GLOBAL BUSINESS: A VIEW FROM THE CHANNEL ISLANDS
The technology edition NOVEMBER 2021 - JANUARY 2022
• cyber risks • regtech • ai and machine learning • death of banks? • streamlining payments
ISSUE 75 NOVEMBER 2021 - JANUARY 2022
How technology is helping brands better connect to their customers
digital thinking THE TECHNOLOGY AND digital edition of Businesslife is always one of our most popular – partly, I suspect, because the advance of digitalisation is moving so rapidly that we are seeing change unfold before our very eyes. It was Canadian Prime Minister Justin Trudeau who said that the pace of change we are witnessing at present has never been so fast, but will never be this slow again. Not only is that summary borne out by many of the topics we explore in this issue but, as you will read, that pace of change has, in a number of areas, been accelerated even further by the Covid-19 pandemic. Our article on the digitalisation of payments across business sectors – but specifically in the world of fund and wealth admin – is a case in point. We hear how tales of administrators getting in their cars and having to race across the islands to gather signatories for payments during lockdown periods have led to the sector finally getting to grips with payment automation and digitalisation. However, as our article starting on page 52 also highlights, such technological developments don’t just require action on the part of the banks and the controllers of the financial systems. Change also places a burden on firms in the sector, and may require cultural as well as system updates.
WORK FROM ANYWHERE Another issue accelerated by the pandemic has been that of remote working. Technology again came to the fore as we all retreated to our homes to work – but just how remote could that homeworking become. In our article starting on page 66, we examine a trend that is beginning to gain traction – people working from different jurisdictions altogether. The argument is that if you are willing to allow your staff to ‘work from anywhere’, that actually opens up a far greater talent pool for you to recruit from. However, it’s not for everyone – and some firms remain concerned about crossjurisdiction legal issues, not least the inability to ever physically see their staff. Of course, a third area of tech that has seen acceleration in the past 18 months – but not in a positive sense – is that of cyber crime. As businesses have raced to implement new technologies and systems, and as staff have moved to working at home – often on their own networks – so the cyber criminals have seized the opportunity to strike. Some of the figures highlighted in our article setting out the latest threats and what
businesses can do to protect themselves are startling. Organisations faced a 20% rise in security threats last year versus 2019. In 2020 alone, businesses in the UK faced an average of 686,961 attempts to violate their systems online, equating to an attempted attack every 46 seconds. Four in 10 businesses, and a quarter of charities, reported they had suffered cyber security breaches or attacks in the past 12 months. Moreover, the banking sector has seen a 1,380% year-on-year increase in ransomware attacks – where their systems are disrupted until a ransom is paid. And that was just in the first half of 2021.
RISKS AND BENEFITS Technology is, of course, the great enabler for improved efficiency and cost reduction, but it also comes with considerable risks – risks that are changing at a faster rate than ever. Also in this issue, we look at a couple of big tech-related issues impacting the financial services sector specifically. The first is the question of whether firms really can use sentiment analysis and data to understand how their customers are feeling – and then respond by delivering what they want. It’s a growing trend – and one that could help banks and other financial institutions get closer to their customers. That is, however, if banks even exist 20 years from now. Our article starting on page 26 asks whether the rise of fintechs – and the entrance into financial services of some of the big tech players – might threaten the existence of traditional banks altogether. While offering many organisations the opportunity to enhance their offering and build better relationships, tech, it seems, may also be the biggest threat to some having a future at all. Combined with the pace at which change is taking place – there’s certainly plenty for those firms to think about. And fast! n
Change places a burden on firms and may require cultural as well as system updates
Jon Watkins is Editor-in-Chief of Businesslife
November 2021 - January 2022 3
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Recent developments in Jersey and Guernsey
Does the rise of fintech spell the end of the high-street bank?
up the digitalisation of payment systems, but challenges remain over culture, skills and fraud
34 cyber crime
What are the top cyber risks facing businesses and how can you prevent them?
Artificial intelligence and machine learning promise huge benefits for clients and businesses, but many hurdles remain
12 Appointments Senior job changes in the Channel Islands
18 interview Lee Bosio, Managing Director of regtech business Vaiie, on growth plans for the firm in the coming years
SUB EDITOR Kate Wheal
40 fund administration M&A activity is driving huge consolidation in fund admin – we assess what it means for funds
Why businesses must balance the associated risks of regtech with the dangers of standing still
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Aline Ayotte, Head of Commercial Banking, HSBC Channel Islands and Isle of Man, on the importance of digital delivery
62 customer experience What is sentiment data, and can the insights it provides on customers help firms grow?
Remote working sounds an attractive prospect – but not for every business or professional
Greta Thunberg, online dating, merchant shipping, the Metaverse and so much more
The pandemic has sped
contributors The BL Global Discussion Forum
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David explores how the pandemic has accelerated the need for the digitalisation of payments, not least for fund and wealth administrators. But challenges remain for all those involved.
David, meanwhile, asks what sentiment data really is – and whether the insights it gives companies into the way their customers are feeling really can help them grow their businesses.
Sophie speaks to a host of cyber specialists to identify the biggest cyber threats facing Channel Islands organisations at the moment – and the steps they can take to protect themselves.
The pandemic fuelled a move to remote working, with some even touting the idea of staff being based in different countries. Alex asks whether that could be a reality.
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in the NEWS
GFSC RAISES FEES The Guernsey Financial Services Commission has announced plans to increase licence fees paid by firms from 1 January 2022 by 7.6%. In July, a Commission consultation paper on fees included four main proposals: • An overall fee increase of 10.1% for all sectors • A restructuring of fees for the investment sector • Changes arising from the update to most of the sectors’ laws following the Revision of Laws project • Creating a cap for pension scheme fees. Given the higher than expected level of authorisations so far this year, the Commission said it could proceed with a 7.6% increase rather than the 10.1% on which it consulted. It intends to restructure the fees in the investment sector so that licensees requiring greater supervisory attention pay a
licence fee based on the size of the firm. An upper cap will also be introduced on the level of fees charged per member in a pension scheme to 7,500 members. This is in response to feedback that the previous fee structure discouraged larger pension schemes from considering Guernsey as a costeffective jurisdiction. OGIER PAY GAP REPORT Ogier has published its pay gap data – the difference between the average earnings of men and women. It does not relate to equal pay, which concerns paying men and women equally for the same role and work. While compulsory pay gap reporting has been a requirement for businesses of 250 people or more in the UK since 2017, none of Ogier’s home jurisdictions have similar requirements. Ogier’s report presents data on the firm’s overall gender pay gap, and breaks down pay gaps at different seniority levels. The data shows Ogier’s gender pay gap is a consequence of there being fewer women in senior positions at the firm. HSBC EXPAT EXPLORER SURVEY HSBC has published its 14th annual Expat Explorer study of more than 20,000 people who live and work abroad. This year’s survey indicates that 65% of expats feel optimistic about the year ahead despite the volatility of the past 18 months. The key reason for optimism is expats’ hope of living ‘normally’ again (75%), with 61% feeling positive about potential quality of life. Expats in Taiwan are the most optimistic (85%), followed by those in Australia, New Zealand and Vietnam (all 83%). Overall in the study, which is managed by Channel
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JERSEY WINS MENA AWARD Jersey has been named Best International Finance Centre at the eighth annual WealthBriefing MENA Awards, for the fifth year in a row. The awards recognise companies, teams and individuals that have demonstrated innovation and excellence in serving the Middle East and North Africa market. Joe Moynihan, Chief Executive Officer of Jersey Finance, accepted the award at a ceremony held on 10 November at the Sofitel Dubai Downtown. In addition, JTC won the Independent Trust or Fiduciary Company category, while Ocorian was named Best Trust and Fiduciary Company with Headquarters outside the MENA Region. In addition, Standard Chartered won the Most Innovative Wealth Management Model award.
Done Deals Appleby has acted as Jersey counsel to SparkChange, a provider of carbon investment products and data, on the launch of an exchange traded commodity that gives investors exposure to regulated EU carbon allowances without needing to build complex, costly infrastructure. The Appleby team comprised Jersey Managing Partner James Gaudin and Senior Associates Paul Worsnop and Gemma Whale. HSBC’s Guernsey commercial banking team has supported the Guernsey Recycling Group (GRG) with a sustainably focused funding structure to aid its growth strategy. Based in Guernsey, GRG also operates in Jersey, the UK and the Cayman Islands. It specialises in waste management solutions for island economies, as well as the disposal of hazardous and liquid waste. The Green Loan scheme, introduced in the Crown Dependencies by HSBC last year, offers corporate customers the opportunity to borrow money to support environmental projects. Lawyers from Carey Olsen’s corporate team in Guernsey have advised private equity firm 7RIDGE on its acquisition of Trading Technologies International. The deal is expected to close by the end of the year. Working with lead counsel Proskauer, the Carey Olsen team was led by Partner David Crosland, assisted by Senior Associate James Cooke and Associate Oliver Orton. Walkers’ Jersey team has advised digital-first care company Babylon Holdings on its merger with Alkuri Global Acquisition Corp, a special-purpose acquisition company (SPAC). The company will continue to operate as Babylon. Walkers advised on the Jersey corporate and regulatory aspects of the deal and issues around becoming a listed public company. Partner Jonathan Heaney and Group Partner Dilmun Leach led the team. The Guernsey team at Ogier has advised Disruptive Capital on the establishment and listing on Euronext Amsterdam of Disruptive Capital Acquisition Company, a Guernsey incorporated SPAC – the first SPAC on Euronext Amsterdam to be listed and traded in pounds sterling. Disruptive raised £125m. Partner Craig Cordle led the team alongside Partner Bryon Rees. Investec Bank (Channel Islands) has been part of an international group of lenders for the redevelopment of a 1.2 acre freehold site in Camden, inside the Kings Cross Knowledge Quarter. The £90m debt finance deal for W.RE will enable the developer to create three buildings totalling more than 250,000 sq ft. The project, known as St Pancras Campus, will include office, light industrial and retail space, along with 33 new homes. The commercial elements are already 50% pre-let. n
