IRELAND FORFINANCEThe strategy for thedevelopment of Ireland’sinternational financialservices sector to 2025Action Plan 2020Prepared by the Department of

ContentsForeword1Ireland for Finance Strategy3International promotion3Changing nature and complexity of IFS landscape in Ireland4Horizontal Priorities and headline actions — progress in 20195Action Measures for 202012Pillar 1 Operating Environment12Pillar 2 Technology and Innovation15Pillar 3 Talent17Pillar 4 Communication and Promotion19Appendix 1: Progress between January and June 202023Appendix 2: List of Acronyms25


ForewordI am pleased to introduce the Ireland for Finance 2020 Action Plan, which is the first Action Plan to be publishedsince the formation of the new Government in June of this year. My appointment as the Minister of State at theDepartment of Finance with special responsibility for financial services underlines the Government of Ireland’scommitment to the growth of the international financial services sector in Ireland.I would like to acknowledge the work of my predecessor, Michael D’Arcy, for his development of the Irelandfor Finance strategy and his efforts in developing this Action Plan also. I would also like to thank the variousGovernment Departments and agencies, particularly IDA Ireland and Enterprise Ireland, the public sectorHigh Level Implementation Committee, the Industry Advisory Committee, and the industry representativebodies, who have helped develop this Action Plan and who will lead the implementation of the individual actionmeasures contained in it.The original intention was for this Action Plan, which was developed in December 2019, to have been approvedby Government earlier this year and to then have been published in quarter 1. However, this did not happenand while there was not a formally approved Action Plan in place for 2020, I am aware that the various leadorganisations on these Action Measures have been making progress on their measures throughout the year.In addition, this Action Plan has been updated since then to take account of the passage of time and theunprecedented challenge of COVID-19 that we are facing.As we are now in the second half of 2020, I believe that our energies must be focused on developing our ActionPlan for 2021. This plan will have to take account of the challenges of COVID-19, Brexit readiness, and howthe international financial services sector can assist Ireland in its national economic recovery. I look forwardto continued engagement with all of the international financial services (IFS) stakeholders as we achieve ourvision of:· ensuring that Ireland continues to be a top-tier location of choice for financial services companies providingspecialist services to a global customer base;· enhancing our competitiveness by implementing a series of measures targeted at improving our operatingenvironment, nurturing and developing our talent, encouraging innovation and technological advances, andincreasing the level of understanding of the success of the industry through better domestic and internationalcommunication; and· placing Ireland at the forefront of positive industry developments in products, services and operationalmodels so that Ireland is recognised as the jurisdiction in which world-leading expertise in financial servicesand technology combine and innovate.Seán Fleming TDMinister of State for Financial Services,Credit Unions and InsuranceDepartment of FinanceOctober 2020Ireland for Finance1


