PARTICIPANTS:
- Alex Wright, Event Chairman (Business Journalist and former Insurance Times News Editor)
- Joe Moynihan, CEO, Jersey Finance
- James Roberts, Acting Director, Financial Services, Government of Jersey
- Diane Maxwell, Executive Director of Policy and Risk, Jersey Financial Services Commission (JFSC)
- Michael Johnson, Chairman, Jersey Funds Association (JFA)
- Sarah Bartram-Lora Reina, President, Jersey Association of Trust Companies (JATCo)
- Andrew Quinn, Managing Partner, KPMG in the Crown Dependencies
Alex Wright: As we emerge from the COVID-19 pandemic but are now faced by a host of other global challenges – including the war in Ukraine and the energy crisis – how is Jersey’s finance industry rising to meet these new social, economic and geopolitical problems? How have the economic sanctions imposed affected investments and relationships with clients in Russia and Belarus?
Joe Moynihan: You have to consider the role of Jersey’s finance industry and the impact of the industry on all of those areas. We have to make sure that we continue to do what we have been doing well for so many years. That’s providing a stable, well-regulated jurisdiction to allow for the pooling of global capital into our jurisdiction and then investing that into other jurisdictions. This has helped to address some of the challenges which have resulted from recent events.
We did some work with the Centre for Economics and Business Research last year on the impact of the capital that’s deployed through Jersey into different jurisdictions. The findings are stark. With the capital that we have deployed between 2017 and 2020, the average GDP impact globally is more than £170.3 billion. That capital also supported five million jobs globally per annum. So, it’s a significant impact. We continue to do that and if we expand on that well, it will have an impact on many economies, as well as helping to tackle many of these challenges.
Sanctions are nothing new for international financial services. We’ve been dealing with sanctions on jurisdictions and individuals for a number of years. The government decision is that we follow UK sanction rulings. However, there are some businesses, because of their head office location, that will follow UK sanctions but may also be cognisant of sanctions in other jurisdictions, such as the US or Europe.
So, our sanctions regime is robust. It works. One of the positives of all this is that we are in a position to quickly identify assets being held by sanctioned individuals and to allow the authorities to make the necessary decisions in relation to those assets. That highlights the fact that our regulator and industry are on top of their responsibilities in that regard and that we know our customers.
Diane Maxwell: The recent sanctions work was a great example of Jersey pulling together, with the regulator, government and industry all working alongside each other in a timely and effective manner. The centralisation of our beneficial ownership information and the ongoing obligations to maintain the information as current and accurate, meant that we were able to look closely at what we had and deal with the issues in an efficient manner.
Our data requests to industry were responded to promptly and then our data analytics built a clear understanding of what we were exposed to and where that exposure was.
The strength of Jersey’s collective resources and efforts showed what we’re capable of and how agile we can be in responding to an unprecedented situation.
James Roberts: It was an opportunity to demonstrate the value that Jersey can play in supporting other jurisdictions and being a committed international actor. The speed at which we managed to come together as different agencies and with industry as well, was something that we have seen previously in Jersey. This was the great demonstration of that.
So, in March, in conjunction with the Jersey Financial Services Commission, we put out a statement around the risks relating to customer relationships associated with Russia and Belarus. This was a time to display how we can support other jurisdictions and play a leading role internationally, taking fast action to tackle non-compliance and exchanging intelligence, not just with the UK but across the world.
Andrew Quinn: As well as complying with the sanctions, some Jersey businesses have decided to exit any Russian and Belarus business that they have, even if it’s not yet on a sanction list. In the fund space, there have been some innovative ideas where, for example, you may have had a minority sanctioned Russian investor in the fund and the lawyers have managed to set up a sidecar fund and expel them from the main fund, so the main fund can continue to operate as normal and the other investors aren’t tainted.
In terms of social and economic problems, as an industry, we have to continue to create opportunities for the people on the Island and the young people coming through. Many of those working in Jersey haven’t worked and some haven’t lived in a high inflation, high interest rate environment before.
