Increasing regulatory tide is the top concern for international banks here

A significant majority of international banks operating in Ireland identified what they see as increasing regulatory requirements as the greatest challenge for their sector in the next five years.

The finding is included in a report by the Federation of International Banks in Ireland (FIBI), an industry body, and is based on a survey of its members.

The federation is the representative body for international banks and investment firms in Ireland, and has more than 30 members that collectively employ over 14,000 people here. Once largely located inside the IFSC in Dublin, the banks are now spread across the country.

The survey finding is consistent with views shared privately by senior figures in international firms, who frequently express frustration that regulations that are essentially the same across the euro area are applied more rigidly in Ireland, with a significant impact on costs, delays and certainty of outcome.

International banks with operations in multiple EU jurisdictions have a unique perspective on differences in regulatory implementation.

The Central Bank regulatory arm, headed by Central Bank Deputy Governor Sharon Donnery, dramatically toughened a once hands-off approach to policing banks and other financial services firms in the wake of the financial crisis more than a decade-and-a-half ago.

The Central Bank has invited a review of one element of that, its implementation of the fitness and probity process to vet senior appointments in financial services firms.

Such rules are common across Europe, but the Irish implementation was heavily criticised in a recent appeal case taken to the Irish Financial Services Appeals Tribunal that the regulator lost.

Meanwhile, hiring is flagged as a challenge by an even bigger majority (73pc) of international banks here who said they face challenges accessing talent with key skills, a reflection of the buoyancy of the labour market.

The report found bank chiefs are optimistic, with 70pc of its member firms expecting to see growth in their Irish operations this year.

More than 40pc of the firms are predicting they will employ more people in 2024 and invest more in technology and innovation in Ireland.

Fernando Vicario, chair of FIBI and the CEO of Bank of America Europe, said the international financial services sector in Ireland is now a significant contributor to the Irish economy and has established itself as a major European and global hub for international banking and investment firms.

“Employment in FIBI member firms rose by almost 18pc between 2019 and 2024, to over 14,400 employees, and 43pc expect employee numbers to grow again this year,” he said.

“According to the latest figures from the Department of Enterprise, Trade and Employment, foreign-owned financial, business and other services firms now spend €5.3bn directly in the Irish economy each year.”

Reporting On:independent.ie