Ireland for Finance StrategyIreland for Finance is a strategic framework tosupport the further development of the internationalfinancial services sector in Ireland to 2025. Thevision of the strategy is for Ireland to be a top-tierlocation of choice for specialist international financialservices and to enhance and protect our futurecompetitiveness.The framework consists of four Pillars and threeHorizontal Priorities.· The first Pillar focuses on the operatingenvironment. The objective under this Pillar is toensure the policy, culture and legislative conditionsunderpinning international financial services willsupport growth.· The second Pillar focuses on technology andinnovation. The objective under this Pillar is toprovide a collaborative approach to addressingemerging challenges and opportunities intechnological developments.· The third Pillar focuses on talent. The objectiveunder this Pillar is to ensure that we continue tohave skilled people to meet the demands of theinternational financial services sector, includingmeeting needs for new and changing skills.· The fourth Pillar focuses on communicationsand promotion. The objective under this Pillar isfocused on ensuring that Ireland’s internationalfinancial services (IFS) offering is communicated toall those who are or may be attracted to in investingin Ireland.The three Horizontal Priorities that apply acrossthe four Pillars are: Regionalisation, Diversity, andSustainable Finance. The first Horizontal Priorityis regionalisation. Regional enterprise growth andjob creation is a key element of national policy,and actions taken under Ireland for Finance willapply that principle in a variety of ways, includingsupport for firms to establish operations in regionallocations and support for the provision of coursesand professional development in higher educationalinstitutions across the whole country. The secondHorizontal Priority is diversity. Workforce diversityis important for business, including financial servicesfirms. Actions taken under Ireland for Finance willraise awareness of the need to increase diversityin the sector and, over the life of the strategy, toseek to identify concrete actions that can be takento secure better representation and participationof a number of groups at all levels in the industry.The third Horizontal Priority is sustainable finance.Sustainable finance is the capital required to tackleclimate change, and actions under Ireland for FinanceIreland for Financewill increase the profile, knowledge, understandingand commitment to providing international financialservices to meet the imperative of combating climatechange. The horizontal priorities align with andsupport the objectives of Project Ireland 2040as outlined in the overarching Strategy.InternationalpromotionThe Ireland for Finance strategy was launched by theMinister for Finance, Paschal Donohoe TD, and thethen Minister of State for Financial Services andInsurance, Michael D’Arcy TD, in April 2019. Thelaunch was held in Iveagh House, and it was attendedby a large number of executives and financial sectorleaders from across the industry. A number of gueststravelled from many different locations abroad for thelaunch. It attracted extensive media coverage, bothdomestically and internationally.During the following months, a number of visits to keyglobal markets were held to launch the Strategy andto further promote Ireland as a top-tier location ofchoice for specialist international financial services.This itinerary included Brussels, London, New York,Hong Kong and Tokyo. It included engagements withsenior executives in firms across a range of financialservices sectors in each city.These international launches of Ireland for Financeattracted keen interest from the financial press andwere covered by the Wall Street Journal, the FinancialTimes, Bloomberg, the Nikkei, and Sky News.The Ireland for Finance team also undertook a seriesof engagements with professional and representativebodies to brief them on the Strategy and theGovernment’s goals for the sector. Among theindustry organisations briefed were the Federationof International Banks in Ireland, the Institute ofBanking, Financial Services Ireland, Aircraft LeasingIreland, Irish Funds, the Federation of EuropeanSecurities Exchanges, the Irish ManagementInstitute, and the British Irish Chamber ofCommerce.In addition to the team in the International FinanceDivision of the Department of Finance, more than70 officials in the Department of Foreign Affairs,in the state enterprise agencies, and the embassynetwork devoted significant amounts of time topromoting Ireland for Finance and Ireland’sfinancial services offering.3

