The latest report published by the Federation of International Banks in Ireland (FIBI) indicates that a large portion (70%) of global banking and investment firms anticipates the expansion of their operations in Ireland this year. However, the report also notes that these organizations face considerable issues, particularly with regulatory requirement changes and staff recruitment. The representative organization for international banking and investment entities, FIBI, embodies over 30 global groups in Ireland.
The report, titled “Investing in Ireland’s Future Success,” shows that over 40% of FIBI companies plan on enhancing their workforce numbers this year and intend to make further investments in technology and innovation within the country. Such advancements are projected despite the fact that a significant majority (73%) have difficulties accessing highly-skilled talent.
The growing regulatory expectations were identified by almost two-thirds of the participants as the most prominent challenge the sector expects to face in the coming five years. Fernando Vicario, FIBI chairman, emphasised that the Government and regulatory bodies must sustain their partnership with the industry to ensure an affirmative operational atmosphere.
An important note from Mr. Vicario commended Ireland’s growth into “an important centre” for technology in banking, paving the way for numerous international banks to establish innovation centres or labs in the country, providing significant opportunities for highly skilled professionals.
The report, however, mentioned certain obstacles in sourcing and retaining staff, partially due to high personal tax rates and housing shortages. Roughly 66% of the respondents revealed they have or foresee difficulties in recruiting locally skilled personnel.
Challenges concerning regulatory compliance (45%), digital capabilities including data analytics and artificial intelligence (32%), risk management (32%), and ESG/sustainable finance (23%) were also pointed out by the respondents.
As per the report, international banks in Ireland significantly contribute to job creation throughout the country. FIBI’s member banks and investment firms showed a fantastic growth in workforces, employing more than 14,400 people at the start of 2024, an almost 18% increase from levels before the COVID-19 pandemic in 2019.
Fresh statistics indicate that businesses in the broader commercial, financial, and other service sectors, which are supported by agencies and owned by entities overseas, have pumped nearly €5.3 billion into Ireland’s economy in 2022, marking an uptick of 19.9% compared to 2021. Among these expenses, payroll accounted for over €3.6 billion, with additional expenditure focused on local materials and services.
Furthermore, 2022 saw a 12.9% surge in net tax income from finance and insurance endeavours, climbing to in excess of €6.4 billion, as per figures provided by the Revenue Commissioners. This increase was fuelled by both a surge in corporation tax revenues derived from profits and payroll taxes linked to employees.
Internationally, in 2022 Ireland ranked eighth in terms of financial service exports and currently serves as the operational base for upwards of 30 global banks.