The last time inflation was above 8% was in 1991, when I left school. So, this is completely new to many of our people. Many of them are really scared. So, we have to help them and promote our industry and show them that there are great opportunities to develop and progress their careers. We also need to support the low and mid-earners in our industry who are really struggling in terms of the cost of living.
Alex Wright: What have been the biggest emerging challenges concerning finance, tax, regulation and legislation over the past 12 months, how have you sought to address them and what opportunities should Jersey’s financial sector now be looking to capitalise on?
Diane Maxwell: We have been working on our regulatory toolkit to ensure that it is fit for purpose and continues to meet international standards including Financial Action Task Force standards. As the regulator, we play a critical role within the national financial crime structure, coordinating with government, other agencies and industry on building our capabilities in combatting financial crime.
Inevitably the work has an impact on industry because it requires further investment in compliance, training and upskilling but it is important if we are to continue as a stable, well-regulated and competitive international finance centre.
In terms of opportunities, fintech broadly, which would include regtech and suptech, presents opportunities for Jersey and has been a focus for us. We are building our risk understanding, regimes and supervisory capability for digital assets including VASPs.
James Roberts: It has been a very busy year and there’s more coming. There are the new trade agreements and relationships emerging from Brexit and changing tax framework coming from the OECD. But Jersey has always embraced such challenges and the opportunities that they bring as well. And we’ve always taken them with a proactive stance and engaged with the international community. That’s something that we’re continuing to do.
In terms of what have we done, there is a new financial services policy framework that was launched at the end of last year. That sets out a new vision for Jersey’s digital transformation, continued compliance with international standards and a transition to being a leading centre for sustainable finance. That will bring substantial opportunities and we want to be a place that offers solutions rather than adding to the complexity.
On the digital side of this new strategy, we are working on an approach to digital ID systems and to identify opportunities to work together to solve some of the long-standing problems that we face, alongside much of the world.
Joe Moynihan: What concerns me most is complacency. We’re in a highly-competitive marketplace. We’re in a strong position at the moment but there are plenty of other jurisdictions that want to steal our lunch. So, we’ve got to be forward-looking. We have to be conscious of the trends in the wider market and make sure that we’re able to adapt. We need to make sure that we keep our focus.
We also have to be conscious that competitiveness is not just about price. It’s the overall customer experience. They’re the two areas that we have to keep on top of as we progress.
Sarah Bartram-Lora Reina: One of Jersey’s key strengths is that, when we have faced challenges, we have always worked collaboratively together. Through consultations, working groups and the like, industry, government and the regulator are putting all their expertise together to find the best way forward. That really helps us to stand out.
Alex Wright: Now that the UK’s new trade rules with EU have had a year to bed in properly, how has Jersey’s finance industry – and the Island’s wider economy – adapted to them?
Joe Moynihan: Before Brexit, we were in the EU for goods and people but outside for services, which essentially meant that financial services has always been outside of the EU. So, the fact that the UK was going to leave the EU was never going to have a massive impact on our financial services industry anyway.
The most significant event in recent years that could have had a major impact on industry was the introduction of the alternative investment fund directive. When that was first mooted, the feeling was that this could be detrimental to our funds business. But, government, the regulator and industry worked together to achieve third-country equivalence for Jersey. This meant alternative investment managers, using Jersey as a base, could access European institutional investors and we have been winning business off the back of that.
So, what we were able to provide up to and after Brexit has been certainty for many fund managers, which has made the jurisdiction very attractive. Probably the biggest impact of Brexit, however, is on immigration. Because we’re part of the Common Travel Area, immigration is managed through the UK, which means that we have the same challenge of Europeans coming into the Island because they have to get approval from the UK first. And then, the process of getting approval for people outside of the EU is also slow.
Andrew Quinn: There are good opportunities in what the UK is doing. There are the agreements with Europe and free trade agreements with other countries around the world. The UK have signed agreements with Japan, Australia and New Zealand and there’s another raft of agreements lined up which the Crown dependencies, including Jersey, can benefit from. This will potentially give us free trade agreements for goods and services that we’ve never had before.