The Director of International Finance Division inthe Department of Finance undertook five overseasvisits to promote Ireland for Finance, to Hong Kong,London, Luxembourg, San Francisco, and WashingtonDC. Enterprise Ireland1 (EI) organised ten events topromote Irish financial services firms in the fintechsector in overseas markets, and the IDA 2 participatedin approximately 50 conferences where Ireland’soffering for international financial firmswas promoted.The advancement of the Strategy and Action Planwill continue, supported by the Government’s GlobalIreland Strategy to double the scope and impact ofIreland’s global footprint in the coming years withspecific efforts already underway in the AsiaPacific region.A whole-of-government Asia Pacific Strategy waslaunched on 9 January 2020. This new strategyacts as a compass for the future development ofour relations with countries across this diverseand increasingly economically important region.It has a number of high-level strategic objectives,looking towards the enhancement of our politicalrelationships, the deepening of our tradingrelationships, and a focus on raising our visibility.We are committed to the continued promotionof Ireland as a world-class source of fintech andfinancial services products in the Asia Pacific region.We will seek to build on the 151 million of Irishfintech exports currently going to the region and,in line with Ireland for Finance for the developmentof the international financial services sector to 2025,harness, in particular, the opportunities presentedby China, India and other Asian financial markets.harness, in particular, the opportunities presentedby China, India, and other Asian financial markets.Changing nature andcomplexity of IFSlandscape in IrelandThe character and composition of Ireland’sinternational financial services sector willfundamentally change in a number of ways as a resultof the extensive financial services investments wonin recent years, including Brexit relocations and thepipeline of future projects. The industry in Irelandwill become deeper and more diverse.12Enterprise Ireland is the government organisationresponsible for the development and growth of Irishenterprises in world markets.The IDA is the non-commercial, semi-state body forpromoting foreign direct investment into Ireland,helping potential and existing investors establish orexpand their operations in Ireland.4The real impact of Brexit for the industry in Irelandmay not materialise for some years. At present,firms are establishing the foundations of a new orsignificantly expanded presence in Ireland, whilesimultaneously meeting regulatory requirements,reconfiguring their overall EU business, andmonitoring the process of the UK exit from theEU. When this phase is complete, they will thenbegin to consider future plans and ways in which toleverage and develop their new Irish entities. Thefuture conversations with firms will be around back,middle and front office activities, product range anddistribution, service offering, digital transformation,innovation and optimisation.Case Study: Fexco and UniversityCollege CorkFINTECHNEXT is a multi-million euro, four-yearcollaborative research programme betweenUniversity College Cork and Fexco, supportedby Science Foundation Ireland (SFI), to deliverapplied and funded research dedicated todisrupting three key fintech verticals: Treasury& FX, Digital Taxation, and Corporate AssetAdministration.FINTECHNEXT aims to research, design anddevelop the next-generation financial serviceframework and infrastructure for applicationsin three particular areas of financial services,namely, digital taxation, treasury servicesand corporate asset administration throughdeveloping and applying cloud computing andBig Data technologies. The research proposesthe development of innovative products andservices, which will lead to economic and societalprogress and measurable outputs includingpublications in world-leading journals andthe development of highly innovative IP forcommercialisation.Total funding is estimated at 3m, of whichFEXCO will contribute 1.4m, with SFI fundingthe remainder.The Central Bank’s vision for the Irish financialsystem is that it is well-managed, well-regulated, andsustainably serves the needs of the economy andconsumers over the long term. Given the internationalnature of financial markets and the increasinglyinternational aspects of the Irish financial servicessector, the Bank also has a responsibility to considerthe broader impacts of the financial system in cooperation with its European peers. Being part of thiscomplex European financial services ecosystem, theCentral Bank plays an active role in the Europeanframework of regulation and supervision.

Within that framework, it operates a robust andeffective approach to authorisations and supervision.COVID-19 has seen a test of the financial systemlike no other in the last decade, triggered by anunprecedented economic shock (in both scale andspeed) as a result of the public health crisis. Thefinancial system entered the current phase ina more resilient position compared with the onset ofthe financial crisis a decade ago. Indeed, the domesticbanking system played a role in supporting theliquidity needs of households and businesses to datein this crisis, including through payment breaks.The capital buffers that banks have built up in recentyears are now there to absorb those losses; however,these are not limitless.As challenges continue to emerge during thisCOVID-19 period, opportunities still exist and positivetrends toward digitalisation and sustainability needto be reinforced to reimagine the way for businessesand finance to contribute to sustainability and theincreasingly digital future.Ireland for Finance played a key role as a platform todeliver on EU-wide trends and policies on sustainablefinance through consultation with stakeholders toinform the next EU Sustainable Finance strategy tosupport the European Green Deal channellingprivate investment to the transition to aclimate-neutral economy.In addition, the Department of Finance, underthe Ireland for Finance Strategy, carried out a largeconsultation process to help inform the new EUDigital Finance Strategy to reinforce the digital future.Overall, history suggests that regulation togetherwith openness – to trade, capital, and people – and abusiness-friendly regulatory environment have beenkey determinants for the success of financial centres,whose fate has tended to evolve slowly, unless hurriedby economic and political disorder.Case Study: The InsurTechNetworking Centre (INC)Based in IT Carlow, the INC is a newdevelopment that was announced in 2019.Developed in collaboration with EnterpriseIreland under the Regional EnterpriseDevelopment Fund 2017–2020 and inpartnership with Carlow County Counciland Wexford County Council, the INC willcollaborate with the insurance sector to creategrowth in areas such as data science, designthinking, software and games development,the internet of things, and distributedledger technology.Horizontal Prioritiesand headline actions— progress in 2019SUSTAINABLE FINANCETackling climate change is the most pressing challengeof our time. It attracted increased public attentionand action in the last year. The transition to a lowcarbon, sustainable economy will require significantinvestment. The European Commission estimatesthat additional investments of almost 180 billionwill be needed each year between 2021 and 2030if the European Union is to meet its climate andenergy targets3. The EU High-Level Expert Group onaustainable finance4 states that 90 billion investmentper year will be needed in water treatment and supply,and that an additional 50 billion per year will beneeded in transport and logistics. To deliver this levelof investment, mobilising private sector capital willbe paramount.The financial system has a key role to play here.The financial system can be part of the solutiontowards a greener and more sustainable economy.Reorienting private capital to more sustainableinvestments requires a comprehensive shift in howthe financial system works. This is necessary if theEU is to develop more sustainable economic growth,ensure the stability of the financial system, and fostermore transparency and long-termism in the economy.To that end, mobilising private capital is a key priorityof the Commission’s 2018 Action Plan for FinancingSustainable Growth, which aims to further connectthe financial system with the sustainability agenda.Such thinking is also at the core of the EU’s CapitalMarkets Union (CMU) project5 and the EuropeanCommission is to present a renewed sustainablefinance strategy.Significant progress was made in 2019 on theCommission’s Action Plan on Financing SustainableGrowth, with the adoption of two Regulations, oneon benchmarks and one on disclosures, and in June2020, with the adoption of the Taxonomy Regulationwhich establishes a clear and detailed classificationframework — or taxonomy — for environmentallysustainable economic activities, creating a commonlanguage for all stakeholders in the financial system.345Ireland for TXT/?uri tions/sustainablefinance-high-level-expert-group pitalmarkets-union-action-plan en5