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MERGERS AND ACQUISITIONS Guernsey software business Fusion Acusoft has merged with UK-based Vega Solutions to form a technology group providing solutions to financial services businesses in the Channel Islands and beyond. The new business will offer core software solutions to banks, trust and company administration, fund administration and pension administration organisations. The merged business, which has a Channel Islands client base of 150 organisations in 20 jurisdictions, has offices in St Peter Port and Reading in Berkshire. Vistra has completed its acquisition of Australia corporate governance, accounting and company secretarial services firm Leydin Freyer. The deal doubles the size of Vistra’s operations in Australia and expands its footprint across the country’s two largest cities, Sydney and Melbourne. Completion of the buy, announced in September, also offers new opportunities to Leydin Freyer clients and colleagues as they look to expand around the world. Leydin Freyer will be rebranded under the Vistra brand. MJ Hudson Group, which provides services to the asset management industry and operates from Jersey and Guernsey, has received full regulatory approval from the Guernsey Financial Services Commission for its acquisition of Saffery Champness Fund Services (SCFL). The acquisition of SCFL, a Guernsey-based fund administration business, was announced on 23 July. JTC has acquired London-based perfORM Due Diligence Services. Launched in 2019, perfORM was set up as an operational due diligence (ODD) business to provide solutions to asset allocators across private credit, private equity, real estate, infrastructure, hedge, crypto and digital assets and long-only funds. perfORM will retain its brand as an independent ODD service provider and will operate as a JTC Group company. Guernsey-based start-up Tenn Capital has announced a funding facility and joint venture partnership with funds advised by Elliott Advisors (UK) and its affiliates. Elliott will provide up to £300m to build Tenn Capital’s proposition, which will allow Tenn to deliver its lending mandate on a global scale. Tenn provides short-term loans secured against residential real estate. Ocorian has finalised its purchase of Nordic Trustee, which provides trustee and agency services for bonds and direct lending in the Nordic region. Nordic will still be led by Cato Holmsen and be run as an independent bond trustee and loan agent with offices in Oslo, Stockholm, Copenhagen and Helsinki. n
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Islands-based HSBC Expat, the Crown Dependencies have risen up the rankings of places to live and work into the top 10, with Guernsey fifth and Jersey sixth. The study suggests locations where a sense of stability has been maintained ranked highly. Almost all expats in Australia, Switzerland and Jersey say their location will be a stable place to live in the next 12 months – Australia (92%), Switzerland (92%), Jersey (90%). Expats’ desire to live and work abroad has not been dimmed by the pandemic. Most plan to stay in their host location for the foreseeable future – 80% intend to stay a year at least and only 7% are planning to move. The study also highlights some of the challenges expats have faced in the pandemic – 63% have been stopped from travelling abroad for business and 90% could not see family or friends in their home nation. • To download the survey, visit www.expat.hsbc.com/expatexplorer-results/ TMF REPORT: PRIVATE DEBT TMF Group and Private Equity Wire have launched the 2021 Global Private Debt Insight Report on how private debt managers view opportunities across the asset class. For distressed debt M&A opportunities, the challenges of Covid mean private debt firms
appear to be waiting for the dust to settle while assessing the impact of the pandemic. There is also a sense that deals will emerge in the next couple of years, but will require managers to be laser-focused as they seek the best investments. Of the 75 managers surveyed, many feel proprietary networks will be a key factor for investors as they assess distressed debt managers. Seven out of 10 said they would be relying on proprietary networks as they take a bottom-up approach to source deals, with only three out of 10 saying they would rely on bank-led opportunities. The study also confirms that ESG is becoming a bigger focus, yet despite increased attention at the pre-investment stage, fewer than 25% of private debt investments are expected to be excluded for failing to meet ESG criteria. One big concern for direct lending managers is that the sponsor-backed mid-market is so crowded. This could lead to managers with strong proprietary networks and research capabilities seeking more attractive opportunities to finance founder-owned and orphaned companies in the lower middle market. IOD DIRECTORS OF THE YEAR The Institute of Directors in Guernsey has announced three winners for this year’s IoD Director of the Year Awards: Alan Bates, Chief Executive at Guernsey Electricity; Olly Duquemin, Chief Executive Officer at Resolution IT; and Alan Roper, Managing Director at Blue Diamond Group. Alan Bates won the Public Sector Award, Olly Duquemin the SME Award and Alan Roper the Large Business Award. n
Jersey: a gateway to Europe for Sovereign Wealth Funds Over the last two decades, there has been a significant increase in Sovereign Wealth Funds (SWFs). Indeed, at the end of 2019, SWFs maintained some US$8trn in assets under management1. This is more than double the value in 20072.
economic and fiscal stability; bringing you peace of mind and a high degree of certainty for the future. With a forward-thinking approach, the Island is at the forefront of wealth management, funds, capital markets and banking3.
As the volume of global investment has increased, SWFs, particularly from Asia, the Middle East and North America, have come together to form ‘super funds’, that have the financial weight to be invested globally across multiple asset classes.
Jersey’s regulatory framework is one of the strongest in the world and it is designed to bring clarity and transparency to the world of finance. The Island also has a highly skilled workforce and key stakeholders work together to develop products and services4.
When it comes to managing SWFs in European markets, Jersey, as an internationally respected financial hub, remains a strategic base that provides a gateway to the continent.
Why HSBC? HSBC in Jersey has a strong track record in supporting the needs of Sovereign Wealth Funds, whether that’s working with the funds directly or through a Corporate Service Provider.
Global account visibility One Jersey firm working with SWFs around the world is Ocorian, which provides corporate administrative services in a multitude of countries. Ocorian uses its global network of offices to support SWFs at both ends of their investment. As part of that support, Ocorian often works closely with HSBC to ensure its clients have the necessary bank account structures in the relevant markets. “It’s great for us to work with a bank like HSBC, that understands Sovereign Wealth Funds. Predominantly, HSBC will have a relationship with the client in their home jurisdiction. This then assists us in setting up accounts in that jurisdiction,” explains Nick Terry, an executive director at Ocorian. “For us as a corporate administrator to then be able to see those accounts from multiple jurisdictions on a single IT platform is very helpful.” Why Jersey? Jersey has been a leading international finance centre for almost 60 years and benefits from a long history of political,
“I’m extremely proud of our proven ability in managing Sovereign Wealth Funds and the reputation we’ve built in such a highly competitive market,” says Aline Ayotte, Head of Commercial Banking, HSBC Channel Islands & Isle of Man. “As a trusted, well-established financial institution in Jersey, we have developed key local relationships to deliver timely, best in class solutions for SWF management and investment. This, combined with access to HSBC’s global network and digital capabilities, allows us to leverage a breadth of expertise across the bank and to consistently deliver for our customers.” HSBC is also able to provide visibility of global accounts from one central, digital platform, making it straightforward for clients to manage accounts in home and investment markets simultaneously. To find out more about how HSBC can help, contact your relationship manager or visit: business.ciiom.hsbc.com/sovereign-wealth-funds to view the video on Sovereign Wealth Funds in Jersey
https://internationalbanker.com/finance/sovereign-wealth-technologys-new-growth-engine/ https://www.worldfinance.com/markets/state-run-sovereign-wealth-funds-continue-to-grow-in-power-and-influence https://www.jerseyfinance.je/jersey-the-finance-centre/ 4 https://www.jerseyfinance.je/jersey-the-finance-centre/ 1 2 3
Issued by HSBC Bank plc, registered in England and Wales number 14259. Registered office 8 Canada Square, London, E14 5HQ. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. HSBC Bank plc, Jersey Branch is regulated by the Jersey Financial Services Commission for Banking, General Insurance Mediation, Fund Services and Investment Business. HSBC Bank plc, Guernsey Branch is licensed by the Guernsey Financial Services Commission for Banking, Insurance Intermediary and Investment Business. In the Isle of Man HSBC Bank plc is licensed by the Isle of Man Financial Services Authority. ©HSBC Bank plc 2020. All Rights Reserved. 211005/NN/316
Appointments Crestbridge has appointed Mike Edward to the position of Chief People Officer, based in Jersey. With a career in human resources spanning more than two decades, Mike has devised strategies and techniques to support change and culture management across businesses. He originally joined Crestbridge on a consultancy basis, with a remit to manage a series of major human resources projects. Prior to joining the firm, Mike worked in banking and financial institutions, including seven years at Deutsche Bank, based in London and New York, and 12 years at asset management firm Brevan Howard in Jersey.
Apex Group has announced two Jersey appointments – Paul Monahan as Head of Corporate Services and Chantal Slabber (pictured) as Head of Client Services and Operations. Paul joins Apex after seven years at Langham Hall, where he was Executive Director and Co-Head of Funds. Prior to this, he was a Manager in the Jersey Financial Services Commission. Having trained in South Africa, Chantal’s early career included PwC and Capitec Bank. She relocated to Jersey in 2014 to work for KPMG Channel Islands and before joining Apex spent five years at UBS Trustees (Jersey), latterly as Head of Operations.
Quilter Cheviot has transferred Investment Manager Oliver Harwood back to his Jersey hometown, having served in the business’s London headquarters for the past four years. Oliver has more than 10 years’ experience in investment management and joined Quilter Cheviot in London in 2017. Most recently, he served as the lead Portfolio Manager for Quilter Cheviot’s Alternative Investment Market strategy. Prior to joining the firm, Oliver spent almost four years with Canaccord Genuity Wealth Management (UK and Europe), followed by two years with Brooks Macdonald.
Barnaby Molloy has been named as the new Deputy Chief Executive of promotional body Guernsey Finance. Barnaby, who previously served as its Operations and Marketing Director, has been with the organisation for five years. He has more than 15 years’ experience in marketing in financial services and gaming, specialising in digital marketing strategy and execution, governance, team-leading and business development. His earlier career included three years with Norfolk Capital Group, five with Sportingbet and two and a half with e-gambling specialist Genting Alderney.
Invicta Wealth Solutions has appointed James Dumont-Gale as a Director on its board, with a brief to add value to the firm’s strategic decision-making and future planning. James joined Invicta in July 2017 and was promoted to Chief Financial and Operations Officer in January this year. He qualified as an accountant with PwC Channel Islands, working in audit before moving into the fiduciary sector. Prior to joining Invicta, James spent two years with Cannon Asset Management and two with IPG Family Office, both also based in Guernsey.
Collas Crill has appointed Guernsey-based Jonathan Keys-Massey as Director of Compliance. Jonathan brings to the new role broad experience in anti-money laundering, compliance, business risk management and relationship management. He joins the firm from Trust Corporation International, where he has served as Head of Risk and Compliance for the past two years, advising the board on compliance strategy in response to regulatory changes. Prior to this, Jonathan held senior roles at Butterfield and Credit Suisse.
HSBC has appointed Kate Morton as General Counsel across the Channel Islands and Isle of Man, but based in Jersey. Kate will oversee the bank’s legal frameworks and manage the legal risks across the its operations in Jersey, Guernsey and the Isle of Man. Having worked with HSBC since May 2005, initially as a solicitor, Kate has worked across multiple locations. Most recently she was located in Hong Kong, where, as Associate General Counsel, she was responsible for managing the legal risk surrounding the distribution of products to retail customers in 10 countries across Asia Pacific.
Nick Bayley has been named as a Non-Executive Director of The International Stock Exchange Authority. Nick has more than 30 years’ experience in financial and professional services, working with regulators and exchanges. Currently he is a Managing Director within Kroll’s financial services compliance and regulation practice, specialising in wholesale markets. Prior to joining Kroll in 2016, Nick was Head of Department, Markets Policy and International Division at the Financial Conduct Authority. Previous roles include Head of Regulation and Head of Trading Services at the London Stock Exchange.
Brooks Macdonald International has made two senior promotions in Jersey, with Peter Davies (pictured) and Stephen Le Lievre both becoming Investment Director. Peter joined the firm in November 2020 and has more than 15 years’ experience in finance. He relocated to Jersey after five years as a Gilt Dealer in the UK Debt Management Office in London. He has also worked for Nomura, EuroTRX, KBC Financial Products and Morgan Stanley. Stephen, who has been in international financial services for more than two decades, joined the firm in 2018, having worked for Société Générale Private Banking, Barclays and ABN Amro.
