A lack of government support for growth and innovation has been identified as a major barrier to expansion in the financial technology, or fintech, sector in a report carried out by Ibec group Financial Services Ireland.
Fintech is defined as the use of new technology to improve and automate the delivery and use of financial services.
The study examines developments in the sector and as part of it, Amárach Research surveyed a range of firms, from long established companies in the financial services sector - who are adapting product delivery to meet the demands of the digital age - to fintech start ups.
Both categories said government support for growth and innovation was lacking.
Among established financial services enterprises, "regulations governing the financial sector" was the most commonly identified challenge followed by skills shortages and staff costs.
For newly-established fintechs, the biggest challenge was sourcing skilled workers followed by regulations.
Despite the challenges, companies operating in the sector were optimistic about the growth outlook as well as staffing intentions.
86% of start-ups said they expected to grow turnover in the coming years with the average expected growth in excess of 72%.
Among established firms, 73% were expecting expansion in turnover with average expected growth of 17%.
70% said of all firms said they expected to increase headcount over the coming years, despite the challenge in sourcing adequate skills.
The report recommends the establishment of a 'fintech hub' to enhance the development of new fintech firms, while also fostering collaboration and the sharing of knowledge about financial services technology.
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"That's a physical building in the IFSC or nearby where large tech and large FS (financial services) and smaller innovative companies can work with Enterprise Ireland and the IDA, but also with the Central bank Innovation Hub," Patricia Callan, Director of Financial Services Ireland explained.
She said a collaborative eco-system in fintech was already in development in Ireland.
"Larger companies have skills in-house to help them with transformation, but equally they're partnering with smaller fintechs who find it hard to get the regulatory approval themselves so instead they sell their products and ideas in through larger companies."
The report calls for the streamlining of the regulatory process around fintech development as well as investment in education to develop skills in the area.
"We have 105,000 people employed and there is great attractiveness to working in the sector, but we're competing for the likes of software engineers, compliance professionals, for people with Maths skills to work in asset management," Patricia Callan explained.
She called for the unlocking of the €1.5 billion Training Fund, which has already been raised from employers, to develop new programmes to equip individuals with the skills for roles in the sector.
