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
The report highlights a number of areas of opportunity for Ireland
debt/financing products and securitisation
Managing global/regional banking products
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