Vistra has appointed Gemma Voisin as Sector Head for Private Wealth in the Channel Islands. She will also join the main board of Vistra Jersey and become a member of the firm’s Global Private Wealth Sector committee. Gemma has more than 20 years’ experience in finance, specialising in complex structures for high-net-worth and ultra-high-net-worth clients. She began her career with Chase Bank in London before returning to Jersey where she had worked for Capco Trust Company and Standard Charted Grindlays Trust Company. She joined WJB Chiltern in 2002 prior to the management buy-in of Vistra Group.
Investec has named Jane Niles Head of Real Estate Offshore in the Channel Islands. Overseeing a team of 15 across Guernsey, Jersey and the Isle of Man, Jane will provide access for clients to lending, banking and wealth management services, with a focus on real estate finance solutions. She was previously Head of Corporate and Family Office, Guernsey, at Investec Bank (Channel Islands), focusing on real estate lending for family office clients structured via offshore trusts. She joined Investec in 2016 after a banking career in Hong Kong and London, including 11 years with NatWest.
PraxisIFM Group has appointed Daniel Reynolds as its new Managing Director in Jersey, replacing Richard Kearsey, who retires after 21 years with the group. Daniel, who previously served as Managing Director of the group’s offices in the Netherlands, brings more than 15 years of experience working in the financial services industry. He joined PraxisIFM in June 2020, having spent nine years working between Jersey and Hong Kong with multi-jurisdictional trust company Lutea Trustees as a Group Director. Daniel began his career with KPMG, working in financial services risk advisory and audit.
CO MME N T
The ongoing imperative of investing in digital delivery
ALINE AYOTTE Head of Commercial Banking, HSBC Channel Islands and Isle of Man
ne of the key challenges to emerge from the pandemic for financial services firms, including banks, is how they can better use technology to make life simpler, safer and speedier for their customers. Digitising at scale has become a priority for many businesses globally, with their digital journeys having moved into the superfast highway. This is in part due to the global pandemic – Covid-19 is cited as a reason for digitally enabled products and technology being several years ahead of projections (McKinsey 2020). For customers, this speed of delivery can only be a good thing. It can make the ability to manage their finances simpler and more efficient and it can help them feel protected. As far as HSBC is concerned, its digital foundations were enhanced by a $5.5bn investment in technology during 2020, focused on ensuring it could support customers during the global pandemic. It also focused on providing banking services to people and businesses that were accessible, timely and, importantly, future-focused. In 2021, HSBC expects to spend an additional $5.8bn on technology. The indications are that this financial investment in digital technology has translated into significantly different customer journeys and interactions over the past year: ● Across the bank, the value of mobile payments increased 220% in April to June 2020 compared with the same period in 2019. ● There were 1.28 billion log-ins to the personal banking mobile apps. ● Downloads of the mobile app for corporate customers rose 155% during the first nine months of 2020. ● Around 689 million transactions across 236 million accounts were screened every month using analytics technology for signs of money laundering and financial crime.
14 November 2021 - January 2022
These global figures give some indication of the accelerated growing trend in the need and desire for digital usage. But the increasingly global nature of the international finance industries in the Crown Dependencies means that the need for firms in the islands to digitise their own customers’ journeys is just as important. Closer to home, we’re seeing a strong and sustained demand for digital solutions. In the corporate space, for example, there is considerable interest from businesses in the ability to access and generate their own virtual accounts online in seconds, removing the need to go through the account opening process. Increasingly, electronic document acceptance processes are in place, allowing clients to sign the majority of forms digitally, rather than conventional wet signatures, with customer due diligence and Know Your Customer documents also being accepted electronically. Treasury APIs (application programming interfaces) are helping to unlock new possibilities for businesses too, by providing simplified, real-time access to innovative cash management services directly from a client’s own treasury platform, without the need for proprietary bank platforms.
HSBC’s financial investment in digital technology has translated into significantly different customer journeys and interactions over the past year
Cash flow forecasting tools are also providing a quick and easy online access point, enabling businesses to build an accurate picture of their future finances. The message is clear: providing digital platforms to enhance and streamline a business’s operations is essential. Digital solutions can help businesses make smarter decisions, decisions that can ultimately make a positive difference to their business in terms of saving them time and money. For personal customers, meanwhile, technology is being used to provide greater, easier access to investment opportunities, including ESG-linked funds, enabling them to take control of their investment decisions. Digital banking platforms and apps are also enabling islanders to cut down on their carbon footprint and branch visits, apply for services such as credit cards online, or sign their mortgage documents digitally. Regtech is also helping customers manage their affairs safely and securely online – by being smarter in identifying potential cyber crime and fraud, keeping data safe online, and helping individuals and businesses navigate and comply with complex regulatory and reporting requirements. Ultimately, everyone is busy and time-poor, and
people need speedy and immediate access to their money. Changes in customer behaviour are driving an ongoing need to provide access to products and services through their channel of choice, and that means blending the power of technology with the expertise of our real people. This is the challenge for the island’s banks and wider financial services sector. We need to create and deliver fast, easy digital customer experiences; partner with technology innovators to enable new customer benefits; ensure we are resilient and secure; execute with speed and automate at scale. As we look forward to 2022, collectively we need to continue to drive digital progress, with the core aim of making life simpler and safer for our domestic and international customers, ultimately enabling them to stay in control. n
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“We had to go through in excess of 50,000 individuals in less than a year to get all the documentation we needed” How regtech can change customer onboarding for the better PAGE 48
The amount of global spend on AI witnessed by financial markets during 2020, according to the OECD Artificial intelligence and machine learning are taking over business
1.3 BILLION THE NUMBER OF CUSTOMERS HELD BY CHINA’S ALIPAY – A NON-TRADITIONAL BANKING OPERATION Will technology mean the death of banks?
“The maturity of the technology has definitely allowed for customer sentiment to be exploited based on behaviours” Sentiment tech and data is changing the customer relationship
“Even the monarch wasn’t exempt from a reliance on tech to ‘work from home’ in the remote working world”
THE RISE IN SECURITY THREATS FACING BUSINESSES IN 2020 COMPARED WITH 2019 THE TOP FIVE SECURITY RISKS FACING YOUR BUSINESS PAGE 34 “Trust and fund administration companies on the islands are, collectively, making thousands and thousands of payments a day” The need for the digitalisation of payments
PAGE 52 Will remote working open up a wider recruitment pool for Channel Islands firms – including candidates from other jurisdictions?
Amount private equity behemoth Apex Group paid for fund administrator Sanne
16 November 2021 - January 2022
What consolidation will mean for the future of the fund administration sector
PAGE 40 www.blglobal.co.uk
City edition PUBLISHING IN june 2022 FOR EDITORIAL QUERIES, CONTACT firstname.lastname@example.org FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK
Global housing market – boom or bust?
Robert Broughton, Senior Client Advisor at UBS Jersey, shares key findings from the 2021 UBS Global Real Estate Bubble Index HOUSING PRICES AROUND the world have climbed in lockstep to new heights, with urban markets sharing in the spoils. This is noteworthy for two reasons. First, pandemic-related restrictions and the rise of remote working have actually weakened the case for urban housing. Indeed, rents in the cities analysed have declined on average – something that happened rarely in the past. Second, housing affordability in cities was already heavily strained even before the pandemic struck.
A DANGEROUS NARRATIVE For most households, creditworthiness is the main barrier to entering the property market. Once that obstacle is cleared, the low user cost of owning property compared with renting, coupled with the expectation of ever-growing house prices, makes home ownership look attractive regardless of price levels and leverage. This rationale may keep markets running for the time being. But it’s not sustainable in the long run. Households have to borrow increasingly large amounts of money to keep up with the higher prices. As a result, the growth of outstanding mortgages has accelerated almost everywhere in the last quarters and debt-to-income ratios have risen – most markedly in Canada, Hong Kong and Australia. Pressure is mounting on governments and central banks to take action. Lending
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standards, which were relaxed during the pandemic, are being tightened again. Additional hurdles for professional housing investors and foreign buyers already loom on the horizon. Overall, housing markets have become even more dependent on very low interest rates, meaning a tightening of lending standards could bring price appreciation to an abrupt halt in most markets.
stagnating or shrinking populations (like most of Europe), as supply will have an easier time keeping up with demand. Overall, a long, lean spell for cities’ housing markets looks more and more probable, even if interest rates remain low. For first-time home buyers, however, waiting for more affordable prices is
OUTPERFORMANCE QUESTIONED Next to lower financing costs, urbanisation has been the main pillar of house price appreciation in city centres over the past decade. However, city life has suffered a considerable blow from lockdowns, as entertainment and shopping options were reduced and city-centre offices were largely abandoned. The cost-benefit ratio of urban living has taken a sharp turn for the worse. Economic activity has instead spread outward from city centres to their (sometimes distant) suburbs and satellites – and so has housing demand along with it. Consequently, for the first time since the early 1990s, housing prices in nonurban areas have increased faster than in cities since mid-2020. While some of the effects may be transitory, this reversal weakens the case for quasi-guaranteed house price appreciation in city centres. The impact of this development will likely be even bigger in places with
Levels of bubble risk by region
Advertising feature Where are the greatest bubble risks in 2021?
The cost-benefit ratio of urban living has taken a sharp turn for the worse. Economic activity has spread out to the suburbs
rarely an option, given that housing cycles are long-lasting and the timing of bigger market corrections unpredictable – especially if home ownership is a non-negotiable life goal in itself. In light of the shaky housing market fundamentals, caution with regard to leverage is warranted.
LONDON TRAILING Over the past five years, London has recorded the second weakest price growth of all the cities included in the study. But
the beginning of the pandemic in 2020 marked the bottoming out of the local housing market. Between mid-2020 and mid-2021, real house prices in England’s capital increased by almost 4%. The recent recovery of the housing market has been supported by a number of factors. First, financing conditions have become even more attractive. Second, the temporary stamp duty holiday has fuelled sales activity, leading to historically high demand for the Help to Buy financing scheme. Finally, although housing completions have recently increased, the market remains structurally undersupplied. Despite these supportive drivers, London’s housing market has lagged the overall UK market. The rise of home and flexible office models sparked an increase in demand and faster price increases for homes with more space and greater affordability – for example, those outside the city centre. Nevertheless, after several challenging years, London’s prime property prices have stabilised. For now, global travel restrictions and ongoing economic and political uncertainties continue to serve as a headwind to a stronger price rebound. But a relatively weak pound may attract global investors again. The stamp duty surcharge for non-UK buyers, which was introduced in April 2021, will likely slow demand but not discourage it completely.
