Financial Crime World

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Financial Inclusion and Financial Crime: Ireland’s Payments Sector Under the Spotlight

Ireland has emerged as a hub for Payment Services Providers (PSPs), with a record number of authorizations by the Central Bank of Ireland. Over the past decade, technology has revolutionized traditional financial practices, leading to an increase in electronic money and virtual assets. The country’s fintech sector has attracted both indigenous and international companies, drawn by its robust regulatory framework and strategic advantages.

Regulatory Environment

According to the Central Bank of Ireland’s Regulatory & Supervisory Outlook report, Ireland’s regulatory environment is closely aligned with key European guidelines, underscoring the country’s commitment to internationally recognized standards. The report highlights the importance of ensuring effective safeguards and robust governance structures, as well as enhancing risk management practices and strengthening efforts in Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) measures.

Authorizations

As of May 2024, there are:

  • 28 Electronic Money Institutions (EMIs)
  • 25 Payment Institutions (PIs)
  • Six Account Information Service Providers (AISPs)
  • 11 Virtual Asset Service Providers (VASPs) authorized by the Central Bank of Ireland.

This marks a significant increase from seven years ago, with figures from the European Central Bank (ECB) showing that the value of sent payments involving non-monetary financial institutions for 2022 was €83,768.4 million, a nearly 300% increase on 2021 figures.

Safeguarded Funds

The Central Bank has reported a 10-fold increase in safeguarded funds, which stood at approximately €8 billion in December 2023.

Financial Crime Risks

Experts warn that the increasing prevalence of financial crime, including money laundering and online fraud, poses significant risks to the integrity of Ireland’s financial system. To combat this threat, PSPs must prioritize:

  • Effective risk management practices
  • Robust governance structures
  • Enhanced AML/CFT measures

Regulatory Oversight

In a recent report, the Central Bank emphasized the importance of regulatory oversight in ensuring the integrity of the financial sector. The report outlined several key priorities for PSPs, including the need to:

  • Establish robust AML/CFT frameworks
  • Maintain accurate records
  • Conduct regular risk assessments

Conclusion

As Ireland’s payments sector continues to grow, it is essential that PSPs prioritize financial crime prevention and detection to safeguard the integrity of the financial system. By working together with regulatory authorities and industry stakeholders, Ireland can ensure a secure and sustainable financial future for its citizens.