Top Tier Location ofChoice for Specialist IFSAnnual Action entTechnology& InnovationTalentCommunications& PromotionPublic – Private Collaboration6

During Ireland’s second Climate Finance Week inNovember 2019, Sustainable Nation Ireland publishedits deep sector analysis, which shows high demand fortraining and professional development on sustainablefinance in the financial services sector.At this event, Sustainable Nation Ireland alsocoordinated a ‘statement of intent’ which was signedby the Banking and Payments Federation Ireland,Financial Services Ireland, Insurance Ireland, IrishFunds, the Irish Association of Pension Funds, and theIrish Association of Investment Managers pledgingto take action across 2020 to mitigate climate changerisk through sustainable finance.In 2020, Ireland will also continue to play anincreasingly important role in international effortsthat support the acceleration of the sustainablefinance agenda. Examples where Ireland is alreadyactive and working with others to share best practiceinclude the Coalition of Finance Ministers for ClimateAction, the Central Bank’s involvement with theinternational Network for Greening the FinancialSystem, the insurance regulators internationalSustainable Insurance Forum, the UN EnvironmentProgramme (UNEP) Financial Centres for SustainabilityNetwork (FC4S) of 30 financial centres which hasa node located in Dublin, and the UNEP FinanceInitiative (UNEP FI). UNEP FI will bring new ambition,building on its dialogue with the Coalition of FinanceMinistries for Climate Action and reaching out toother parts of society to encourage moreambitious action.Ireland for FinanceCase Study: The growth of greenbonds in IrelandBy end of 2019, Ireland was rated number onein the world for green bond listings. Dublin, forthe first time, overtook London as a Green Bondlisting hub. The global issuance of bonds seekingto raise capital in support of climate-relatedprojects has grown substantially in recent years.From 85 billion in 2016 and to 170 billion in2018, the green bond market globally grew to anestimated 230 billion by the end of 2019.Underpinned by coordinated public and privatesector efforts across 2018 and 2019, Irelandplaced considerable emphasis on growing itspercentage of the Green Bond market. Withthe successful issuance of 3 billion in GreenSovereign Bonds in October 2018, Irelandbecame the fourth country in Europe to launchsuch an initiative. In late 2019, the NTMA raiseda further 2 billion, bringing the total amountof Ireland’s State green bonds dedicated to Irishclimate related projects to 5 billion. In parallelwith this, Ireland’s semi-state energy utilitycompany ESB placed a 500-million GreenBond during the summer of 2019. In May 2019,the World Bank also jointly listed a 1.5-millionsustainable bond on Euronext Dublin, its firstbond in Ireland in 25 years.In September 2019 the International FinanceCorporation (IFC), a member of the World BankGroup, jointly listing its first Canadian dollarGreen Bond on Euronext Dublin. This was thelargest Canadian dollar-denominated deal everissued by the IFC at CA 750 million, and theproceeds of the five-year Green Bond will financethe IFC investments in green projects, includingrenewable energy, green buildings, sustainableforestry, and energy efficiency. In October, thiswas quickly followed by AIB’s announcementthat it had developed a Green Bond framework.Bringing Irish efforts together, during Ireland’ssecond Climate Finance Week in November 2019,it was announced that Euronext Dublin was tohost the Euronext Group Green Bond segmentcomprising 80 issuers and 190 green bondsvalued at 120 billion.7