Worsening affordability, unsustainable mortgage lending and a rising divergence between prices and rents have historically served as forerunners of housing crises. As long as financing costs trend toward zero, property prices, incomes and rents can continue to decouple. But ever higher prices and leverage imply ever higher risks, a spiralling path that will likely prove a dead end in the long term. n
You can can download the full report at www.ubs.com/global/en/wealthmanagement/insights/2021/global-realestate-bubble-index If you would like to discuss this report, or find out how we can support your financial goals, please contact: Robert Broughton, Client Advisor UBS AG, Jersey Branch 1, IFC St Helier, Jersey JE2 3BX Tel: 01534 701107 Email: email@example.com
UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, funds and investment business. UBS AG, Jersey Branch is a branch of UBS AG (a public company limited by shares, incorporated in Switzerland whose registered offices are at Aeschenvorstadt 1, CH-4051, Basel and Bahnhofstrasse 45, CH-8001 Zurich) with its principal place of business at 1 IFC, St Helier, Jersey JE2 3BX. Terms and Conditions are available upon request. © UBS 2021. All rights reserved. www.ubs.com/jersey
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Launched two years ago as part of a plan to diversify Jersey Post, Vaiie – the postal service’s regtech offering – is making its mark. Lee Bosio, Managing Director of Vaiie, discusses how it has found its feet, relations with the regulator and growth plans for the next three years
Words: Jon Watkins Images: John Liot
Where did those qualifications lead you in terms of your early career? When I returned to Jersey, like many, I entered the trust world, which was quite typical at that time. I was fortunate enough to be offered a place on a graduate training scheme for Abacus Financial Services, which provided a great introduction to working life. The best thing about that graduate training format is that it gives you the ability to move around different disciplines and try different roles. After six months in trust, I knew it wasn’t necessarily my calling. But when I moved into the marketing team, something clicked. I liked that I could
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create something – work with agencies and develop creative concepts that didn’t exist before. I found that exciting. From there, I moved to the marketing function at Standard Bank. After a short time there, in 2005, I was approached by a couple of chaps I had been to college with, who had been taken on at a digital agency called E-scape, offering digital marketing, website design and development, and game design for the lottery industry. I was taken on as Key Account Manager and then progressed to Director for the last four years with the company, focusing on content design, customer satisfaction and strategic growth. What’s interesting is that I’ve project managed development teams for probably the past 15 years without ever writing a line of code. I’m not a developer, and my focus has always been on the human side of business – building teams, bringing the right people together, creating the right environment for success, drawing on my degree in organisational behaviour and subsequent qualifications in marketing. I pride myself on getting the best out of people and looking for talent, nurturing that talent and mentoring. How did that lead to your current role? At the age of 36, I decided to take myself out of the world I knew and jump feet first into something completely different – and I joined Jersey Post, which was a surprise to many of my peers. I was very much a digital guy, an agency guy – and I was stepping into the Post Office. But I wanted to put myself into a different industry and really challenge myself. Joining in 2018, I inherited a business called Promail, the communication arm of Jersey Post. The business was
focused on working with banking customers, dealing with their most sensitive data on a managed communication front. We were a very trusted brand supporting more than 20 offshore financial services, banking, trust and utility clients. We also had a situation where our customers, quite uniquely, were asking us what more we could do. They saw us as easy to work with, that we were government-owned, trusted to manage their most sensitive data, and had longevity. They were looking to us to support their strategy in becoming more digital and engaging their customers through new channels – a natural evolution from managing downstream communication to creating an efficient link for our customers to theirs. Was Vaiie born out of the response to that demand? When I stripped the business back to its core, all the components we had were what every new entrant to the regtech market would want – but struggled to build. We opted for a ‘build’ rather than ‘buy’ approach and used our leverage of who we were and our position in the market to find a partner that would fit us culturally, and which had the solutions we wanted in the ID&V (identity and verification) space, location services and customer onboarding. We partnered with Amygdalab – a fullstack software developer and part of the AliasNet Group, an Italian business leading in digital signature, custom workflow capability and onboarding solutions. We’ve been working together for more than three years, and we are effectively working as one. We bring much of the front-end capabilities, usability, design, sales, marketing and support,
Tell us about your background and where you grew up. I have fond memories of growing up in Jersey – long summers and many hours out on my bike. I attended Victoria College until 16, when I decided to take an advanced business studies qualification rather than the traditional path of A levels. At the time, I had no idea what I wanted to do in my working life, but I was fixed on the idea of going to university, and I felt this was the best route for me to get there. Proving my theory, I got the points I required and set off to study organisational behaviour and HR management at the University of Kent at Canterbury, where I met some amazing people that I am still very close with. I had no idea what my vocation was going to be until I was well into my twenties, but I had always liked the appeal of business and I’ve always been drawn to the communications side of things – marketing has always spoken to me. Creativity has been a consistent theme throughout everything I’ve done.
interview lee Bosio www.blglobal.co.uk
November 2021 - January 2022 21
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Your property may be repossessed if you do not keep up with repayments on your mortgage. To apply, you must be 18+ and resident in Guernsey or Jersey. All mortgages are subject to status and valuation. The maximum amount you can borrow will depend on your individual financial situation, your other circumstances, the property you wish to buy and the type of mortgage you choose. Butterfield Bank (Guernsey) Limited (“BBGL”) is licensed and regulated by the Guernsey Financial Services Commission under The Banking Supervision (Bailiwick of Guernsey) Law, 2020 and The Protection of Investors (Bailiwick of Guernsey) Law, 2020, each as amended from time to time, under registration number 85. BBGL is registered under the Data Protection (Bailiwick of Guernsey) Law 2020, under registration number 11160 and with the Guernsey Registry under registration number 21061. BBGL’s registered office address is P.O. Box 25, Regency Court, Glategny Esplanade, St Peter Port, Guernsey, GY1 3AP. Butterfield Bank (Jersey) Limited (“BBJL”) is regulated by the Jersey Financial Services Commission to conduct deposit- taking business under the Banking Business (Jersey) Law 1991 (as amended), and investment business, fund service business and money service business pursuant to the Financial Services (Jersey) Law 1998, (as amended). BBJL is registered under the Data Protection (Jersey) Law, 2018 and is registered with the Jersey Registrar of Companies for the purpose of the Companies (Jersey) Law 1991 (as amended). Registered office address: St. Paul’s Gate, New Street, St Helier, Jersey JE4 5PU. Company registration number 124784. Terms and Conditions can be obtained from our website and copies of the latest audited accounts are available on request. BBGL and BBJL are wholly-owned subsidiaries of The Bank of N.T. Butterfield & Son Limited.
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Interview Our approach is to look at the industry’s key challenges right at this moment – the efficiency piece, the areas that were easy to do 18 months ago but are now challenging, such as the face-to-face transactions and the levels of proof. In doing that, we’re focused not just on replicating exactly what was there before but looking to create new ways to interact with customers digitally, developing experiences that leave a lasting impression and represent a front window for our customers.
with Amygdalab bringing the back-end capabilities, the full-stack development, security and support, and combined ability to develop customer journeys that are both compliant and intuitive. That is our unique proposition, and together we are stronger. On which areas has Vaiie been focused the most in that period since its inception? Over the past year, we’ve worked a lot with government, which speaks to the level of trust we have from industry. Collectively, Vaiie draws from a team of around 35 people, but we’re within a company of 400. The support that gives us, in terms of IT, marketing, finance and HR, means we can deliver those big pieces of work – such as the work we are doing around government ID.
That work has coincided with a period of great uncertainty and change for organisations. How has the pandemic impacted demand for your solutions? Covid-19 has undoubtedly been an accelerant of change and, in many areas, this change has been a one-way ratchet. That has created new opportunities. We have seen a lot of interest in adopting new ways of working, although firms must get the basics right to act as a foundation for innovation. It also proved that people and technology can work remotely while maintaining their regulatory requirements. After 18 months, this is now the norm, processes are settled and firms are looking at either how to refine them or what more they can do.
What are the big market challenges for Vaiie at the moment? There are multiple challenges faced by our industry: time, cost, a shortage of highly qualified resource, client expectations for high-quality software with strong UI/UX, and the need to keep their data. Thankfully, not all firms in the sector are facing the same challenges at the same time, but what this means is a need to focus on the problems being solved and to solve them together with our clients. The other challenge is some businesses find it difficult to know how to begin when adopting new tools and embracing change, because regtech is still a relatively new approach. That makes our consultative approach very important – staying close to existing clients and learning from recent engagements, understanding perceived challenges, and remaining focused on those everyday inefficiencies that businesses get used to and accept for too long.
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creativity has been a constant theme throughout everything that I’ve done
Another significant area of focus has been in the onboarding space. We have developed a strong proposition that brings together several components, including ID&V, customer workflow, location verification and screening, to help manage the full client onboarding lifecycle. We created an advisory panel – attracting people such as Helen Hatton, who wrote portions of the regulation for Jersey, and Ricky Magalhaes, one of the foremost international security experts – to devise a solution that can have an impact on ensuring the island maintains its reputation of high standards but a low barrier to entry. That has meant drawing from as much information as we can from the regulator, from Jersey Finance and from other bodies to understand and address the challenges faced by the industry.
Given the rise in complexity of regulation and the increased demands around issues such as Know Your Customer and anti-money laundering, do you think clients tend to view your services as an opportunity for growth or a compliance requirement? We see both. We see some customers who, precisely as you said, are focused on remaining compliant and want us to support them in a way that they’re comfortable with, but which is also more efficient and reduces costs. I would challenge every business to continually look for ways to improve the churn and automate mundane and repetitive tasks, so they can focus their time on higher value processes and increase the workforce’s productivity. But we now also see businesses attracted to the value and potential in these tools as a competitive advantage, as a way of attracting a different type of customer – for example, an investment firm looking to attract more tech-savvy customers. They want that onboarding process to feel and look a certain way, and it’s no longer acceptable for that sort of business to offer a slow, clunky process. It doesn’t give a good first impression of that business and what that relationship will be like moving forward.
every business should continually look for ways to improve churn and automate mundane and repetitive tasks
Do you feel the Channel Islands regulators are as helpful as they could be as you navigate your way? Governments and regulators must set the tone for the positive use of technology in the fight against financial crime and use its various controls and measures to be protechnology. They should welcome advanced features to be used to their full potential, yet not be overly restrictive to the point that it blocks innovation. From a practical usage perspective, their tone needs to be unambiguous to allow compliance teams to adopt and embrace new technology with confidence to ensure they gain the benefits. Our financial services regulator, the Jersey Financial Services Commission, is open to industry engagement and willing to talk through any barriers that regulated firms and tech innovators are facing. This open-door policy is working. It’s essential governments also acknowledge this approach when it comes to law-making and supporting innovation. If they don’t, they’re limiting growth in this area. How do you plan to expand the business from here – what’s the strategy? It makes sense to give a little context of the overall group business of which Vaiie is a part. Obviously, in broad terms, letter post is declining and Jersey Post is fast becoming a parcel business. However, to maintain a quality service on the island, we have had to look further. The board supported the decision to create an international logistics business by investing in or acquiring about eight logistics companies around the world. Fast forward four or five years and that now equates to more than 40% of our annual group revenue. So, Jersey Post has a post/parcel pillar, an international logistics pillar, and Vaiie is the third pillar. The first couple of years were about building the foundations – creating the product suite, engaging with business, engaging in industry, growing the team through strategic hires.
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FACT FILE Name: Lee Bosio Role: Managing Director, Vaiie Born: Jersey Studied: Victoria College and Canterbury University Family: Married, three children Home: Jersey Hobbies: “It’s a typical Jersey answer but we spend as much time down at the beach as possible, paddleboarding, getting in the water and having barbecues. That’s how I switch off.”
