Fintech is the buzzword of the moment for many in big business and the Government, but what is a truly fintech role rather than simply a job working with IT within banking organisations? Hays Ireland’s James Milligan teases out the differences.

Much like ‘cloud’ and ‘big data’ before it, fintech is the current buzzword in IT. But what is fintech really? What products are being created from the rise of this sector? And is the term being hijacked by the Government and big business?

Until recently, the consensus was that fintech is the use of software to provide financial services. The types of organisations that specialised in this area were normally start-ups with a vision of disrupting established financial services organisations. Traditionally, most people would have pointed to payment companies such as PayPal and, more recently, Stripe as being key innovators in the fintech area.

However, more recently, the definition has expanded. The Accenture FinTech Innovation Lab has identified the following hot areas: big data analytics and predictive modelling; risk management; security; social media and collaboration; infrastructure and operational technologies, crowdfunding and P2P lending.

In response to the start-up disruptors, we are now seeing big investment by the established players in the financial services sector in fintech as a strategy to ensure that they remain relevant. In Ireland, Citi invests millions in its R&D centre in the IFSC to develop cutting-edge products. AIB released an innovative app that allowed you to borrow and pay back money from individual to individual by touching phones, which is aimed at being a differential for the millennial consumer.

‘Until recently, the consensus was that fintech is the use of software to provide financial services’

Globally there is a move towards cashless transactions, with mobile and contactless payments being rolled out by credit card providers and major tech companies such as Apple and Google. Quite often in this process they will acquire start-ups for their technology in order to bring solutions to market more quickly, a recent example was Google’s acquisition of Softcard earlier this year. Large financial services organisations are also funding incubators in the hope that the technology developed by start-ups will be something they can use in future products.

10,000 jobs in the fintech sector?

An area of fintech that is being watched closely is cryptocurrency, with a Blockchain Hackathon due to take place in Dublin next month a clear sign of its growing importance, with by-far the best known cryptocurrency being bitcoin. In the early years, this seemed to be an alternative to the use of traditional currencies. However, this seems to have stalled with issues around governance and criminal behaviour undermining consumer confidence somewhat in this sector. It’s an area to watch closely for future innovation if these challenges can be resolved.

In February of this year, the Government announced plans to create 10,000 jobs in the IFSC by 2020 and in March a Deloitte report said that 5,000 jobs could be created in the fintech sector.

‘Globally there is a move towards cashless transactions’

It would be fantastic news for Ireland if we could create 10,000 jobs in the fintech sector. However, one of my concerns is that the Government and established financial services organisations may be hijacking the term as it is ‘sexy’ at the moment to talk about fintech. One of the trends that I have observed is the rebadging of both organisations and jobs as fintech when they are in fact traditional IT jobs in the banking sector. We need to be careful not to devalue the term.

In my opinion, true fintech jobs are those that relate directly to innovative products such as payment platforms, online banking and cryptocurrencies. These would include roles such as security consultants; data analysts; business intelligence specialists, project managers and developers.

However, it wouldn’t include jobs working on day-to-day activities such as maintaining a bank’s legacy systems or regulatory change, unless it is directly related to fintech.

In conclusion, it is very important that we continue to invest in start-ups in the fintech sector. Ireland could be seen as a key innovator with the right strategy. If we do create 10,000 jobs in new disruptive software products by 2020 we could truly claim to be a world leader.

James Milligan

James Milligan is senior business director for IT and talent solutions at Hays Ireland.

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