Millions of financial transactions take place in Ireland every day and management of all this ‘money movement’ lies in the hands of those working in the banking sector. According to the Irish Banking Federation, around 90,000 people are employed across the financial sector in Ireland. The importance of the sector to the Irish economy has been evidenced by the recent banking crisis.
To assist with moving out of the economic crisis, the Government provided a major injection of capital to Irish banks in order to keep them afloat and to allow them to start lending to business again, and NAMA was set up with the aim of getting the banks functioning successfully again. The recovery process is likely to last a few years, but the banking sector will be one of the first to reap the rewards of such a recovery with employment becoming increasingly available.
The Central Bank of Ireland is responsibile for both central banking and financial regulation. The role of the Financial Regulator is to oversee the activities of:
- Credit institutions, investment intermediaries, stockbrokers, financial exchanges, collective investment schemes, funds, investor compensation and related consumer issues
- Life insurance, general insurance and related consumer issues
- Credit unions
- Moneylenders, mortgage and credit intermediaries, the monitoring of customer charges by credit institutions and related consumer issues
The Central Bank monitors and enforces the consumer protection, conduct of business and prudential requirements of all financial institutions operating in Ireland. It also sets the minimum competency requirements for firms.
We are all familiar with the High street banks and building societies in every town and city in the country, but Dublin's IFSC is the hub of the financial services activity in our capital city, and of financial services business activity in Ireland. The IFSC was established in 1987 to attract investment into Ireland from global financial service organisations. Financial services are now Ireland's 4th largest services export sector.
The sector can be broadly divided into four areas of financial activity:
- Accounting and Financial Management – see Accountancy and Taxation Sector
- Banking and related services
- Financial and Investment planning
- Insurance Services
Half of the top 50 banks in the world, including Citigroup, JP Morgan, BNP Paribas and Bank of America/Merrill Lynch are located in Ireland. Over 450 international financial services companies operate within the IFSC, with number also located around the country, including BNY Mellon in Wexford and Statestreet in Kilkenny.
More than 100 Irish companies also provide technology and associated support services to the sector. In addition there is a significant number of indigenous financial services and insurance organisations operating in Ireland such as Fexco, FBD, IFG, AIB Bank, Bank of Ireland, Abbey Capital, EBS, Irish Life & Permanent, VHI, Liberty Insurance and Quintillion.
Getting into Investment Finance
Many young people enter careers in the banking sector after graduating in business, accountancy, economics and financial studies. Others start working in the area on leaving school and build qualifications as they gain experience. The financial services industry has a long history of attracting energetic and ambitious people.
A career as a Financial Investment Manager or Dealer may involve working for a large multinational company or a smaller player with high growth prospects. In Corporate Finance, responsibility can come fast and this is where your problem-solving skills will be put to use quickly.
A degree in Finance or Accountancy would be the expected minimum qualification for these positions. The work of an Investment manager or Trader tends to be a very pressurised and competitive career demanding a high level of concentration and in depth knowledge of the market.
If you like lots of responsibility and the pressure that goes with it, this career may be worth considering. Most investment Banks and Corporations have their own in-house training for Traders and Investment Managers.
It usually takes at least 2 years on the job training before you gain enough experience and expertise to be given the authority and freedom to trade on behalf of your Bank or Corporation.
International Financial Services
The Internatonal Financial Services (IFS) industry in Ireland is undergoing a process of evolution. This sector is a sub-sector of financial services and has grown dramatically in the past 20 years. IFS companies continue to view Ireland as an attractive investment proposition. Skills currently in demand to meet their needs, as reported by EGFSN (Guidance for Higher Education providers on current and future skills needs of enterprise - Springboard 2014/ICT Level 8 Conversion Programme, February 2014) are as follows:
- Product development for the funds industry, and process innovation
- Accountants with experience for the financial services sector
- Regulation and compliance skills
- Project management skills
- Hybrid technologists - business analysts with IT/Systems skills
- Data Analytics skills
The Aircraft Leasing Sector
The aircraft leasing sector is included to form the Financial Services Sector in which there were 16,803 people employed in 2012. Ireland is a leading centre for aircraft leasing. Nine of the of the world’s top ten leasing companies currently operate here, with operations spanning the industry value chain, from sales to asset management and technical services.
Historically, the success of the sector was founded on the establishment of GPA in the 1980’s and the consequent development of local skills and experienced resource pool. More recently, the key factors in the success of this sector have been the favourable corporate tax regime, human resource expertise and the broad tax treaty network. The use of leasing services by the major Irish airlines has also promoted the sector.
Ancilliary service providers such as Shannon Aerospace have also grown up around the major leasing operations.
