Financial & Insurance Activities

Excitingly, Fintech and Insurtech R&D has gone beyond digitising paperwork. The sector has entered an era of seeking answers to high-level mathematical problems while meeting rapidly evolving security challenges.

Ireland’s own Silicon Valley can be found in Dublin, which is sometimes nicknamed Silicon Docks.

The R&D tax credit has benefited this sector enormously and it provides a generous cash-back offer for financial companies and insurance firms that are developing proprietary financial technologies.

Another way the government is supporting financial research is the Central Bank of Ireland’s Innovation Sandbox. This provides financial and banking companies with a chance to test their technology on real data in a controlled environment.

A specialised hub, instech.ie, partners traditional insurers looking to modernise their legacy systems with tech start-ups.

What R&D looks like in this industry

The R&D tax credit is available for financial innovations and research into insurance technology. Some areas for development that seem to be trending in the Irish financial world are:

• next-gen anti-fraud
• real-time behavioural biometrics
• tokenisation and digital assets
• underwriting driven by AI
• quantum-resistant encryption
• green finance
• open finance
• cybersecurity
• high-frequency trading

One major R&D trend in Ireland is explainable AI (XAI) which aims to combat the blackbox reputation that AI has acquired. XAI focuses on models that provide a transparent reason for their financial decisions that can be read by a human being.

Typical eligible activities

Technological and software innovations in fintech and insurtech can be eligible for the R&D tax credit. They must solve a technological uncertainty to qualify. Some examples include:

• training an AI to analyse how a user types in order to detect account takeovers
• researching a method for moving property onto the blockchain
• developing innovative banking or actuarial software
• creating data models that track a loan’s carbon footprint
• developing a standardized API to facilitate communication between banks and apps

Typical eligible costs

Typical eligible R&D costs for companies in the financial and insurance sectors include:

• plant and machinery
• emoluments of employees carrying on qualifying activities
• other qualifying costs

Most costs associated with investigating a technological uncertainty are likely to be eligible for the R&D tax credit. The project does not have to be successful. NX Advisory can help you to identify and qualify insurtech and fintech research activities within your business.

How NX Advisory helps insurers and financial companies

Talk to us in confidence about your project and we can give you an idea of whether your application for an R&D tax credit will be accepted by Revenue Ireland.

Our tailored approach is ideally suited to the fast-moving world of fintech. We have many years of experience in financial and insurance businesses with R&D tax credit applications. We will give you honest advice as to whether your work will be considered eligible for this scheme by Revenue.

Our proven process ensures that complex R&D is explained in a manner accessible to Revenue officers. We will also ensure you identify all qualifying costs, including those that many companies miss.