Innovation: FinTech Centre of Excellence Project

Nurturing Innovation in Ireland's Financial Technology Landscape

The most notable business achievements stem from collaborative endeavours. The proposal to build a FinTech Centre of Excellence (FTCoE) is an initiative led by the Ireland South East Financial Services cluster, supported by the Enterprise Ireland REISS feasibility grant.

This project seeks to establish a cutting-edge Fintech Centre of Excellence in the IDA Business & Technology Park, Kilkenny with a purpose-built facility adjacent to international financial services and fintech firms including CluneTech, TransferMate, Immedis, Taxback International, State Street and Carne Group.  The FTCoE aims to serve the needs of the start-up / scale up financial services and fintech sector regionally, nationally, and internationally.

The opportunity for collaborative growth:

The Central Bank of Ireland Innovation Hub allows FinTech firms to engage with the Central Bank of Ireland (CBI) outside of existing formal regulator/ firm engagement processes. Today, CBI have set out an ambition to implement an innovation sandbox with a thematic approach.

Such regulatory sandbox innovation hubs have revolutionised the way in which traditional regulatory frameworks interact with rapidly evolving technological advancements. These hubs provide a safe space for startups and established companies to test their innovative products and services in a controlled environment, while still adhering to regulatory requirements. They have become a crucial element in fostering a culture of collaboration between industry players, regulators, and other stakeholders.

At Ireland South East Financial Services Cluster, we believe that innovation is at the core of what our cluster members do best. With a dynamic blend of the entrepreneurial spirit of a start-up and the vast resources of a global corporation, we are seeking groundbreaking solutions to address challenges and redefine the landscape of the financial services industry. The proposed FinTech Centre of Excellence (FTCoE) presents a unique and timely opportunity to embrace the CBI ambitions and develop a dedicated space to incubate and accelerate innovative financial products and services. Our ambitious plans aim to nurture the next generation of fintech leaders by exposing PHD FinTech students to entrepreneurship, enabling them to bridge the gap between academia and industry, and equipping them with the skills to drive future advancements in financial technology.

The FTCoE stands out by offering a comprehensive support system through our cluster, including mentorship and collaborative training programmes. This concept envisions a dynamic hub that not only nurtures innovation but also accelerates the success of emerging ventures in the rapidly evolving landscape of financial technology.

FinTech (Financial Technology) refers to the use of technology to create and improve financial services. This includes a wide range of innovations, such as digital payments, peer-to-peer lending, blockchain, artificial intelligence, and robo-advisors.
Several factors are driving FinTech innovation, including the growing demand for digital financial services, the need for improved customer experiences, cost reductions, and the emergence of new technologies like blockchain and AI.
FinTech innovation has the potential to increase financial inclusion, reduce costs, enhance efficiency, and provide better access to financial services for both individuals and businesses.
The rapid pace of FinTech innovation often outpaces traditional financial regulations, creating challenges for regulators to ensure consumer protection, financial stability, and market integrity.
Regulatory sandboxes are a response to the need for regulatory frameworks that support innovation while protecting consumers and the stability of the financial system. They provide a controlled environment for FinTech firms to test new products, services, and business models under the supervision of regulators.
Regulatory sandboxes allow FinTech firms to test their products and services in a live environment without full compliance with existing regulations. This helps both firms and regulators understand the implications of new technologies and business models.
The primary objectives of regulatory sandboxes are to foster innovation, enable adaptive regulation, protect consumers, and maintain market integrity while addressing regulatory challenges associated with new technologies.
Regulatory sandboxes are overseen by financial regulators who provide guidance and safeguards to ensure that testing within the sandbox remains within defined parameters to protect consumers and the financial system.
Firms seeking to participate in a regulatory sandbox must meet specific criteria, which may include demonstrating the innovative nature of their product or service, outlining potential benefits to consumers, and showing a commitment to regulatory compliance.
The sandbox environment allows FinTech firms to test their innovations with a limited number of real customers under the regulatory oversight, providing valuable insights for both the firms and regulators.
Regulators provide feedback and guidance throughout the testing process, assisting firms in understanding and meeting regulatory requirements while ensuring consumer protection and market stability.
Upon successful completion of the testing phase, firms may be granted regulatory approval to launch their products or services in the broader market, often subject to certain conditions and ongoing monitoring.
Despite the benefits, regulatory sandboxes have faced challenges such as ensuring a balance between innovation and regulation, managing potential conflicts of interest, and addressing cross-border regulatory issues.
Regulatory sandboxes have gained momentum globally, with various countries establishing their own sandboxes to foster FinTech innovation while maintaining regulatory oversight.
International collaboration between regulators is crucial to address cross-border challenges and establish common standards for regulatory sandboxes to facilitate innovation in a consistent and coordinated manner.
Regulatory sandboxes are part of a broader shift towards "regulatory innovation" where regulators are seeking agile and flexible approaches to keep pace with technological advancements and support responsible innovation.
Regulatory sandboxes have the potential to facilitate the development of innovative financial products and services that can improve access to financial services for underserved populations, thereby promoting financial inclusion.
Innovations tested within regulatory sandboxes should take into account ethical considerations, such as data privacy, cybersecurity, and fair treatment of consumers, to ensure that advancements benefit society as a whole.
Regulatory sandboxes emphasize the balance between fostering innovation and managing associated risks, including financial stability, consumer protection, and compliance with existing regulations.
The evolution of regulatory sandboxes and FinTech innovation will continue to play a significant role in shaping the financial services landscape, driving changes in regulations, business models, and consumer experiences.

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Liam varley

Vice President - Cyber security - State Street

Liam is an experienced Cyber Security Manager with a demonstrated history of working in the information technology and security industry. Skilled in Incident Response, People Management, Talent Development and Process improvement. Strong SOC and Talent Management experience with a MSc in Computing focused on Applied Cyber Security from Technological University Dublin. While also holding certs in GIAC SANs Incident handler (GCIH) & Cyber Security Leadership from the Professional development academy.

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