Activities performed within operations range across a broad spectrum and include sales, remarketing and lease placement, financing operations, acquisition and management, transaction negotiation, execution and deal structuring and technical services including Irish aircraft registration.
Over the past two decades, aircraft leasing has grown from a niche market to a $150 billion industry. Irish based companies own or manage 19% of the roughly 18,000 commercial craft flying today.
Banking can be divided into three areas: Retail banking, which provides services to individual and smaller businesses; Corporate banking, which provides banking services to large organisations; Investment banking, where customers money is put to use to make greater profit by investing in foreign exchange, bonds, gilts and on the stock market.
Retail Banks and Building Societies deal with the every day financial transactions of the public. They provide us with services such as saving and loan accounts, investment accounts, mortgages, foreign exchange and credit card facilities.
Corporate banks provide financial services (advice, lending, clearing, investing deposits and specialist products) for business clients with high turnovers (e.g. in excess of £25 million sterling), such as financial institutions, major companies, and Irish commercial state companies. The leading banks all have a corporate banking division.
Getting into Banking
Many young people enter this area of employment after graduating in business, accountancy, economics and financial studies. Others gain employment on leaving school and may decide at a later stage to arm themselves with further qualifications.
Bank cashiers and other clerical workers require a Leaving Certificate level of education. Most banks seek people who have good communication skills, enjoy public contact and feel comfortable handling large amounts of cash.
Each Bank is overseen by a Bank Manager. He or she has an assistant manager to help with the managerial tasks. Sales representatives and those in executive and management positions usually need a degree in a business or finance related area.
Irish banks have their own professional banking exams which you must be prepared to undertake if you wish to progress through the ranks. The amount of experience and the level of responsibility involved in the particular job influence associated salary levels.
E-commerce is the buying and selling of products and services by businesses or consumers over the internet. An example is the buying and selling of books on Amazon.com or various products on eBay. E-commerce products and services are the methods used by banks and banking organisations to carry out their transactions without necessarily coming into physical contact with their clients. These services include Automatic Teller Machines (ATMs), Electronic Fund Transfer (ETF), mobile banking, online banking, Electronic Data Interchange (EDI) and telecommunication services.
Consumers are shifting from traditional in-branch banking to online banking for many services. Most people now use a smart phone, a laptop or a tablet and this is changing the way banks do business. It is also bringing new alternatives into the market. For example, PayPal provides a service allowing business or individuals to send and receive payments online.
More new ways of conducting financial transactions have emerged in recent years, alongside advances in technology. These Disruptive businesses are providing online services that are changing the traditional face of banking. Disruptive businesses such as Realex Fire/Realex Payments, supply users with an online current account that allows them to pay friends and businesses in real time. Another online service, Linked Finance, is in the business of lending money to projects.
Investment Banking and Funds
Banks must make good use of the profit they make from their customers. All of the larger Banks in Ireland have their own Investment Banks. They also put their customers money to use in order to make greater profit. This is done by investing in foreign exchange, bonds, gilts and on the stock market.
The people who operate this end of the Banking business are known as Traders or Dealers.
A Dealers job is to buy commodity at one price and sell at a higher price. A typical transaction may involve buying 800,000 in US dollars in the morning and offloading it for another currency at a better rate later that day.
Investment Managers usually work for either large Investment Banks or for medium-to-large businesses. Their main function is to help their company find money to operate and grow the business, make acquisitions, plan for its financial future and manage any cash on hand.
You might work for a large multinational company or a smaller player with high growth prospects. Responsibility can come fast and your problem-solving skills will be put to work quickly in corporate finance. A degree in Finance or Business would be the minimum expected qualification for these positions.
Working as a Fund Manager for a Life Assurance Company is another good example of a career in Investment and Financial Management. The fund (money) usually comes from different sources and is then invested and managed by the Fund Manager and his team of financial investment specialists for the benefit of those who contributed to it. The individuals working in fund management i.e. mutual pensions, trust funds or hedge funds must have excellent educational and professional experience aswell financial management.
There are around 12,500 people employed in the funds industry in Ireland according to the Irish Funds Industry Association (IFIA) and almost all of the world's major fund service providers have a presence here.
Getting into Investment Banking and Funds
Many people go into this area having completed a degree in Business Studies or accountancy. Within the funds industry there is such a wide range of services provided and products available that the roles and responsibilities of the people working in the industry and the opportunities available are equally wide and varied, as are the CVs of the people who currently work in the industry.
Careers in the Funds Industry can be directly related to the servicing of investment funds (e.g. shareholder services, fund valuations, custody, fund accounting, client relationship management, compliance, taxation, risk management). There are also many other careers in business support areas such as information technology, human resources, marketing, business development and management accounting.