Having proven our model, the next phase will be all about acquisitive growth over the coming 24-36 months. We will look to diversify outside of the Channel Islands, too. The foundation will always be here in Jersey, but we will look to ramp up those sales channels in Italy, the UK, Malta and Luxembourg. You mentioned the Channel Islands as being the foundation for the business. What is it, in your opinion, that gives the Channel Islands such strength and appeal for yourselves and other regtech businesses? At Vaiie, we work with our clients as partners, and we meet with them face to face to build strong relationships to truly understand their needs and build solutions together. Jersey and Guernsey are the centre of where the client experience takes place, and being able to work with teams at a practical level makes a significant
difference. The islands are strong, and the respective finance centres are long established, so technology firms are not seeking to challenge the incumbents, but partner with them to share skills and expertise and grow together. For me, Jersey must maintain its reputation for the highest standards possible and look for ways to maintain accessibility to the outside world. There’s a balance to be struck between continually keeping that bar at a high level but also looking for innovative ways of improving processes and communication. You were recently crowned Young Director of the Year by the IoD in the Channel Islands. What did that mean to you? Every award is positive and is well received. Having Vaiie recognised at a relatively early stage of our journey is excellent. On a personal level, being nominated by my team is very humbling. Given what we spoke about at the beginning, in terms of my desire to change industries and challenge myself, I guess the award goes some way to recognising my focus on building teams, developing a strategy and executing a vision. But I also see awards as a bit of a marker from which to work. It’s an outstanding achievement – but we are very focused on our growth and want to look back in a year to see how we’ve progressed from this point. We have a team that I am incredibly proud to lead, and I am excited for the next phase of growth we are entering. n
wealth edition PUBLISHING IN February 2022 FOR EDITORIAL QUERIES, CONTACT firstname.lastname@example.org FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK
The death of banks? Technology’s rise, combined with the introduction of Open Banking, has incentivised tech players to enter the banking sector. But does the rise of the flexible fintechs sound the death knell for traditional banks?
Words: Len Williams
HERE’S A THOUGHT to strike fear into the heart of any banking executive. Imagine one of the world’s biggest technology companies creating its own financial services app. This tech behemoth can channel unlimited resources into building its own payment infrastructure – while offering loans, insurance and investment
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products, just like any bank. And, thanks to its size and ubiquity, the company aims to become millions of consumers’ primary provider of financial services. This isn’t a prediction of what Google, Amazon or Apple might one day do. It’s already happened. China’s AliPay, a spinoff from Alibaba’s ecommerce site, is set up and has more than 1.3 billion customers. And they’re not the only consumers shirking traditional banks today. Hundreds of millions of people now rely on fintech – financial technology – apps similar to AliPay for the majority of their needs, and some are even able to live without a traditional bank altogether.
Although AliPay has recently been reined in by China’s regulators, it offers a striking example of how fintech firms are playing traditional banks at their own game. Enabled by internet connections and mobile apps, fintechs are offering consumers easy-to-use apps to do things that were once the exclusive domain of banks. Critically, they’re undercutting banks in areas where the incumbents used to make significant profits. So, will technology spell the death of traditional banks? Over the past decade or so, a plethora of fintech firms have emerged that offer various banking services without necessarily
having banking licences themselves. Electronic money institutions such as Revolut provide debit cards, accounts and swish mobile apps; firms including Wise offer cheap foreign exchange; and Iwoca lends people money. “The fintech industry is a significant challenge to the business-as-usual approach from the traditional banks” says James Watkins, Lecturer at the University of Law Business School in London.
GROWTH OF FINTECH Watkins argues two key factors contributed to the growth of fintech. First was the 2008 financial crisis. This led many people to question if there might be a better model to what high-street banks were offering. Second was a paper by the ‘founder’ of Bitcoin, the mysterious Satoshi Nakamoto. Published in 2008, it was a sort of manifesto for an alternative digital monetary system that would bypass traditional banks’ plumbing. Nakamoto’s idea inspired the launch of cryptocurrencies. Regulation contributed, too. In 2015, the European Parliament updated its payment
services directive to encourage new entrants into the financial services sector. Known as Open Banking, it compelled traditional banks to give licensed start-ups access to customer data. Fintech firms could now benefit from the troves of information that banks had stored up for decades, and offer apps and services built around it. Open Banking means that, as consumers, we can now allow fintech firms to view your transaction history, accounts and other personal data. They, in turn, can then help us do more with our money – from suggesting a credit card with a better rate, to switching money to a savings account where we’d earn more interest. This regulatory change has been transformative and is only set to continue. Nick Maynard, Head of Research at Juniper Research, says: “The value of global payment transactions facilitated by Open Banking will exceed $116bn in 2026, from just under $4bn in 2021.” Of course, fintechs have also benefited from new IT. Rather than being bogged down with ancient mainframes, they can
now use the most modern tech to offer a superior customer experience. Today, fintech firms are muscling into almost every part of the financial services industry. No longer content to offer just FX or mobile banking, they’re providing ISAs, personal pensions, trading tools, insurance, payments infrastructure and practically everything else that banks offer. It’s often said that people’s relationships with their banks last longer than their marriages. In the UK, people use the same current account for around 17 years, on average, while marriages that end in divorce typically last 12 and a half. So, despite all the hype around fintech, the notion that people are suddenly about to abandon banks they’ve been using for decades may be a little far-fetched. As Maynard points out: “The banking relationship is highly important to users
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With open banking, fintechs could benefit from the troves of information banks had stored up for decades
People are more confident depositing their savings with a high-street bank than a jazzily named start-up
and has been very difficult to break, with the UK seeing a very slow rate of account switching… despite many different measures taken to boost competition.” Part of this is inertia. Despite the bells and whistles of fintech, many people lack the knowledge or inclination to make use of these new-fangled technologies. There’s also the sense of security that comes from using a traditional bank or building society. Customers know their money is protected and secure. While shocks like the 2008 crisis dented trust, people are more confident depositing their savings with a well-known highstreet bank than with a jazzily named start-up. The fact that several young
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fintechs, including most recently Germany’s Wirecard, have folded amid allegations of scandal has also diminished the glow around these firms. Of course, many fintechs don’t see themselves as banks and don’t want to be. Many of a bank’s core services, such as lending money, offering mortgages and foreign exchange, are highly regulated and onerous. Few start-ups have the capital or the desire to compete around these core banking services, and perhaps never will. Another reason to doubt that tech will kill banks is that many incumbents have taken note of the arrival of fintech and the competition has pushed them to offer similar services. Gordon Irish, Head of Private Client Acquisition at Investec in Guernsey, says his organisation has a mobile app that does many of the same things as a fintech app. The interface lets customers view their balances in multiple currencies and accounts, as well as more “humdrum” functions, such as filling in application forms, he explains. In fact, most incumbent banks now offer an app of this kind, which looks and feels comparable to offerings from fintechs such as Monzo or Starling.
DIFFERENTIATING POINTS Traditional banks are using IT to differentiate themselves in other ways, too. Oswald Lopes, Head of Operations and Delivery at InfrasoftTech, which helps finance businesses digitally transform, describes various projects the company has worked on in the Channel Islands.
In collaboration with Jersey Finance, for instance, the firm is involved in a trial of ‘virtual humanoids’. When customers couldn’t visit banks in person during the pandemic, they were still able to visit webpages where they’d be welcomed by a digital customer service manager. Lopes also says many banks are using tech to become more efficient. InfrasoftTech helps banks use robotic process automation – a kind of artificial intelligence – to speed up areas such as onboarding new customers. By using these technologies, the services offered by traditional banks will feel competitive with what fintechs are now providing. Finally, there’s the human side to banking, which fintechs will struggle to replicate. Gordon Irish says that for day-to-day tasks, customers of private banks are more than happy to use an app. But “people come to private banks as they can offer a personalised solution to problems”, he says. Rather than leaving people to deal with computer systems alone, relationship banking allows the bank manager to assess the customer’s needs, come up with solutions and solve problems creatively. If fintech isn’t necessarily killing traditional banking operations, it is affecting how they operate. As Maynard concludes: “We will see a continued push by fintechs and new entrants to gain share, but traditional banks will also continue to operate, seeking to improve the user experience to maintain their market position.” n
Profile: David Hudson Following a management buy-out that has seen David Hudson take the reins of Suntera Global and settle the business in Jersey, we take a look at his plans for the future Tell us about your role with Suntera. I have worked for Suntera for 16 years in a variety of roles, primarily business development or client management. I became Group CEO in June 2019, having led a management buy-out of the group. Have you implemented any significant changes since the buy-out? The leadership and senior management team we inherited in June 2019 was very strong, they were the foundation upon which the MBO was built. What was clear at the outset was that to build scale and drive the improvements we wanted in the Suntera Global platform – compliance, corporate governance, HR, technology – there were capability gaps we needed to fill. It’s always our priority to deepen our capabilities and promote from within, and so a number of these gaps were filled internally. As a result, we only needed to bring in a small number of key senior roles to the Group. Consequently, we recruited a new Chief People Officer, Managing Director, Fund Services Division, Head of M&A, Global Head of Compliance, Global Head of IT and a Global Head of Marketing. We also took the decision to transition our corporate headquarters to Jersey, and all but one of these senior people have been sourced from the island. You were granted a licence to provide fund administration services in Jersey in the summer of 2021 – how do you plan to capitalise on that? In tandem with transitioning our own corporate headquarters to Jersey, we’re also building and drawing on Jersey’s strengths as a funds centre to support our own strategic growth. Our focus as a boutique fund administrator, for instance, is to support start-up to mid-size private, listed and authorised funds across a spectrum of sectors, including private equity, real assets, hedge, debt and also the more specialised niche esoteric asset. Jersey is the perfect fit in these areas, with products such as the Jersey Private Fund (JPF). Jersey Finance’s new sustainable finance initiative, Jersey for Good: A Sustainable Future, also strongly aligns with our ESG strategy, and the jurisdiction is already structuring investment vehicles for global managers with environmental, social or governance objectives worth billions of pounds.
How does the Jersey licence fit in with your overall growth plans? Jersey has a well-respected funds sector that offers regimes from retail options through to the more sophisticated and institutional end of the market. The island is also a growing hub for fund managers, servicing fund assets valued at £436bn, a figure that went up 15% in H1 2021. More widely, the island has a reputation globally for being a forward-thinking international finance centre with considerable depth of experience, including in the private client space. It’s a very good fit for us strategically and culturally. We are also, though, growing our continental European proposition and in summer 2021 made moves to acquire two Luxembourg businesses – Reference Financial Services and NeoTrust. These acquisitions are a signal of our intent to significantly grow our European fund and corporate services proposition, broaden our client base and bolster our platform in the EU. The Jersey growth and Luxembourg acquisitions are all part of our overall growth trajectory. ESG has moved front and centre over recent months – how has the firm responded to that? A commitment to high environmental, social and governance (ESG) standards sits at the heart of our culture, and it always has done. Suntera Global is built on a strong foundation of business governance, ethics and responsible practices and our motto is ‘empowering responsible ambition’. Ultimately, governance and responsibility are ‘what we do’ as an administrator. It’s an intrinsic part of our role to be accountable for our actions but also to channel stewardship around managing that responsibility. Arguably, the emphasis in the rapidly evolving ESG space to date has been on the ‘E’, but increasingly we are seeing recognition among clients that the ‘G’– which underpins stewardship, responsible behaviour and integrity – is absolutely critical. For our own part, we support global causes such as climate change by limiting pollution and waste within our local environment. Our processes and policies achieve these goals through recycling, limiting paper use and employing digital solutions to reduce our carbon footprint.