DIVERSITYOrganisations that are diverse improve collaborationand drive better financial performance by harnessingthe power of different experiences, knowledge andskills. Diversity is good for business, and genderdiversity can affect the process and quality ofdecision-making. It can guard against groupthinkby bringing a heterogeneity of values, beliefs, andattitudes. Research by the Central Bank found thatfinancial institutions must do more work to ensurethey are sufficiently diverse and inclusive, particularlyat senior level, to prevent groupthink, guard againstover-confidence, and promote internal challenge.In the Ireland for Finance Action Plan 2019, theIndustry Advisory Committee (IAC) was taskedwith developing a Women in Finance charter(WIF charter). The WIF charter, will entail companiesthat sign the Charter committing to supporting theprogression of women into senior roles in the financialservices sector by focusing on the executive pipelineand mid-tier level positions.International comparators such as the UK’s Womenin Finance Charter, launched in March 2016, havebeen signed by more than 350 organisations covering800,000 employees across the financial servicessector. Ireland is aiming to build on this internationalexample, and significant progress has been made.In Action Plan 2020, industry has committed to workon a similar charter or seek a suitable and up-to-datealternative and seek signatory organisations.The Government, on its own journey to achievegender balance and diversity across the system,has noted significant progress in this regard.On 8 March 2019, the Government agreed toestablish a Public Sector Network within the 30%Club Ireland. It is intended that this initiative will offeropportunities to promote greater gender balance inthe public sector, in addition to sharing good practiceon promoting women in leadership between thepublic and corporate sectors.There is a long-standing Government target, from theearly 1990s, to achieve a minimum representation of40% of women and 40% of men in the membership ofState boards. This target was first met in June 2019in respect of the overall average membership. At theend of December 2018, the average gender balanceacross the membership of all State boards was 41.5%female and 58.5% male. This is the highest level offemale representation ever. However, the target hasyet to be met by every individual board: fewer thanhalf (48%) of individual boards currently meet the40% target.8On 28 November 2019, the Government publishedthe LGBTI Strategy to ensure that LGBTI people aretreated equally and that their rights are protectedunder this framework.The Central Bank considers a lack of diversity atsenior management and board level to be a leadingindicator of heightened behavior and culture risks infinancial institutions. According to the Central Bankof Ireland, analysis of applications received in 2018for approval to occupy senior roles within regulatedfirms in Ireland (under the Fitness and ProbityRegime) shows that the proportion of applications forregulatory approval of women for senior roles in thefinancial services sector increased to 24% in 2018,compared with 22% in the previous year. Accordingto the Central Bank report Demographic Analysis– Applications for Pre-Approval Controlled Functions(PCF) roles in regulated firms – 2019, the sector withthe largest proportion of women making applicationswas credit unions, where 31% of applications werewomen, followed by banking at 30%. However, inabsolute terms, the total numbers of applications inthese sectors were lower than in each of the othersectors reported. Across all sectors, the proportionof applications by women for approval for board levelpositions increased from 20% in 2018 to 26% in 2019;the proportion on women applying for approval formanagement level positions was higher but remainedstatic at 29% in both 2018 and 2019.In 2020, the work on diversity and gender balancewill continue, pressing to ensure diversity and genderbalance is a priority and agenda point in internationalfinancial services firms. It is also important to continueto drive the agenda to the next level.

