Superlatives are not out of place when lauding the success of Dublin's offshore financial services centre known as the IFSC, which has been phenomenally successful since its began operations in the late 1980's.

In early 2004, IDA IrelandIreland's State agency responsible for inward investment, commissioned Deloitte Management Consultants to review future options  for the International Financial Services Sector in Ireland.

The following is from the introduction to the resultant report: 

Over the last 15 years Ireland has been exceptionally successful in attracting international financial services companies to locate here. The list of international companies with operations here is a “who’s who” of the international financial services sector – Citigroup, JP Morgan Chase, ABN AMRO, ING Group, MBNA, Merrill Lynch, State Street, Unicredito and AIG to name but a few. These companies have been attracted to Ireland for a variety of reasons, including an attractive fiscal and regulatory environment; availability of highly skilled educated workforce; favourable relative cost structure; robust telecoms infrastructure; political stability; and by effective marketing. However, over the last couple of years many in the industry believe there has been a loss of momentum and a slowdown in the growth of the international services sector. 

Few would argue that the global financial services industry is undergoing major change at present. Business models are changing because of advances in technology, advances in telecommunications and the impact of globalisation. The European market is gradually becoming more integrated partially driven by EU initiatives such as the Financial Services Action Plan.

Furthermore, Ireland’s attractiveness as a location for international financial services has also undergone major changes over the past 5 years or so. The corporate fiscal environment is still very favourable although other jurisdictions have emulated Ireland in this respect. The availability of skilled labour is even greater now having been supplemented by returning emigrants from the US and the UK in particular. The telecoms infrastructure has also improved considerably. Notwithstanding these positive developments there are other factors that are less positive. Although Ireland still has cost advantages over many international centres, it is no longer considered to be a low cost location. The cost of skilled labour and property has increased relative to other markets in recent years. In addition other countries/regions have “upped their games” considerably in terms of marketing the attractiveness of locating there. 

Consequently, IDA Ireland has initiated an exercise to revisit and update national strategy and policy for attracting inward investment from international financial services companies. In connection with this exercise IDA Ireland engaged Deloitte to obtain world class advice on global trends and new business models in the international financial services sector and their impact on the potential for further development of the sector in Ireland. 

Launching the IDA commissioned Deloitte report The Future of the International Financial Services Sector in Ireland on December 10, 2004 was An Taoiseach Bertie Ahern TD, David Hanna, Manager International Financial Services Division, IDA Ireland and Derek Moriarty, Financial Services Consulting Partner at Deloitte.  The remit of this report was to identify global trends, areas of opportunity where leadership could be achieved and key future competitive advantages identified.
The report highlights a number of areas of opportunity for Ireland including:

  • Specialist debt/financing products and securitisation
  • Managing global/regional banking products 
  • Funds servicing 
  • Asset management 
  • Pan European mass risk/retail insurance products

Speaking at the launch the Taoiseach said, " I thank both IDA Ireland for their initiative in commissioning this work and Deloitte for producing such a comprehensive report to assist the industry as it looks to the challenges ahead. I would also like to urge everyone to work energetically in 2005 to give consideration and action to the recommendations emerging from the IDA and the Deloitte Report.  It is important that we continue to innovate and develop our current position.  To do so will need a comprehensive strategy with commitment from the public and private sector to ensure its effective delivery."

Download: Deloitte IFSC- International Financial Services Centre Report  

(in pdf format 2.5mb)

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