There’s also the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which constitutes 11 or 12 countries with who a trade agreement can be done collectively. All these agreements are now opening up and we can capitalise on them, which we hadn’t been able to previously.
Alex Wright: What will the changes to Jersey’s economic substance, ESG fund and prospectus rules, its AML/CFT Handbooks and the enhancement of JFSC registry’s digital platforms mean for the finance industry?
Andrew Quinn: It will continue to help us to be a leading international financial services centre. The economic substance rules will help us to meet the EU’s requirements. It has also created more economic activity in the Island and delivered a clear and tangible benefit.
In terms of ESG, it’s massive. ESG is considered by many to be the biggest driver of global change since the invention of the internet. It’s going to completely change the way we operate. That’s because, if we don’t take ESG seriously, as most leading EGS commentators have noted, the negative impact on the world will be irreversible.
Diane Maxwell: In terms of the enhancements to the Handbooks, we’ve a sizeable programme of work underway to enhance and simplify the rules. It supports our strategic anchor of facilitating business integrity and our belief that we need to ensure that the rules are understandable and clear.
We have a world-class system with the registry’s digital platform, which supports our strategic anchor of harnessing technology. During the sanctions work earlier in the year, the national taskforce was supported with aggregated data from the registry in a way that was faster, cleaner and better than before. That’s when it really came into its own.
Michael Johnson: In terms of Jersey’s economic substance, it’s uniquely placed for those clients with a London nexus, both in terms of its physical proximity and infrastructure. Jersey is wellpositioned and easily accessible for fund managers travelling to and from the Island. The same applies to those companies setting up offices here. With a London nexus, it’s easy to control the operations between the two locations.
Sarah Bartram-Lora Reina: All of these changes have helped to future-proof us. The beauty of the registry’s digital platform is that it drives efficiency. You can adapt it to handle the data you need.
Alex Wright: Jersey recently surpassed 500 registered private funds – how has it managed to achieve this and which of the Island’s funds, trust and family offering have experienced the strongest growth and which are the biggest emerging areas of interest?
Michael Johnson: It’s 38% year-on-year growth for the Jersey Private Fund (JPF). The primary reasons why the JPF regime has been such a success and had such strong take-up are that it’s quick, relatively inexpensive, perfectly suited for small numbers of sophisticated institutional investors and crucially has smart regulation where it matters. It also suits what we’ve already established in terms of utilising the principal private placement regime.
Nearly every manager is now aware of and using the JPF regime, from the large multi-asset class, global asset managers through to first-time fund managers with their first fundraise. Some of the larger locations can’t get these types of funds launched anywhere as quickly as we can in Jersey. So, if you’re raising a fund and want to close as quickly to safeguard investors who are committed in principle, the JPF is the perfect vehicle.
The JPF has undoubtedly benefitted the Jersey fund administration industry and the wider ecosystem around funds, so we’re delighted to have it on our shelves.
Jersey has also always had a strong weighting to the alternative sector, which has had year-on-year increases in its allocations due to other macroeconomic factors, like longevity of pensioners and irrationality of equity markets. So the pie is effectively getting bigger and with that set to continue in the current macroeconomic environment, Jersey is well placed to keep hold of its growing piece of the pie.
Sarah Bartram-Lora Reina: Many family offices whom are serviced by trust company businesses are seeing that where families have much additional wealth they’re looking to use it in a different way. They’re trying to find the right solution for investing it into certain categories. The Jersey Private Fund lends itself to be the best solution. So, we’re seeing an uptick in that as a solution for our clients.
While funds are undoubtedly the biggest growth area, we’re still seeing growth in both our family office and private client services. This is for all the same reasons that funds are growing. It’s our depth of expertise, the qualifications of our staff and the Island’s stability and excellent governance.
Alex Wright: Jersey is fast becoming a hub for wealth management for emerging markets such as Africa and Asia – what is Jersey doing to attract the business to its shores?
