The Sunday Business Post Financial Services Report: Niall May on being ready to meet the Brexit Challenge

Audit and Assurance Partner, Niall May, speaks to The Sunday Business Post to discuss the post-Brexit growth of the Irish Financial Services sector and being prepared for the complex challenges  facing firms looking to increase their presence both in Ireland and globally.

Ireland is a top location for British financial sector companies seeking a post-Brexit base, and RSM Ireland is on hand to help address the challenges involved.

 

Brexit has dominated Anglo-Irish political commentary for three years. While it still remains unclear what impact the UK’s probable exit from the European Union will have on the Irish business landscape as a whole, the Irish financial sector has long been touted as one sector primed for post-Brexit growth as UK-based companies either already have or are considering a new EU base of operations.

Dublin has among other financial services offerings such as banking and insurance long established itself as a major global hub for fund administration and securitisation services. Ireland is the fourth largest exporter of financial services in the EU, employing over 40,000 people directly and contributes €2.3 billion each year.

Niall May, Lead Audit and Assurance Partner at RSM Ireland, notes that these credentials, together with the common language, have led to Ireland proving a popular relocation choice as UK financial services firms seek to retain the important 'passporting' rights which allow them to provide certain services across the European Union.

“We have already seen leading banking institutions, such as Bank of America and Barclays, choosing Dublin as an EU base following the Brexit referendum in 2016, we are also seeing other financial services firms committing to moving staff or operations to Dublin and other cities such as Cork, Kilkenny and Limerick,” he said.

In addition, there has been a significant transfer of assets under management to Ireland, as fund managers step up their Brexit contingency planning. But May said this remains a competitive arena.

“Cities such as Frankfurt, Luxemburg and Paris also seeking to leverage from the ongoing Brexit uncertainty in the UK,” he said.

May said the increased number of foreign-owned groups looking to base operations in Ireland has recently seen outsourcing arrangements within the sector coming under the scrutiny of the Irish Central Bank.

A survey undertaken by the Irish Financial Regulator last year noted that companies are engaging increasingly in the outsourcing of risk management and internal control functions and that foreign-owned financial services groups recently established in Ireland, may be considering outsourcing “a substantial level” of their activities to other parts of their organisations.

“The Central Bank has raised concerns regarding a lack of awareness of the scale of these arrangements and the resultant third-party dependencies within many regulated firms,” added May. “In my view, this is likely to be an area of increased focus from the Regulator over the coming years, as the Central Bank looks to ensure that Boards have appropriate oversight and awareness of their outsourcing arrangements and the associated risks.”

As a result of a significant increase in opportunities from global financial services firms looking to establish a presence in the Irish market, RSM Ireland has created a dedicated multi-disciplinary team of Financial Services specialists to work with these clients. This team is comprised of specialists across several areas including Risk Advisory, Regulatory, Technology, Governance, Human Resources, Tax and Audit.

May noted that, as such client’s needs are varied and, in most cases, will be multi-jurisdictional, it is critical that companies get expert advice. RSM Ireland is well placed to do that in its position as a top ten accounting and business advisory firm specialising in providing advice to mid-market business leaders, both domestic and international.

“RSM Ireland as part of the sixth largest network of accountancy firms in the world works closely with their global Financial Services colleagues in providing this expert advice,” he said.  “By working closely with our global colleagues, it allows us to provide our clients with this advice to help them navigate the complex reporting, governance, resourcing advisory and regulatory challenges as they look to increase their presence both in Ireland and globally.”

 

As seen in The Sunday Business Post Financial Services Report, 9th June 2019