IRELAND Law and Practice Contributed by: Niall Esler, Shane Martin, James O’Doherty and Laura Whitson, Walkers
Digital Operational Resilience Act Of broader application is the EU Digital Opera - tional Resilience Act (DORA), which entered into force in January 2023 and became applicable from 17 January 2025. DORA applies to cer - tain financial services firms with the objective of ensuring that entities operating in the EU finan - cial services industry can withstand, respond to and recover from all types of disruptions and threats relating to information and communi - cation technology (ICT). DORA also applies to critical ICT third-party service providers to the financial services industry, and provides a framework for the oversight of such entities by the European Supervisory Authorities (ESAs) – ie, the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA). Payments In response to the advancements in payments and financial services technologies and the increasing challenges faced by the industry with instances of fraud and financial crime, the European Commission evaluated the Payment Services Directive (PSD2) and found a number of positives and some shortcomings. The review culminated in the publication of proposals for an updated Payment Services Directive (PSD3) and Payment Services Regulation (EU PSR). The proposed amendments include: • the strengthening of measures to combat payment fraud; • improving the functioning of open banking; • reinforcing the enforcement powers; • further improving consumer information and rights; and • merging the legal frameworks applicable to electronic money and payment services.
The PSD3 and EU PSR are expected to take effect by the end of 2026, although the timeline is not yet clear. The Instant Payments Regulation entered into force on 8 April 2024, with a phased implemen - tation schedule extending from January 2025 to July 2027. It aims to ensure that instant euro payments are accessible to both consumers and businesses throughout the EU by amend - ing existing EU payments regulations. Artificial intelligence On 9 December 2023, the European Parliament and the Council of the EU reached a provisional agreement on the AI Act, which was subse - quently approved in its final form on 21 May 2024. The AI Act entered into force on 1 August 2024, with most of its provisions set to apply two years after this date, although certain exceptions apply. The ban on prohibited AI systems applies from 2 February 2025. The AI Act establishes a regulatory framework aimed at harmonising rules for AI across the EU. It seeks to regulate provid - ers who market or deploy AI systems within the EU, as well as users of these systems. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models The Central Bank has commented that there was a greater than four-fold growth in the number of payment firms authorised in Ireland between 2018 and 2022. Outside of payments business, which has driven the majority of fintech activity, it is notable that the number of registered VASPs and authorised crowdfunding service providers has increased. Existing VASPs and new entrants are expected
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