of Europe’s leading locations for its development alongside the UK and Switzerland.
Ireland’s fintech sector, which sprung out of the confluence of software, technology and financial services firms that established their EU headquarters and R&D operations in the country over the past decades, has along with its educational institutions and Government backing, created a vibrant ecosystem and a tech talent pool well suited to developing blockchain solutions. In 2017, Ireland had the fastest-growing tech worker population in Europe and almost 10% of the Dublin workforce worked in software development. Today, IDA Ireland - Ireland’s inward investment agency – counts over 400 financial services firms employing 40,000 staff alongside upwards of 105,000 in the technology sector.
IDA Ireland is also one of the founding members of Blockchain Ireland, Ireland’s industry body for the sector and has worked alongside major industry players to position Ireland as a location for blockchain development. This is all part of a broader play set out in the Irish Government’s new financial services strategy, Ireland for Finance 2025 which establishes a high-level framework to coordinate the development of the fintech and blockchain ecosystem across the private sector, academia and Government.
These initiatives come at a time when blockchain firms have been scaling in tech centres such as London and Silicon Valley, where they have become increasingly attuned to the rising competition and cost for top blockchain talent. In fact, according to Linkedin’s latest emerging jobs report, demand for blockchain developers saw an incredible thirty-three-fold rise in growth compared to the previous year. Firms are tackling this challenge in innovative ways, such as enabling remote working and increasingly tapping into regional talent pools. This has offered staff a greater choice of locations, which can lead to better quality of life for them and lower attrition rates for employers. A prime example of this is First Data (now owned by Fiserv), a major US payments processor, who established a research centre in Nenagh, Co. Tipperary to develop amongst other things, their blockchain capabilities. It is also a means of de-risking global operations from headwinds such as rising rents and salaries which are often insufficient to retain staff in major centres such as London, New York or San Fransisco. Geopolitical risks such as Brexit and the impact it may have on the distribution of data and services across the EU are now also firmly on companies’ agendas when selecting a location for new offices.
R3 - the consortium behind the Corda enterprise blockchain - is the most recent blockchain company to announce its intention to establish a presence in Ireland. It plans to open a Dublin office next year to scale its software engineering, client-facing and commercial operations. They will find themselves in good company alongside IBM, Mastercard, Fidelity, Fiserv, Trade iX, WeTrade, Consensys, Deloitte, Accenture and Coinbase who are working on projects such as agricultural supply chain tracking, trade finance and international payments.
Irish academia has also been actively supporting the establishment of this sector. Dublin City University launched Ireland’s first blockchain masters in May whilst Dundalk IT recently launched a Certificate in Blockchain and Distributive Ledger Technology, highlighting the ambition of academia to work in tandem with industry in ensuring the Irish workforce remains globally competitive. These have been developed at a national level in tandem with Skillnet, Ireland’s national agency for the promotion and facilitation of workforce learning in Ireland. Additionally, the IDA Ireland and Enterprise Ireland-funded Centre for Applied Data and Analytics (CeADAR), located within University College Dublin has collaborated on a number of blockchain projects with the likes of Liberty Insurance, State Street, Accenture and Fidelity. This has given PhD students invaluable exposure to live industry applications of the technology.
Independently, the Central Bank of Ireland has established an Innovation Hub which provides a framework for engagement outside of the formal regulatory engagement processes for fintech innovators and has through this, been studying the global regulatory frameworks being established to govern cryptocurrencies.
The most exciting thing is that blockchain technology is taking root in a compact ecosystem alongside other cutting-edge technology such as AI, data analytics and machine learning as well as industry experts in insurance, trade finance and market infrastructure, which means we can expect to see blockchain being deployed in an increasing number of specialist areas.
One uniquely Irish example is the aircraft leasing industry. With over 60% of the world’s aircraft leased from Ireland, it has proved an ideal testing ground for introducing new efficiencies. Aircraft Leasing Ireland, a cross-industry working group consisting of lessors, tech firms, law firms, manufacturers and IBEC, have been investigating the digitalisation of hundreds of pages of aircraft maintenance documents and storing them on the blockchain in order to increase transaction efficiency, introduce transparency and to reduce fraud. In addition to this, they are also looking at aircraft parts traceability, aircraft trading as well as airport and consumer applications. The potential to apply these innovations to other large assets such as ships or trains may not be far behind.
In conclusion, whilst this new technology has been taking root at a breakneck pace across the globe, Ireland has been positioning itself at the forefront to meet industry demand. Being the 10th most popular location for foreign direct investment in the world yet hosting just 1% of the EU’s population, this stands testament to Ireland’s position as a small but incredibly active player on the world stage.
Blockchain is still at its early stages of development and I fully expect this ecosystem to significantly evolve over the coming years, especially as VC and R&D money continues to flow into the space. If you would like to see the latest industry deployments for yourself, the Blockchain Summit Ireland will be taking place in Dublin on the 28th May 2020 and is one of the seminal gatherings of the enterprise blockchain ecosystem in Ireland.
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