You now have more than 320 staff in eight locations around the world – how do you engage and support them? Our absolute focus is on creating an inclusive and collaborative environment, built on transparency and communication, empowering our staff to achieve their goals. Given the jurisdictionally agnostic services we offer clients through our divisional management structure, all our offices are of the same strategic importance. Although my base is Jersey, I make regular visits to all our offices to meet our staff, build cultural alignment and ensure the consistent communication of our goals and aspirations. During the pandemic I was keen to reach out to staff digitally across our locations on a regular basis. How important is digitisation in supporting high-quality client service? It’s vitally important. As client needs become more global, the capability to deliver governance frameworks that embrace digital technologies becomes more critical. The role of the regulator in facilitating digital compliance and governance is largely going to dictate the pace of change across global markets, but at a business level we are absolutely focused on remaining at the forefront of digital skills and innovation. n
To find out more about Suntera’s journey, visit suntera.com
November 2021 - January 2022 29
Reimagining your approach to compliance and risk management Aspida is helping businesses revolutionise the way they handle their compliance and risk management – combining innovative tech solutions with a trainee programme that is helping to deliver the experts of tomorrow
30 November 2021 - January 2022
THE EVOLUTION OF GOVERNANCE, RISK AND COMPLIANCE Compliance is necessary, so why make it complicated? Resolver by Aspida is cutting edge governance, risk and compliance (GRC) software that helps you to easily organise, manage and keep up with regulatory requirements for efficient and comprehensive compliance. It enables in-depth and ongoing testing with the peace of mind that it incorporates all of the latest in Guernsey regulations and industry best practice to provide assurance to the board on the design and operating effectiveness of its internal controls, policies and procedures. With real-time testing, Resolver by Aspida provides more transparent information on the monitoring being undertaken on your behalf. It allows you
to easily engage with the first line to ensure that they can conduct the necessary risk assessments, manage risks and remediate regulatory gaps. Automate process, reduce risks, decrease compliance fatigue – Resolver by Aspida is both evolution and solution when it comes to the key GRC challenges businesses face. Included within the platform is our incident management functionality, an endto-end solution that helps you to manage the entire incident lifecycle by driving the insight you need to efficiently reduce incidents and the impacts they have on your organisation. Furthermore, our risk management tool enables better remote risk management by improving engagement with the front line with a guided single-page risk assessment, a simple task list and easy reporting. IT compliance and risk (cyber security), internal audit and internal controls management (for third line support), vendor risk management (for outsourcing risk) and integrated ESG solution modules are to follow. The key benefits include: ● Prioritising your highest risk regulations ● Gaining organisation-wide compliance oversight ● Reducing compliance fatigue on the business ● Proving compliance to regulators.
CYBER SECURITY AND RESILIENCY The pandemic has accelerated businesses’ move to digital business models, often moving vast volumes of ‘big data’ to the cloud and embracing hybrid working models in order to operate more efficiently and competitively. The speed of digital transformation has opened up many businesses to new cyber security risks due to the complexity of technology that has been implemented and a lack of knowledge and awareness, particularly where reliance is placed on cloud services providers (CSPs). As part of your business digital transformation, you will likely have moved to a cloud environment, adopting various cloud services – such as internet as a service (IaaS), platform as a services (PaaS), software as a service (SaaS) and desktop as a service (DaaS) – often through the use of a CSP, which may provide additional levels of IT managed services. Such appointments can assist greatly in improving business efficiency and reduce the expenditure required for s business’s own software and hardware resources. Moving to a digital business model and embracing cloud technology can bring many benefits, but boards must ensure they understand the implications of digital technology, the risks of appointing CSPs and the reliance placed on them.
The speed of digital transformation has opened up many businesses to new cyber security risks
The cyber security risks relating to cloud environments and the governance, and risk management required, will ensure that the business has a clear and effective cyber posture that identifies, understands, prioritises, communicates, trains and mitigates cyber security risks. In developing your business digital strategy, you must carefully consider new and emerging threats and risks that are relevant to your business and its related technologies. Creating and developing a secure digital environment is not only about tactical and short-term technical solutions, but also about ensuring that your key risks are identified and sufficiently mitigated and that you can demonstrate your material assets are adequately protected.
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AT ASPIDA, WE take an integrated approach to risk management, using our evolutionary multi-jurisdictional platform, Resolver by Aspida, to manage compliance and regulatory risks, cyber, ESG, risk management, vendor risk and wider support for organisation-wide internal audit. Our tech is great, but the value add comes from the dynamic partnerships between our people and tech. We are proud to have a diverse team of seasoned professionals in cyber, compliance and risk, corporate governance, internal audit, environmental and social responsibility and technology development. With an eye on the future, we are proud, too, of our trainee development programme, now in its third year. This ensures our future consultants are pursuing their professional qualifications, along with practical experience and the development of cutting edge technology. Together, an unbeatable team! In developing Resolver by Aspida, we have been keen to ensure that it sits in the centre of managing that wide range of risks that a business faces today – adding value to your business, not hindering its development. Regtech, or the use of technology to improve regulatory governance, often misses a vital ingredient however – people. At Aspida, we know that our people, and the staff of our clients, are pivotal to what we do and are integral to our reputation, and so the focus of our digitisation has been on reducing mundane tasks, improving efficiency and effectiveness to allow more time for value-added contributions from our people. We started this journey three years ago, when we launched the first compliance trainee scheme, ensuring our risk professionals have the right mix of technical as well as professional skills.
Advertising feature We are able to assist your business in developing and implementing your cyber security programme in line with your strategic objectives and risk appetite. Through our software, we can efficiently map and report on compliance with the NIST cyber security framework and the Guernsey Financial Services Commission’s Cyber Security Rules and Guidance, 2021. Our Head of Operations and Cyber Security, Sarah Sarre, is well known to our clients for helping them develop effective policies, procedures and controls to meet their regulatory obligations. Some might not be aware that Sarah is a qualified cyber security practitioner as well as a certified blockchain expert. Sarah and her team are therefore uniquely placed to help you navigate your existing regulatory challenges and embrace and embed the new.
As a leading provider of advisory services, we recognise the growing demand for quality professionals in a constantly developing and increasingly high-profile field. Our aim is to deliver a training programme that becomes renowned for the excellence of its ‘graduates’.
MEET THE TRAINEES: BLAINÉ AND XAN Blainé and Xan are in their third and second years of the trainee programme respectively, and offer valuable insights into the changing landscape of technology in the workplace, as well as their involvement in the development of Resolver by Aspida. Blainé McDaid, a Compliance Senior Associate in her third year on the programme, joined Aspida as a trainee in our first launch of the Aspida Advisory Trainee Programme.
ASPIDA ADVISORY TRAINEE PROGRAMME At Aspida, we are especially proud of our commitment to the personal support and professional development of our staff. Our Advisory Services Trainee Programme has been introduced to find our next generation of consultants and could lead to a career in compliance, cyber security, risk and assurance, governance, IT or ESG. The talented, personable and enthusiastic individuals entering our programme are offered top-quality training, as well as access to some of the leading local professionals, providing a breadth of learning and development opportunities that are not typically available within the finance world.
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Our advisory Trainee Programme has been introduced to find our next generation of consultants
“I found this programme to be a wonderful opportunity for people to enter into the finance industry and gain experience, whether you have a background in finance or not. I’ve been able to gain a wealth of knowledge from my team, which I am now able to pass on to the new trainees as they enter the programme,” she says. “For someone with a not very ‘tech savvy’ background, I have found that using different systems and forms of technology has been made very easy with the support of my team and with the on-the-job training provided to me.” Our trainees have been an instrumental asset to us while developing Resolver by Aspida. They now have an in-depth knowledge of the system. “We have been lucky to have been involved with the Resolver Project for the first stages of testing, allowing us to explore the system and give feedback before Resolver was launched as a final product,” adds Blainé. “I believe this has also given us an advantageous insight of the system.” Technology is a growing element of almost every business activity today, and we realise the need to remain up to date, with the latest methods and systems in place. For advisory services, digitalisation can improve how effectively we work and reduce the component of human error. However, it is important also that the aim is not to remove the human element but rather to find the right balance for processes. Blainé cites the many opportunities that have arisen in the past year. “What has
been great is the expansion of the trainee programme, the launch of Resolver – which has changed how we look and preform CMP testing completely – and the opportunities open to the trainees. This has allowed us to choose our main area of experience based on what we enjoy and are interested in – be it cyber security, corporate governance, compliance and risk or any other areas.” Xan Walker, a Compliance Associate in his second year of training, says: “As the world of regulation evolves around us, technology will have to keep up, and being at the forefront of those changes is an interesting position to be in. It makes daily life at Aspida very enjoyable. “I have been involved in writing some of the design and operating tests, as well as publishing news items, regulatory updates and CMP testing. “During my time so far on the trainee programme, I have noticed how quickly technology has progressed and am excited to be part of a team that appears to be one of the more technologically innovative in Guernsey.” Xan continues: “This has enabled the smaller, more monotonous tasks to be almost fully automated, which gives greater scope for more complex work and projects. That makes it an exciting time to be at Aspida Group.” n
Don’t just take our word for it… “Having monitored the governance, risk and compliance technology landscape for a number of years, we believe Resolver by Aspida harnesses Gartner-recognised governance, risk and compliance technology with the risk and compliance expertise of Aspida’s advisory specialists, resulting in a compelling solution for Guernsey regulated entities.” Jonathan Guillemet, Managing Director, East Harbour Associates “We set a key strategic objective for 2021 to prioritise a technology-enabled model and a data-driven approach to compliance in order to improve efficiency and add more value. We believe that doing so will enable and empower compliance functions to take a more active role in shaping and executing our strategy, as well as reducing cost in the longer term. Resolver by Aspida provided a comprehensive and compelling solution.” Sara Bourne, Deputy Managing Director, Carey’s Commercial
As a business, your risks don’t exist in silos, so don’t manage them that way. At Aspida, we are proud to be able to offer our clients innovative and integrated solutions to managing all those risks, as a result of our longterm investment in technology and people – an unbeatable combination. We are looking for our next intake of trainees to start their career with us in September 2022. Find out more about what the programme offers by visiting our website: www.aspidagroup.com/advisory-trainee-programme
Aspida Joint Chair Peter Mills
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The top cyber risks facing your business Last year was the busiest on record for corporate cyber attacks – as fraudsters took advantage of gaps in companies’ networks and the rapid introduction of new processes. So what are the biggest cyber risks facing your organisation – and how can you prevent them? Words: Sophie McCarthy
34 November 2021 - January 2022
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pandemic exposed more areas of potential attack and, with remote and flexible working here to stay, it is vital that any vulnerabilities opened to accommodate home working are closed.”