Joe Moynihan: In recent years we have seen the growth in wealth in those jurisdictions. Wealthy individuals and institutions in those jurisdictions have the same desire to diversify their assets as any other, which makes Jersey an attractive proposition, because they like the quality of the regulation and the stability that we offer.
From our point of view, the messaging is much the same as for other investors. This is a quality jurisdiction with a wealth of expertise, a strong rule of law and an independent judiciary.
So, what are we doing to attract those businesses? Jersey Finance is working with member firms to promote the jurisdiction and get the Jersey brand into those markets. The key message is that we are a highly-regulated jurisdiction and we’re only interested in quality business. That work is ongoing. We meet with the professionals in those jurisdictions and make it clear the type of business we’re interested in and the type we’re not interested in. We want to make sure that the business coming through is the type that we can stand over. That’s a part of what we do.
As well as meeting the professionals, we’re forming relationships with banks and, in some cases, with regulators and governments. Also, as our membership is interested in those markets, we provide them access either through our own or sponsored events, or arranging meetings, sometimes making introductions. That activity will continue.
We appointed a representative in Johannesburg 12 months ago, because we felt that the business opportunity was there and that we could get even more business if we had the right person on the ground. Dr Rufaro Mucheka, who we appointed, is doing a fantastic job and we’re seeing a big increase in business, both investment into South Africa through Jersey and coming out as well.
We will be doing something similar in Singapore. That’s because what distinguishes us as a jurisdiction is our people in the regions and they understand how best to land those messages and form relationships with the people on the ground. That has really helped the jurisdiction during the pandemic. As jurisdictions start to open up, the fact that we had people on the ground has also made it much easier for us to continue to promote Jersey.
Sarah Bartram-Lora Reina: I was lucky enough to go on one of the first trips to Hong Kong with Jersey Finance. With the Asian market, you have to understand their culture and how they do business. That’s what we have been focused on: the education drive and really understanding the dynamics of the market.
In relation to Africa, we have a number of businesses from the finance sector who have their roots out of Africa and have been here for many years, as well as other large organisations that have offices in Asia or in Africa and use that to facilitate relationships and cross-border transactions.
Andrew Quinn: One of Jersey Finance’s best initiatives is the fact-based, independent thought leadership that it commissions. For example, the Jersey’s Value to Africa report. We’ve got value to both the private and public global capital markets and the locations where this capital is invested into. The fact-based, independent thought leadership has changed the narrative that Jersey is not simply there to extract wealth from jurisdictions. It’s primarily here to help capital invest in jurisdictions.
Because a large amount of capital flows from Asia into Africa through the UAE, Jersey firms with a presence there use those links to introduce Jersey as a jurisdiction, as well. Any time Jersey goes to market and sells its proposition, there are a number of tried and tested strategies that have worked before. It’s just a matter of continuing to execute on those effectively and not trying to reinvent the wheel.
Alex Wright: What impact has ESG and sustainable investment had on the finance sector and what opportunities is it seeking to capitalise on?
Sarah Bartram-Lora Reina: It’s having a huge impact. Investment managers were quick off the mark in rolling out specific qualifications in ESG and finance, upskilling their staff and launching or starting to incorporate sustainable finance into their investment products. That has had a knock-on effect on the private client space, with trusts and our beneficiaries, who also want to facilitate sustainable finance.
It’s about having that open discussion between trustees, beneficiaries and investment managers about how we can incorporate that, as well as meeting our duties as trustees.
Interestingly, data shows that those businesses that focus strongly on ESG have outperformed those that don’t. So, if you’re looking to enhance a trust fund and you see that data, it is really encouraging. You’re also benefiting the world for the future.
Diane Maxwell: We have completed the first phase of work, which is to address greenwashing by bringing in code requirements to ensure that if a product is claiming to be sustainable, then it really is. Beyond that, collective work is underway with other agencies to agree national ambitions and better understand risk and opportunities for Jersey as an international finance centre. That national picture crystallises the role we play as a regulator in greening finance and financing green.