Imagine a world without insurance. No shipping and travel, no construction, no factories and offices, no doctors or other professional consultants, no motoring - potentially even no home ownership. Without insurance there would be no risk taking. Without risk taking, there would be no businesses and no innovation.
The role of the insurance sector is to provide financial safeguards for organisations and individuals, to protect against unforeseen risks and circumstances.
Insurance companies provide financial cover in the form of 'insurance policies'. Insurance brokers are intermediaries who work on behalf of their clients to find the best insurance product for them.
Many of the retail banks such as AIB and Bank of Ireland offer insurance services, as well as banking services. International insurance companies such as Zurich. Zurich employs close to 1,000 people in ireland at locations in Dublin and Wexford.
Getting into Insurance
The insurance industry has many different job roles. Insurance companies recruit many school leavers and train them in-house. There are several specialist qualifications that can be obtained and The Insurance Institute of Ireland (III) provides qualifications and support to candidates at all stages in their career paths.
Like the banking sector, the Insurance market has seen an increased demand for qualified candidates in recent times. Due to increased compliance standards and regulation set out by the Central Bank of Ireland, those who provide advice to customers within the broader domestic Insurance market are now expected to hold a relevant qualification.
A wide range of opportunities exist in this field for talented, high-calibre graduates - from highly specialised, mathematically driven roles to general business management, from commercial, business development roles to customer-service orientated or financial management roles.
Jobs in insurance involve working in sales, calculating premiums and processing and assessing claims. The business is all about helping individuals and businesses to manage risk in order to protect themselves from catastrophic losses and to anticipate potential risk problems.
According to the Irish Insurance Federation (IIF) there are over 14,300 people employed in this area in Ireland and over half work in life assurance.
Insurance sales today is all about helping clients understand their insurance needs, explaining their options to them and hopefully helping them purchase appropriate insurance policies. The following are some careers you could expect to find in the Insurance Industry:
- Actuaries provide the mathematical and analytical foundations for financial decision-making
- Insurance brokers act as intermediaries between insurance companies and insurance buyers, advising prospective policyholders on the most suitable product for their needs, helping to manage and mitigate potential risks and arranging to put cover in place. Sales representatives sell insurance policies to the clients.
- Insurance claims handlers are responsible for investigating incidents and paying claims
- Reinsurance companies are the industry's own insurers, enabling large and small companies to mitigate their own potential risk
- Risk surveyors provide underwriters - who assess risks, and set the terms and prices of insurance policies - with information on levels of risk associated with each client, and the ways in which those risks could be minimised. Roles include risk surveyors, risk control surveyors, risk analysts or risk advisers, some of whom specialise in specific areas such as fire, health and safety, theft or public liability
- Loss adjusters are independent claims experts who help insurance companies and policyholders resolve complex or contested claims and get individuals and businesses up and running again as quickly as possible
- Insurance Underwriters assess risks and decide whether to accept applications for insurance cover - and on what terms. A degree in business with a professional insurance exam is a requirement for this role
Minimum Competency Requirements
The Minimum Competency Requirements (2006), set out by the Irish Financial Regulator, and the new Minimum Competency Code (September 2011) are designed to ensure that the ability of those involved in insurance and financial services is sufficient to serve the customer.
The principle is that consumers are entitled to a certain level of professionalism, education and expertise from all of their financial service and insurance advisers and that these competency requirements will help achieve this goal.
The Requirements apply to individuals who, on a professional basis, act, for or on behalf of a regulated firm and:
- provide advice to consumers on retail financial products (including general and private medical insurances);
- arrange or offer to arrange retail financial products for consumers; or
- undertake certain specified activities.
Compliance with the Minimum Competency Requirements can only be achieved by attainment of a recognised qualification from an external professional educational body. It is the responsibility of the regulated firm to assess which is the most appropriate for individual employees or principals of the firm and to monitor compliance with those Requirements. Examples of recognised qualifications include:
In 2013, the Irish services sector recorded its largest rate of growth since 2007. The sector is looking forward to futher growth and expansion in the year ahead and beyond. There is a sense that while some challenges remain, the outlook is better for companies in the sector going forward.
Reported skills shortages for the Financial Services sector include the areas of Risk, Regulatory Compliance, Accounting (solvency, financial management, multilingual technicians), Fraud, and Credit control).
The latest EGFSN report (Guidance for Higher Education providers on current and future skills needs of enterprise - Springboard 2014/ICT Level 8 Conversion Programme, February 2014), additionally reports skills shortages for International Financial Services including Accountancy with Funds experience; Regulation and Compliance Management and Project Management. Click here to view report.