COMMON TRENDS AND ATTACKS 1. Ransomware Ransomware is a form of malware, a catchall term for any type of malicious software – and the fact the name contains the word ‘ransom’ tells you pretty much all you need to know. It is a form of software that will lock you out of your systems or data until a payment has been made. “The banking sector has seen a 1,380% year-on-year increase in ransomware attacks just in the first half of 2021,” says Paul Acton, Chief Executive of Sure in Jersey. “And it’s not just an increasing challenge – these attacks are growing in complexity, too.” 2. Extortionware Extortionware isn’t dissimilar from ransomware. In both cases, company data is accessed and infiltrated, usually
“CYBER CRIME IS THE greatest threat to every company in the world.”1 That was the damning verdict of former IBM Chairman, President and CEO Ginni Rometty in 2015. And that was a long time before the threats and disruption we have seen in recent years. The world Rometty was referring to was a pre-Covid one. And, in the midst of the pandemic, 2020 was a recordbreaking year in terms of cyber attacks on businesses, governments and individuals, according to Forbes2. The statistics are startling: organisations faced a 20% rise in security threats last year versus 20193. In 2020 alone, businesses in the UK faced an average of 686,961 attempts to violate their systems online, equating to an attempted attack every 46 seconds. Four in 10 businesses, and a quarter of charities, have reported having cyber security breaches or attacks over the past 12 months3. According to Estelle Spiers, Group Head of Operations at Zedra, these shifts can largely be attributed to the speed at which companies had to move to work-fromhome strategies. “This will have inevitably meant some companies had to take risks to ensure they could still operate,” she says. “The
www.bizjournals.com/bizjournals/how-to/technology/2021/02/your-business-cybersecurity-needs-both-advanced.html www.forbes.com/sites/chuckbrooks/2021/03/02/alarming-cybersecurity-stats-------what-you-need-to-know-for-2021/?sh=4c9ffed658d3 www.itpro.co.uk/security/cyber-attacks/358276/2020-the-busiest-year-on-record-for-cyber-attacks-against-uk-firms
November 2021 - January 2022 35
Cyber crime with the ultimate goal of making money. With ransomware, businesses must either pay up or lose access to the stolen data. The difference is that extortionists will often also threaten to publicly release the collected data, putting added pressure on organisations to comply. 3. Denial of service Denial of service, or DoS, attacks are designed to render services inaccessible to legitimate users by overwhelming them with traffic and therefore taking them offline. HSBC suffered one back in 2016, which saw millions of customers unable to log into their accounts for several hours. In a distributed denial of service (DDoS) attack, the incoming traffic flooding the victim originates from many different sources, making it effectively impossible to stop the attack by blocking a single source. According to a report by cyber security and network diagnostics firm NetScout, there were 5.4 million of these attacks in the first half of 2021 alone, an 11% increase on the same period last year4. 4. Phishing, smishing, vishing and whaling These dark arts, all forms of social engineering, are carried out over the phone (vishing), email (phishing) or via text (smishing) to trick you into either providing sensitive information – such as passwords, bank or credit card details – or downloading malicious software. Spear phishing is the most common form of these in corporations. This is where the attack is targeted and personalised in an attempt to steal account credentials or financial information from specific individuals (in the case of CEOs, this is known as whaling). An employee, for example, could be fraudulently emailed by what they think is one of their colleagues or even their boss – close examination would unearth a nuanced difference in their email address – asking them to transfer money or make a payment. 5. Data leaks A data leak is where sensitive information is accidentally exposed, so that cyber criminals can gain unauthorised access without effort. There has been no shortage of these in the press in recent years, with Facebook, LinkedIn, BA, Hilton and Marriott all falling foul. Data leaks are different to the other cyber risks listed above, as they don’t feature an attack per se. Instead, they stem from poor data security practices or accidental action or inaction by an individual.
HOW TO PREVENT ATTACKS “People remain the weakest links of companies,” says Spiers. “Although direct attacks, denial of service and ransomware 4
With flexible working here to stay, it is vital any vulnerabilities opened to accommodate homeworking are closed
attacks remain some of the biggest threats, there has been an increase in the targeting of individual employees. “One unfocused moment, one careless click of a malicious link or a weak password can have severe consequences.” “The more training employees have, the greater their understanding,” says James Kelsh, Head of Information Security at Resolution IT. “The greater their understanding, the more involved they’ll be in the anti-cyber crime drive.” Kelsh emphasises the need for tight work-from-home policies, as well as mobile device management and careful consideration when it comes to the cloud. “Always make sure that when you’re moving infrastructure to the cloud, you’re putting in place the same security controls you would if you were storing data elsewhere. Don’t assume it’s safe.” Spiers also stresses the need for simulated attacks in order to understand potential weaknesses. “Internal IT teams can be too close to the systems to see what the risks might be. But third parties can take on the role of rooms full of cyber criminals and will use the same kind of tactics and software to expose weaknesses. “It is also important to talk about potential attacks, near misses and even actual attacks. We have seen an increasing openness about this in the media. At first, companies that were unfortunate enough to be targeted by criminal activity tried to keep it quiet for reputational reasons, but we've recently seen high-profile attacks talked about more openly. Sharing experiences and learning from each other is of the upmost importance. Yes, security tools do a good job of stopping threats before they get to individuals, but this
can lead to a false sense of security and complacency.” Nichole Culverwell, Director at Black Vanilla, agrees. “If you have a cyber breach or a cyber security issue happens, you’re going to want to be honest and try and help those affected,” she says. “And these discussions around how you are going to behave should happen in the planning stages. You want to be having these conversations at board level or with your exec team. Agreeing what you will do ahead of time will mean that if something does happen, you can simply focus on the job of managing the crisis. “We’ve seen how damaging these attacks can be and often it’s just because they’re behind the curve on communicating. “When a cyber breach happens, it’s all hands on deck,” Culverwell continues. “Things are taking place at great speed and people within the organisation are trying to deal with the problem itself. They’re running themselves ragged trying to see how far the breach has gone. These sorts of environments are incredibly stressful, and in situations like that we don’t always do everything brilliantly.” However, much can be done in advance to prepare, she says. “Draft statements. You’ll tweak them, of course, but it’s great to have thoughts on paper ahead of time, and think about the channels you would want to use. Is your organisation based across many countries, meaning you have to think about cultural differences in your communication style? Are you dealing with different regulations and laws in those different jurisdictions? You’ll need a spokesperson – who will that be and are they already media trained? “There’s a lot to think about, but this planning will be much easier if you’re doing it at a time of peace. That’s how I think of it – you’ve got peace time and time when you’re effectively at war. And when you’re fighting a crisis, you will have wanted to have done your difficult thinking and have had the difficult discussions when your backs aren’t up against the wall.” n
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2022 2021 Funds edition PUBLISHING IN august 2022 FOR EDITORIAL QUERIES, CONTACT email@example.com FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK
protecting the intergenerational transfer of wealth Carey Olsen Senior Associate Lauren Glynn and Associate Victoria Cure on navigating and safeguarding against the financial risk of divorce
38 November 2021 - January 2022
IN 2011, 40% of Jersey’s population were married, 8%
were remarried and 10% of the population were divorced. While we eagerly await the results of the recent 2021 census, we expect the results to continue to show that a notable and significant proportion of the population have married and later divorced.1 Divorce is a financially significant event. Marriage creates duties between spouses, and the court has a wide discretion to make a range of financial orders on divorce, including in respect of the transfer of capital/property and/or the payment of maintenance. The court is guided by the overriding principle of fairness and is tasked with the role of ensuring that, where possible, at a minimum, both parties are able to meet their needs. Very few people enter a marriage contemplating that they may one day divorce, but given the above-noted statistics and the potential seismic impact of divorce on parties’ finances, safeguarding against the impact of future divorce is a sensible part of financial planning.
These considerations are, in our experience, often overlooked. The potential safeguards, including the use of trust structures and pre-nuptial agreements (discussed below), are often put to the bottom of parties’ to-do lists. After all, we lead busy lives and are, in the good times, commonly minded to focus on working hard to create and generate wealth and less interested in how to protect the wealth generated from the claims of a future spouse. While safeguards against the financial risk of divorce are not directly relevant to growing wealth, they can play an important role in protecting and preserving wealth. Of course, every individual and every family is different and will have different concerns – and the extent to which an individual or family will want to protect against the risk of divorce varies. Some people, often due to past experience of divorce in their family, take the risk very seriously. One of the common situations that crosses our desks is that of a wealthy UHNW or HNW family in which the wealth-creating parental generation would like to transfer wealth down to their children – commonly as part of wider succession planning goals – but is concerned to ensure that the wealth they have worked so hard to generate is not eroded. That erosion can take the form of the later divorce of one of their children, or via costly litigation in respect of financial claims brought by a son or daughter-in-law on divorce. It is prudent to note at the outset that gifts and advancements of inheritance by parents are generally treated by the family court as a different type of asset when compared with the ‘pot’ built up by the parties during their marriage. However, this does not put such assets outside the family court’s discretionary exercise and it is sensible to proactively protect, as far as possible, such assets from a future spouse’s potential claims.
USE OF TRUST STRUCTURES Discretionary trusts are regularly used for a wide variety of financial and succession planning purposes, but they are also a potentially useful means to protect wealth on divorce. The treatment of discretionary trusts when resolving parties’ finances on divorce is one of the most complex areas of matrimonial law. The treatment of a trust in which one of the spouses is a beneficiary will very much depend on the relevant facts of the case. Beneficiaries to a discretionary trust have no automatic entitlement to trust
assets or income. Therefore, while such trust interests must be disclosed when resolving finances on divorce, the starting point is that the assets contained in the discretionary trust are beyond the beneficiary’s control. However, depending on the circumstances of the case, there are two main ways in which such trust interests can be taken into account on divorce: as a financial resource and as a nuptial settlement, in which case the court has various powers in respect of the trust. It is noted that the concept of a nuptial settlement is considerably narrower in Jersey than in England and Wales. It is important, given the statistical chance of divorce within the beneficial class, that trustees, beneficiaries and their advisers are alive to the risks of divorce and seek specialist legal advice where appropriate.
PRE-NUPTIAL AGREEMENTS Pre-nuptial agreements are not automatically binding on a court, as parties to an agreement cannot fetter the discretion of the court to consider the parties’ finances and appropriate settlement on divorce. However, since the seminal case of Radmacher in England and Wales2, and the resulting case law in this jurisdiction, parties to a pre-nuptial agreement should be prepared to be held to the terms of the agreement they have reached and, indeed, save for a vitiating factor such as nondisclosure, should expect to be. The court in Radmacher noted at paragraph 75: “The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.” A pre-nuptial agreement will not be upheld if it does not provide for a spouse’s needs and those of any minor children, as it will not be considered to be fair. The job of a specialist family lawyer is therefore to pre-empt how the family court is likely to consider your circumstances and draft your pre-nuptial agreement to meet your spouse’s needs, while protecting your wealth. In our experience, carefully considered and properly drafted pre-nuptial agreements are likely to have a decisive impact on the outcome of a case and be upheld by the court. They therefore have the potential to be a useful tool in a party’s wealth protection strategy and are not only a consideration for the very wealthy, but are useful in a range of circumstances.