We are conscious that before we introduce further reporting or disclosure requirements, we need to be confident that consistent, quality reporting and verifiable disclosure is possible. Broadly, that’s the challenge faced by regulators globally.
The work of the International Sustainability Standards Board, which is seeking to provide, within a relatively short timeframe, standardised global disclosure, will be important progress in building that framework.
We are also a member of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), which is a forum for understanding climate change as a risk and keeps us connected to the wider global developments.
Michael Johnson: There is demand for ESG reporting but as yet there are no global standard reporting frameworks, albeit there is a lot of evolving policy. Jersey has always been good at being patient though, waiting for global standards and then adopting and implementing them effectively and with rigour. That will happen here too.
With private equity managers looking at a triple bottom line though, they also obviously consider the commercial benefits of ESG. Where they’re investing in manufacturing, for example, they’re also looking at demonstrable ESG goals and standards around safety as clearly the value of those companies is higher than those with a poor safety record.
The same is true for real estate. On commercial real estate, there are BREEAM targets that need to be hit and most people converting office space over the next 10 years will certainly be looking at those. There’s a large amount of development that makes commercial sense too. Jersey’s weighting towards private equity and real estate therefore puts it in a good space commercially for the development of ESG.
Andrew Quinn: To give you some idea of ESG’s importance, a year-and-a-half ago, we had two people looking at it in our firm at the side of their desks. By September 2022, we will have five full-time staff. It has all been driven by our clients, in terms of helping clients with their ESG strategy, building that into their overall business strategy, data collection, reporting and then assurance.
Alex Wright: New funds have been established this year that invest in the likes of cryptocurrency, blockchain and metaverse gaming. What work is being done to provide other such alternative investment opportunities to fund managers and their clients?
Michael Johnson: Jersey has always had a weighting towards alternative investments. At the moment we’re at an inflection point where many of those emerging industries you mention are still at a relatively early stage, although they’re starting to mature and, at some point, may be adopted by mainstream fund managers. At the same time, Jersey has constantly kept an eye on its core assets, which, in the fund space, are currently private equity and real estate.
To take on investment into more emerging industries requires the right type of asset and the right manager. Jersey’s appetite is towards digital assets rather than crypto trading – it’s a
naming convention but an important distinction to make. This is because the traditional fund managers are likely to use digital assets to further an existing investment strategy rather than as a dedicated new strategy into those assets. For example, a venture capital manager may wish to hold underlying portfolio assets in digital form – their strategy is still venture capital but they are using a new mechanism to hold their assets. Therefore, for Jersey, that’s just an extension of what we already do.
As the industry evolves, Jersey will mature along with assets such as cryptocurrency and the metaverse. But right now, we’re in a strong position with our core servicing capabilities and so we can afford to be a little more patient in getting these emerging investments right.
Another interesting angle on this is that many of our venture capital managers are investing in the supporting industries globally. So, although they’re not trading directly in these alternative investments, they’re actively trading in the industries that support them, be it semiconductors or Kubernetes. And so, Jersey has got an indirect exposure there.
Sarah Bartram-Lora Reina: In the trust industry and from family offices, there’s the interest going into digital assets. Certainly, from the trustee perspective, it’s a cautious approach, looking through investing by a fund, because of the risks involved at this stage. At the Jersey Association of Trust Companies we have a working group on digital assets that is focused on building our knowledge for the wider industry. For example, with the likes of initial coin offerings as part of a fund. Trust company businesses are working closely with the regulator to take them through the process of making sure every step is covered and all the regulatory aspects are completed and the appropriate people are on the board. It’s a growing space.
Alex Wright: In which global markets has the finance sector made the greatest strides during the past 12 months and which are the biggest areas of opportunity moving forward?
