Focus on financial services: an increasingly varied sector in the throes of change as it loses two pillars

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This year sees perhaps the most seismic shift in the Irish financial services sector in a very long time.

Ulster Bank and KBC are leaving the banking market, creating a multitude of opportunities, threats, problems and successes. It all depends on where you are. If you are a future former Ulster Bank or KBC client, unless you are very well organised, this is likely to create problems.

For competitors such as AIB and Bank of Ireland, there are huge opportunities to win business easily – new customers, new mortgage portfolios and, in a market where skills are scarce, new employees.

For staff in the sector, this is likely to be a troubling time – and not just because of the departure of two large employers who between them employed nearly 4,000 people in the sector.

But overall the sector continues to be a huge success story, now employing over 100,000 people here. That’s a massive 60% increase since 2004.

In the past eight years alone, since Ireland began to recover from the crash that destroyed many parts of the sector, the number of financial services firms in the country has increased by 36% to 9,000.

As in almost all other sectors, financial services are being profoundly transformed by the digital revolution.

Fintechs, perhaps long perceived as not necessarily being a real threat to the big players in the sector, are now indeed the engine of innovation. Legacy banks are striving to transform old, creaky, overburdened technical systems into nimble financial gateways that can appeal to a new generation of customers who judge banks by their app, not the bank manager’s academic tie.

But fintechs are also creating opportunities for techies and finance-oriented personnel.

With the growth of tech and finance hubs, Dublin is proving to be fertile ground for a crossover sector of both tech and finance.

A similar hybrid success story was created earlier when Ireland’s proud tradition as a hub of the aviation industry blended with the kind of accounting and legal expertise that was adept at navigating tax law and international agreements to make Ireland a world leader in aircraft leasing. Some of the highest paying jobs in the country are supported by this particular financial services subsector, although many of these highly paid professionals are making their money right now as they work to try to salvage the plane they had rented from Russian airlines. .

Indeed, the top-ranked financial services firm is Fidelity Investments Limited, a Boston investment firm that employs 1,300 people here, many of them software engineers and programmers to staff a major technology hub. Only a handful of others are in the top 70 and they are all big international players.

The two big Irish banks are on the list but not in the top 100.

At the top of these institutions, there is a growing sense that the salary cap is holding back savvy hiring, with the departure of Francesca McDonagh, CEO of Bank of Ireland, to Credit Suisse being just the most high-profile example.

And further down the ranks, staff at the two major banks will know better than anyone the huge changes that have already taken place to enable them to compete – and the huge changes that are likely yet to come.

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