REGIONALISATIONRegional enterprise growth and job creation is a keyelement of national policy, and the development ofthe regions is one of the horizontal priorities ofthis strategy.Over a third of international financial services jobsare located in areas outside Dublin. The sector hasa significant presence in a number of regionallocations including Cavan, Clare, Cork, Drogheda,Dundalk, Galway, Kerry, Kilkenny, Letterkenny,Leitrim, Limerick, Sligo, Tipperary, Waterford,Wexford, and Wicklow.REGIONAL DISTRIBUTION OF JOBS35%RegionsDublin65%The enterprise agencies (EI and IDA) actively promotethe advantage of regional locations for the sector,to both existing and target clients. There is an active‘second site’ strategy in which companies in Dublinare encouraged and supported to establish a secondoffice in a regional location.Promoting these advantages will continue to forma key part of the communications process underthe Ireland for Finance strategy.The Regional Enterprise Plans published by theDepartment of Business, Enterprise and Innovationare a key policy response for supporting employmentgrowth across the nine regions, with public andprivate stakeholders engaged in driving the rangeof innovative and practical actions relevant toeach region set out in the plans. An objective of theRegional Enterprise Plans is identifying significantsectoral strengths in each of the regions. This willalso enable the regions to identify the challengesthey face in trying to attract businesses. It will alsoenable the regional plans to link more closely to othergovernment strategies.A number of international financial servicescompanies have chosen to build centres ofexcellence in regional locations in Ireland, takingadvantage of the opportunity afforded by the higherstaff retention rates associated with operationsoutside Dublin. There are many benefits to this focus,such as reduced costs for companies, supporting theregions to realise their full economic potential,and enabling businesses to draw on regional labourpools and well-renowned third-level institutionsthat work successfully with IFS companies.Other benefits include the availability of cheapercommercial real estate, air connectivity, and thequality of life, all of which make locating in the regionsan attractive option for employees and companies.The importance of links between IFS employers,educational institutions (both undergraduate andpostgraduate), and the education and training boards(for school leavers) should not be underestimated.These links are vital because IFS firms in regionallocations rely on local educational institutions toprovide a skilled workforce, and in turn, IFS firmsprovide career opportunities for skilled workersin regional locations.Ireland for Finance9

HEADLINE ACTIONSStakeholder Engagement – CentralBank of Ireland (CBI)In order to effectively deliver on its mandate,the Central Bank of Ireland works closely withstakeholders in the financial services industry. Inparticular, the Central Bank undertakes stakeholderengagement across a broad range of sectors.Industry representative groups meet with seniorCentral Bank representatives at regular stakeholderroundtables; for other sectors there are lessformal arrangements.A key focus in the Central Bank of Ireland’sStrategic Plan 2019–2021 is to enhance its strategicengagement with the public and relevant stakeholdersat home and abroad.In 2019, and in line with the commitment in Ireland forFinance Action Plan 2019, the Central Bank reviewedits stakeholder engagement in order to consider howbest to ensure that its engagement models include thebroadest range of relevant parties, including industryrepresentatives and non-industry participants suchas consumer groups, public interest groups andacademics. As part of that work, the Central Bankreviewed the stakeholder engagement modelsused by its international peers and the EuropeanSupervisory Authorities. The Central Bank alsoreviewed relevant research and commentaryon the topic.Following that work, the Central Bank of Irelandis committed to reviewing its engagementwith stakeholders.Investment Limited Partnerships BillIreland is a global leader in the investment fundssector with 3 trillion of Irish domiciled funds. Thesector in Ireland is internationally focused, investingin assets and with investors from across the globeand is a large employer both directly and indirectly,distributed across the country. Ireland is also thelargest European domicile for Exchange TradedFunds (ETFs). Financial servi

Big Data technologies. The research proposes the development of innovative products and services, which will lead to economic and societal progress and measurable outputs including publications in world-leading journals and the development of highly innovative IP for commercialisation. Total funding is estimated at 3m, of which