Joe Moynihan: We have and continue to benefit from the strategic decision that industry and government took almost 20 years ago to expand our global footprint. We couldn’t rely on traditional markets in the UK and Europe. That led to the opening of the offices in Hong Kong and the UAE. And that continues. So, we’re not reliant on any one jurisdiction. In terms of the most important jurisdiction for us, it’s the Gulf Cooperation Council countries, particularly from the family office and private wealth perspective. There’s also good growth coming out of the US. The Monetary Jersey Fund Report 2021 revealed that the number of Jersey-domiciled funds by US promoter origin rose by 18.8% between 2020 and 2021 and that assets by US promoter origin have increased by 22.3% over the last three years and 230% over five years. So, our investment in the US has paid off.
While we haven’t put any resource into developing the private wealth markets in the US, we are aware that parts of the industry are interested and growing that sector. We need to consider our US strategy further in the coming months.
Africa remains another opportunity. The key challenge for us is to make sure that we’re attracting the right type of business and industry that is interested in those markets, understand the risks and the steps we need to take to mitigate them. We have an initiative going on to assist industry in that regard.
There will be opportunities in China and Southeast Asia too as that market continues to develop. That’s the reason why we’re going to put somebody on the ground in Singapore.
Michael Johnson: Many of our member firms are increasing their investment in the US. Venture capital investment came to the fore during COVID, with technological innovation having benefitted us with our weighting there.
Driven partly by current inflation, the next 12 months will also result in a flight to an allocation of more liquid products. So, trustees and pension schemes will place a premium on liquid schemes and with Jersey having numerous liquid funds, we’d expect a greater weighting towards that over the next year.
Andrew Quinn: The US is one of the markets we have identified as a huge growth opportunity. Interaction with colleagues in our US offices is more than ever over the last two years, as their clients are looking to make investments into Europe. It’s a huge market. If we can get the crumbs of the US financial services market, we’ll do well.
Also, we shouldn’t underestimate Jersey’s relationship with New Jersey. We need to play more on that. That is a USP for us that other jurisdictions don’t have and our government has been trying to build on that in recent years.
Sarah Bartram-Lora Reina: For private clients, it’s Africa, Asia and the Middle East. There’s potential with charitable trusts for families too. There’s still a traditional market of the UK, with wealth planning opportunities around that. Also, existing structures migrate to Jersey because of the flight to quality and the strength of our governance. That’s one of our key growth areas.
Alex Wright: How is the Island’s finance sector building on the technological advancements it has made during the pandemic and what is being done in the areas of digital innovation, fintech and product developments?
Diane Maxwell: In support of our strategic anchor harnessing technology, we are investing further in our innovation hub, which spans fintech, regtech and suptech. We commissioned RT Associates to complete some local research on barriers and opportunities for regtech in Jersey, to better understand what the stumbling blocks are and what we can do as a regulator to facilitate change. The report resulted in some clear recommendations and we have published an initial response outlining our ambitions and milestones for the next three years. While work was already underway on a number of initiatives, including for example ensuring our Handbook will be machine-readable by 2024, the report helped to crystallise our prioritisation of what would make the biggest difference.
Regtech has the potential to address some of our resource and capability constraints and to keep us competitive. When it comes to suptech, the opportunities there are substantial too, particularly as we deal with an increasingly complex regulatory landscape. For a jurisdiction like Jersey, we have the advantage of quick and agile collaboration across multiple agencies and industry to make progress.
Michael Johnson: Much of the regtech and workflow automation was queuing up even before the pandemic.
The pandemic then became an accelerator, enabling administrators and lawyers in the ecosystem to work efficiently on behalf of the client and maintain their integrity. So there
have been great strides on eID, onboarding and the certification and verification of documents. But there’s always more that can be done.
This Island will always be agile and adapt. It’s not necessarily down to the regulators to set the technology but rather to set the guidelines required for us to adopt it. That’s the right approach.
Joe Moynihan: We have the fastest broadband speed in the world. It’s one gigabit of connectivity in every home and business on the Island, which is a consequence of strategic calls
by the government that we’d invest in this. It meant that it has been possible to serve a global client base from home during the pandemic because of the telecoms infrastructure we had in place. So, you may have had two partners working at home, their kids home schooling online or downloading Netflix and the infrastructure held up really well. That gives us a brilliant platform to take advantage of all these opportunities afforded by technology.
