A year can seem like a long time in the world of global finance.
At the beginning of 2022, I gave a talk to the industry highlighting how 2021 had been an exceptional year for Jersey Finance and Jersey’s financial services industry.
Off the back of our industry’s 60th anniversary celebrations, I discussed how we were looking forward to supporting global economic recovery in the wake of the pandemic and how Jersey was differentiating itself as an international finance centre (IFC) through its resilience, connectivity, stability and commitment to sustainability.
As we look forward into 2023, the dial has shifted. The pandemic itself is no longer a key issue – but the environment remains challenging, for very different reasons. Inflation, political and social unrest, a war in Europe, a cost of living crisis, supply chain issues, considerable disruption in the energy sector, and market volatility are all impacting and reshaping market activity.
Our industry, however, continues to rise to the challenge, providing innovative solutions to global investors, supporting Jersey businesses and stimulating economic activity in the local economy for the benefit of the Island.
Industry figures for this year reflect that investors worldwide hold us in high esteem. Our funds industry continued to grow in 2022 with assets under administration across our regulated and unregulated regimes surpassing £0.5trn, a new record, while the total value of deposits held in Jersey banks increased to stand at almost £145 billion.
There were also more companies on Jersey’s corporate register than at any time in the past decade. It’s a picture of a healthy industry.
We’ve achieved that through a great deal of collaborative work between government, regulator and industry, and a focus on innovation to enhance our product and service range, further our message internationally and help drive forward best practice in the IFC space.
Over the course of 2022, for instance, we held our inaugural Sustainable Finance Awards as part of our ongoing sustainable finance strategy and vision. The awards, presented at a ceremony in October at Jersey Zoo, championed those in industry who are truly making the changes needed to meet our aspirations for Jersey to become a leading sustainable IFC in the markets it serves by 2030.
Of course, the conversation and need for significant action around sustainability and access to sources of sustainable finance – one of the areas of focus at this year’s COP27 – is only set to accelerate, and we will continue to focus our efforts on this as we go into 2023 and beyond. For instance, we are continuing to build our relationships with other centres through the FC4S network, through which we can play a part in driving and adopting excellent standards in this field.
We also took our message to new markets, including hosting our first ever US Roadshow, taking in new cities such as Miami, San Francisco and Chicago. Continuing to grow and diversify our proposition for the US asset management market is something we set out to do when we launched our US office in New York three years ago.
That decision has proved to be a sound one; the number of US-originated fund structures has grown 61% since we opened our New York office while the value of US fund assets under management serviced in Jersey has risen by 22%, according to Monterey.
As part our global markets approach, we also took our proposition to South Africa with events in Johannesburg and Cape Town, we met with the prime minister of Rwanda as part of the Commonwealth Business Forum, this year held in the country; and we visited Kenya to host a round table event focussed on better understanding of and tackling financial crime.
Further, in Asia we evolved our strategy by establishing a new presence and business development lead in Singapore while in the Gulf region we held a number of events including a women in leadership series and a private wealth conference in Dubai, which drew a full crowd.
Closer to home our flagship private wealth event and funds focus series in London continue to be well attended, maintaining our long standing connections with the capital.
One of the approaches we have long used to keep Jersey relevant on the international stage has been our undertaking of thought-provoking research. Over the years this has led to a number of influential reports being produced that have shifted mindsets and provided insights into the IFC world.
Our ‘global value chains’ report, the findings of which we were able to present to parliamentarians in London in July this year, delves into Jersey’s global economic footprint as a means of illustrating the positive impact the industry makes globally. Researched independently by the Centre for Economics and Business Research (Cebr), the study quantified the full extent of Jersey’s global footprint through metrics of GDP, employment, and jobs.
For an Island of our size the results were outstanding; on average each year Jersey is intermediating £1.4 trillion of capital, in turn supporting more than £170 billion of global output and 5.1 million jobs worldwide. Such findings show we absolutely don’t just talk the talk but very much walk the walk.
Meanwhile, conscious of the importance of digital innovation and adoption in driving forward efficient capital flows, in 2022 we also took the opportunity to refresh our fintech strategy. With a renewed focus on efficiency and productivity through fintech, it will stand us in good stead to embrace the economic opportunities that lie ahead and help us to meet our sustainability objectives.
Of course, 2023 will be another challenging year – and we cannot afford to take our foot off the accelerator.
For investors across the private and institutional space, the year ahead will likely be defined by instability – but Jersey has proven to be an IFC of stability, expertise and experience, and those are qualities that will be highly prized in the coming 12 months.
Naturally, we will need to work hard including as we gear up to a critical MONEYVAL assessment – but our focus on nurturing a diverse skills base, on developing our sustainable finance capabilities, and on integrating fintech into our ecosystem should stand us in good stead.