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Ireland has a positive presence on the world stage and in order to enjoy continued success Angela Fleming, Tax partner with BDO Ireland, says we need to become more tech savvy.
“At a recent BDO Global Financial Services conference, the focus was on digital transformation and looking at how new technology impacts on client operations,” she said. “What was really interesting from the perspective of Ireland Inc was how technology is changing the landscape of financial services. For me, the conference showcased technologies that are available elsewhere but not currently in Ireland.
“For example, other countries have six or seven methods of digital identity verification, allowing for a fully online client onboarding process. This technology has not been fully adopted in Ireland and has the potential to improve the competitiveness of our substantial funds industry, to name but one sector that would benefit from increased digitisation.”
The chartered tax advisor has over 13 years’ experience in advising clients in corporate tax matters and says technology is the key to the future. But while the digitisation of the sector, along with the regulatory environment, is an important issue, she believes that the financial services industry in Ireland is ahead of the game when it comes to Brexit.
“What is unique about the financial services industry vis-a-vis other industries is that it’s way ahead in preparation for Brexit,” she said. “No-one knows how it will pan out and whether there will be a hard or a soft exit, but businesses in the financial services industry were by far the first movers in looking at how Brexit will impact their business models. We have been heavily involved for a while and while it is definitely a challenge, we have been helping our clients map out the impact of Brexit and to get ready.”
The tax expert believes there has been a huge amount of change in the sector and it is important to recognise that business models have changed. “It’s no longer about the local shop selling to customers in its vicinity – business models are now global” she said. “Recognising this fact is important for the future and tax practices need to evolve with it.”
The potential for inward investment may also be reliant on whether Ireland’s 12½ % corporation tax rate will change but Fleming believes it will remain unchanged and this will continue to make Ireland an attractive prospect for foreign investors.
“I don’t see the current tax rate changing as it has very broad support at a governmental and business level and has been supported by previous governments since 1999,” she said. “It is a key cornerstone of the Irish tax regime and is likely to remain the same.
“This sort of certainty is very important when making decisions about investment and businesses need predictability over the term of their investment.”
Another area in which the financial sector has had a positive impact is encouraging companies to locate in hubs outside of the country’s capital.
“The Dublin region has the lowest level of unemployment in the past decade and that causes challenges for foreign direct investment. Therefore, it’s important to establish hubs outside the capital and this has been done in Limerick, Navan, Leitrim and many other areas,” said Fleming. “Again, the financial services industry has been way ahead of the game by establishing investment in places outside of Dublin.
“The IDA has shone a light on this and is very aware of the need for a nationwide spread so is making a concerted effort to show their FDI clients different office spaces around the country and making them aware that there are plenty of attractive propositions in the west and other locations around Ireland.”
Content adapted from The Sunday Business Post: "Technology is the key to the future of Ireland's financial services"