Many of the big firms are invested heavily and continue to invest in the technology. We have to have the technology in place to better deliver, both on the customer experience but also on the processing, regulatory reporting and risk management.
James Roberts: Only two years ago I was sat around the Jersey Bankers Association table, discussing whether Jersey permits e-signatures, which seems quite surreal now, given that soon after that the legislation was passed that makes it very clear this is allowed and it has become the norm. That’s just one example of how we have made remarkable strides in a relatively short space of time. That’s definitely one positive that has come out of the challenges of COVID.
Andrew Quinn: Because of the technology investment and the agility the workforce now has, we’re better able to attract more talent. They don’t have to be here or in the office either, which helps in terms of being able to offer flexibility, particularly with the current war on talent.
Sarah Bartram-Lora Reina: From a private client perspective, resourcing is a challenge. Digital is a way to help fill those resourcing gaps and it delivers big cost efficiencies. It also provides benefits when having to comply with regulatory risk assessments and data that needs to be captured.
It’s great to see the innovation that’s coming out too. There’s a digital investment firm and a digital custodian of virtual assets based here now. Soon there may be a digital bank associated to a business here too.
Alex Wright: What is Jersey’s finance industry doing to maintain its position as a world leading international finance centre, to win new business and attract and develop tomorrow’s next generation of rising stars and its efforts towards greater inclusion?
Joe Moynihan: We are all conscious of the international trends that could have an impact on our industry and how we will respond to them. We are also aware of the changing demands in the customer base. For example, the requirements of the customers that we serve now are completely different to those of 10 years ago.
We will continue to work with our member firms, government and the regulator, to ensure that we have the correct infrastructure to support the industry, now and into the future. For that, we need to have the right legislation, appropriate levels of regulation and to identify new challenges that will require the regulator and government to come together to find a solution.
As an industry, we will continue to invest in our people. If you take the trust sector, we have the biggest Society of Trust and Estate Practitioners membership outside of London, globally. For a jurisdiction of our size that’s impressive. Most member firms encourage their staff to pursue professional qualifications in their particular sector. Having professionally qualified, experienced people is what has made this industry what it is today and what will drive us forward.
There’s also a lot of work going on in member firms on mentoring and development schemes, both within and outside their organisations. In this vein, we need to ensure that we
are bringing our next group of leaders through. One of the initiatives that Jersey Finance brought in across 14 sectors, which is in its third year now, is our Rising Stars Awards, where firms identify young people in their industry who could be the future leaders.
We had more than 150 nominations this year, with some superb candidates and more than 50,000 votes for individuals. It just goes to highlight the talent we have within our industry that we need to recognise and make sure we nurture and give them every opportunity going forward.
James Roberts: Our diversity is our greatest strength. That can be interpreted in many ways but I’ll emphasise how that works internationally. We’re not just a market to London. There are a huge number of firms we cater to, with bases and operations all over the world. That’s something that we can only harness more of moving forward.
Sarah Bartram-Lora Reina: What really stands out is the individuals we have within our industry, who’ve both got a wealth of experience and are keen about lifelong learning.
Locally, industry is keen to support initiatives such as Project Trident. We get youngsters in and they shadow people and get to feel what it’s like to work in an office. We also support a number of government initiatives. In addition, we’ve got the digital apprentice scheme that’s coming up, which is supported by government and Jersey Finance, wherein the organisations help contribute towards the cost of the student while they’re studying. So, it’s about developing that succession planning for the next generation and the digital skills they will need in this new technologically advanced world.
Diane Maxwell: We are working to ensure our regimes keep pace with changing products and evolving sectors, so that they are fit for purpose and we have the right regulatory tool kit in place to support growth and innovation. That also requires us to invest in critical factors such as training and upskilling, plus our systems, technology and data architecture, all of which is underway.
Alex Wright: Following on the heels of the pandemic, the cost of living crisis has exacerbated the plight of the most needy in society. What work is the finance sector really doing to continue to support those who have been marginalised by the current economic conditions?
