Innovation within Ireland's banking sector has been hindered by a lack of government funding, claims a newly published report.
The study, Ireland's Fintech Future, commissioned by Financial Services Ireland (FSI), an arm of banking lobby group Ibec, found that limited state support was cited as a major barrier to the prospects of the country's fintech sector.
As many as 72% of respondents said there was not enough funding for innovation while 64% said there was not enough for growth.
Other challenges for the fintech sector flagged in the report include skills shortages and the regulatory compliance burden.
Yet despite these obstacles, the study revealed a general optimsim among the surveyed firms, especially the newly-established ventures. As many as 88% of startups said they expect to grow their revenue over the coming years by an average of 72%.
The figures were slightly less for well-established firms - 73% and 17% respectively. In addition, 70% of all fintechs said they expect to see their headcount increase over the coming years.
"The findings of the survey show that the sector is positive about the future, but it is clear that there are obstacles in place in Ireland, both for developing the next generation of financial services firms, and for longer-established firms who are digitalising their businesses,” said FSI director Fiona Callan.
The report comes on the back of research from UK investment firm Finch Capital which found that funding levels for Irish fintechs dropped by 28% in 2022, amid a 70% decline in funding for fintechs across Europe.
Financial Services Ireland has made a series of recommendations based on the survey results. These include government funding to establish a fintech hub, the unlocking of a €1.5bn surplus in the National Training Fund and calling on the Central Bank of Ireland to establish a more streamlined regulatory environment.