Joe Moynihan: It’s important to remember that we continue to employ people locally and spend a lot of money. Our industry spends more than £1 million per day on local goods and services. So, that’s a direct contribution to the local economy.
The contribution of our industry to charities, sports and culture is also significant. There are few organisations on this Island that don’t get sponsored, in one way or another, by the financial services industry.
To mark the 60th anniversary of financial services in Jersey last year we held a charity ball, where we raised more than £60,000 over the year for the benefit of the Association of Jersey Charities. So, as an industry, we make a massive contribution to society.
We’re also providing jobs for the young people coming out of school and college, not only directly in the industry but also in industries supported by us.
We take our responsibilities extremely seriously. Also, we regularly get involved in discussions with government about matters such as immigration and housing.
Jersey Finance and a number of other organisations also help those industries that support the finance industry, such as hospitality and cleaners, by backing campaigns like the living wage. The extra amount it costs firms to pay their suppliers is peanuts in terms of total expenditure but it makes a massive difference to those people’s lives.
James Roberts: Eighteen months ago, five retail banks in Jersey sat around the table and decided to give a substantial amount of money on an ongoing basis to Community Savings.
It’s an organisation that works with some of the most vulnerable people in society who can’t enter mainstream finance for various reasons. It is a great example of the commitment of the industry to supporting people across our communities.
Diane Maxwell: JFSC are on the International Organisation of Securities Commissions’ committee that works globally on investor education and financial inclusion. Last year for
World Investor Week we produced a series of webinars and communications on how to detect and avoid scams and frauds and beyond that, we continue to work on the issue of financial resilience and inclusion more broadly.
Alex Wright: What is your view of the finance industry’s performance this year and what plans are there for the coming year or so?
Diane Maxwell: We’ve had and intend to continue to have, an engaged, constructive relationship with industry. They have been actively involved in the working groups and consultations that support and inform the legislative change underway, particularly in relation to financial crime.
In terms of plans for the coming year, our work continues on building our capability in combatting financial crime. It will serve us well in our MONEYVAL assessment next year but it
remains a long-term goal and the intention is to ensure the progress is continuous and sustainable.
Joe Moynihan: The industry is in a good place. We have our fair share of challenges. But, as we have done historically, we’re able to rise to meet those challenges and find a way past them. Other jurisdictions have had their difficulties, which we’ve also benefitted from.
In terms of the coming year, we’ll be continuing to grow the industry. We have always said that once the restrictions on events or travel eased we will get out on the front foot to promote Jersey. So, we ran one of the first big conferences in London last September.
It was a private wealth conference with 360 people. We also had a week of activities in Dubai, which gave us massive coverage in that region. It was about making sure that the region knew we were active and open for business.
We’ve carried that on this year. Government, industry and the regulator have all got different objectives but ultimately we all share the same goal. We want this jurisdiction to be successful, so we all get around the table, discuss our differences and arrive at a solution.
Andrew Quinn: The industry has continued to grow, even through the pandemic. I see that continuing. Obviously, the fund industry has been a super success. There are many exciting developments coming down the line and, importantly, there’s a good foundation to build on. However, at the same time, we also need to keep on our toes and not be complacent.
Michael Johnson: Increasingly, we’ll be much more selective about the growth that we take on. We want to achieve scale through technology and other means. It’s about looking forward to the emergence of new products and making sure Jersey is well placed to serve those managers launching more liquid products as well.
Sarah Bartram-Lora Reina: On the back of the pandemic, many of our clients have revisited their wealth and estate planning and, where it had become out of date, either restructured or adjusted it so that it’s fit for future family generations.
In terms of plans for the coming year or so, internally, we’re aware that MONEYVAL is coming, so we’re busy making sure we’re ready for that. We also recognise that we need to innovate resourcing. So, we need to adapt our processes by using digital technology to be more efficient. We’re also travelling and going to the jurisdictions that we operate in and building on existing client relationships and developing new ones once again.