Safeguarding against the impact of future divorce is a sensible part of financial planning
People often ask if pre-nuptial agreements are worth the paper they are written on. The answer is yes, but it is important to take early legal advice. We can tell you in an initial call if a pre-nuptial agreement is likely to be beneficial in your circumstances. Given the highly discretionary nature of the family court and its reputation for looking behind structures where it is considered just and fair to do so, no wealth protection strategy can be entirely bulletproof. The strength of wealth protection strategies tends, therefore, to come from their number and from adopting a layered approach. Pre-nuptial agreements are not only highly valuable wealth protection tools in their own right, acting in a matter akin to an insurance policy, but can also work in conjunction with trust structures to provide an additional layer of wealth protection. Indeed, trust instruments commonly provide that beneficiaries must have a pre-nuptial agreement in place in order to benefit from the trust. We consider it essential that an effective wealth protection strategy should include obtaining early and specialist family law advice to proactively manage the risk of (future) divorce. The strategy should consider the protective steps that can be taken in the good times to potentially save money in the long run and avoid or minimise expensive future litigation. n 1 https://www.gov.je/SiteCollectionDocuments/ Government%20and%20administration/R%20 Chapter2PopulationCharacteristics%20 20120808%20SU.pdf 2 Radmacher (formerly Granatino) v Granatino  UKSC 42
Lauren Glynn and Victoria Cure are specialists in family law and members of Carey Olsen’s Jersey dispute resolution and litigation team.
November 2021 - January 2022 39
The march of M&A Fund administration is one of the biggest tech-powered elements of the financial sector, But a host of M&A activity is driving huge consolidation in the market – including headline-making purchases from private equity firms. So what does it all mean for the future of funds?
Words: Gill Wadsworth
40 November 2021 - January 2022
THIS SUMMER, PRIVATE equity behemoth Apex Group paid £1.51bn for fund administrator Sanne – ending a bidding war that resulted in investors receiving 920 pence per share. That marked a significant increase on initial offers from Apex’s rival Cinven, which after five rejected attempts had tried to tempt Sanne’s management with an offer of 875 pence per share. That Apex was successful with its bumper bid is indicative of the ferocious competition for Channel Islands fund administration businesses, particularly those that run the back offices for alternative investment funds including private equity and hedge funds. Nicholas Hyett, Equity Research Lead at Hargreaves Lansdown, explains: “It
helps that the cost to bring Sanne in to detangle regulatory red tape is just a drop in the ocean for most of these funds, and getting it right is far more important than cutting corners. “The group has competitors in some of its individual markets, but there aren’t many firms doing what Sanne is doing on a global scale. All that gives Sanne some pricing power.” Hyett adds: “Alternative investment funds are having a moment in the sun amid a low-interest-rate environment, as investors seek out potential higher returns. “On top of that, global trading complexity is increasing as challenges such as Brexit add to the regulatory headache that fund managers must deal with. Sanne has had no shortage of potential customers
to draw from and once a fund has been established, it’s all but impossible to switch administrators, so revenue is very sticky.”
PURCHASING POWER Sanne itself has been busy snapping up rival administrators, notably buying out the fund administration division of PraxisIFM in July this year – which added more than £25bn of assets under administration and 80 employees based in Guernsey, Jersey, London, Luxembourg and Malta. The PraxisIFM acquisition followed Sanne’s earlier takeover of Scandinavian fund services provider Private Equity Administrators, as well as Dallas-based STRAIT, which provides fund solutions for alternative investment firms.
There is still huge scope for private equity firms to continue their assault on the fund administration sector. According to data from S&P Global Market Intelligence and Preqin, 25 private equity firms across the world hold $509.81bn in dry powder, marking 22.3% of the record $2.286trn in total global dry powder. Jonathan Smith, Founding Member and Partner at Wyvern Partners, says it is likely that private equity firms will put at least some of that money to work in the funds administration sector. “Private equity loves the fund administration sector, and no private equity investor has ever lost money in it. Fund administration is a lovely sector for investors; it is cash generative with good margins and it is gently growing,” he says.
November 2021 - January 2022 41
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Some private equity firms have made real messes of their investments
The latest Monterey Jersey and Guernsey fund report shows that funds under administration continued to grow strongly during the 12 months to June 2020, increasing by 3.2% to $922bn despite the market disruption caused by Covid-19. Aztec Group retained top spot as the largest fund administration business on the islands, with $237.6bn in assets under administration after seeing growth of 9% for the year to June 2020. Matt Horton, Group Head of Private Equity at Aztec, says there are clear reasons for this exponential growth. “The market growth in Jersey and Guernsey reflects their position as centres of excellence for private equity and alternative funds, reinforced by political and fiscal stability, the professionalism of their service providers and the quality of the regulatory bodies. “This year’s report reinforces the significance of the fund industry to the Channel Islands’ financial services sector,” Horton says.
RIVAL JURISDICTIONS However, the Channel Islands has competition from other tax-neutral jurisdictions when it comes to attracting private equity investments. Ivo Hemelraad, CEO at financial services company Zedra, says his business already has a significant footprint on the islands and, while he is keeping his options open, it is expanding regions. “We have been active in the fund services sector; we acquired a business in the Cayman Islands as well as one in Luxembourg. We continue to look at opportunities in the Channel Islands, but we already have a presence in Jersey and Guernsey and would only continue to
expand here when we can see there is the chance for additional growth,” he says. While some businesses on the islands have welcomed private equity investments with open arms, Smith says there remains notable opposition from certain quarters. He explains that reluctance to do business with private equity providers stems from “horror stories” of rapid shortterm expansion at the cost of long-term value creation. “Some [private equity firms] have made real messes of their investments,” he says. “There are good and bad private equity practices. Some of them buy lots of businesses, but they fail to integrate them and instead just believe that gaining size is all that matters.” Smith says bad practices include increasing fees without improving service levels. “If you put up prices and the quality of service goes down, then the clients are unhappy and the intermediaries who recommended the clients went to that trust are also unhappy – and everything is blamed on the private equity owners for forcing through change in the sector.” However, as Smith notes, the private equity sector is “quick to learn” and more recent transactions have been driven by better practices. These include Vistra, which in September completed an acquisition of Newhaven, an independent provider of corporate, fiduciary and business support services to corporates, professional services firms and private clients. Smith says: “Vistra has grown into a multibillion-dollar business. It invested in people, and it knows that you do not run a successful business off a spreadsheet. “It takes long-term decisions and a realisation that while you can get short-
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Five largest private equity firms globally by dry powder ($m)
JIC Capital Co
CVC Capital Partners
KKR & Co
Source: S&P Capital IQ Pro, Preqin, as at 18 August 2021
Fund administration is a lovely sector for investors; it is cash generative with good margins and is gently growing
44 November 2021 - January 2022
term growth by putting up the fees, you won’t generate any new business.” In the case of the Newhaven takeover, Vistra will retain Chief Executive Reuben Anstock and his management team in senior roles and bring the company under the Vistra brand. Smith says: “One of the mistakes that bad private equity firms made was failing to see that strong management is key. Contrarily, Vistra is an example that you can almost start from anywhere if you have a strong management team.” Another example of the importance of keeping the incumbent top brass in situ when taking over a business comes from Ocorian’s private equity-backed acquisition of Guernsey-based Trust Corporation International, which completed in August. Frederik van Tuyll, Chairman and CEO at Ocorian, says the combined forces of the two management teams results in a more “powerful” business. “Our combined capabilities and expertise will result in a powerful full-service offering in Guernsey from our team of more than 160 professionals,” he says. “We are a very considered acquirer, and this acquisition is a strategic investment
in Guernsey alongside our core and complementary service lines.” Ocorian’s “considered acquirer” status is another important factor in takeover success. Smith says the “buy anything” model is discredited and acquisitions have become more strategic.
BUYING IN TEAMS He also notes the importance of ensuring the incoming team from the acquired company keep some skin in the game. “Successful acquirers will spread the equity ownership widely among the employees. They buy partly for cash, with the rest in shares, so that the people selling become part of the bigger group,” he says. Consolidation in financial services across the Channel Islands shows no sign of slowing and, as the challenges of the Covid-19 pandemic become more manageable, the rate of mergers and acquisitions may increase. While the involvement of private equity firms may have once been viewed with suspicion, these financial backers will prove critical to success. Given the amount of dry powder, the appetite from this sector will be evident for some time to come. n
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Breaking down the cyber security threat to your business Paul Acton, Chief Business Officer at Sure Group, outlines the steps you can take to protect your business from cyber attack
YOU’LL HAVE PROBABLY experienced at first hand the way that technology has evolved over the past two years. Rare occurrences such as full-team video calls quickly became the norm and, as we thankfully return to our Channel Islands offices, these approaches look like they’re here to stay. But while that advance has been under way, so too has the darker side of technology: cyber crime. To take just one criminal tactic in one industry, Accenture reports cyber attacks on banks in 2020 and beyond will result in them losing $347bn, that insurers will lose $305bn and capital markets will lose $47bn by 2024.1 But it’s not just the banking sector that’s being affected. Mimecast notes that more than six in 10 companies suffered a ransomware attack last year.2 So, with cyber security threats so prevalent, what steps should you take to protect your organisation?
THREE KEY CONSIDERATIONS Managing your organisation’s cyber security can be broken down into three overlapping components, as advised by the National Cyber Security Centre (NCSC). The first is to get the information you need to make well-informed decisions. This involves assessing what material you keep digitally (these days, that’s probably rather a lot), where this property is stored, and 1 2 3
what your organisation’s vulnerabilities are. The second step is to prioritise your risks. You need to integrate cyber security into your boardroom discussions and processes and embed it in your organisation’s culture. This is absolutely a board-level concern, as the average cost of suffering a cyber attack – whether ransomware, a data breach, a hack or any other attack – has been estimated to be £2.9m per incident.3 Third, you need to take steps to manage your risks. You’ve likely got some sort of disaster recovery plan in place, but when did you last stress test it? Are your systems as up to date as they could be? Have you recently done something different with your data, technology or hardware that needs protecting? All these questions need to be asked in order to successfully mitigate your risks.
RISKS TO BE AWARE OF Three components may come across as straightforward and manageable, but clearly there’s a lot to consider for each element of your cyber security, especially when the risks are so varied. We like to break down the risks your business is facing into four categories, which could represent a helpful way to gather information and prioritise and manage risks: 1. Human capital – This relates to how your people are prepared to identify, manage and respond to cyber incidents.
Does your organisation have a chief information security officer? Are your staff trained to recognise threats? Are you prioritising cyber security at a senior level? 2. Infrastructure – What equipment and technology do you use and is it adequately protected? Is your cloud storage suitably secure? Are your firewalls up to scratch? 3. Data loss – Your data is no doubt incredibly valuable to your business, so it makes sense that a criminal would want to access it. Is your data secure? 4. Cyber – These are the active threats to your organisation. We’ve mentioned ransomware, but there’s also phishing, botnets, DDoS attacks and hacking. By considering your cyber security along these lines, you can begin to understand how you might be targeted and what you need to do about it. At Sure, we offer a comprehensive suite of security solutions to help you tackle these threats. We are offshore cyber security experts and a trusted provider for businesses across the Channel Islands and beyond. Cyber security is a serious boardroom concern, but it doesn’t have to be a terrifying proposition. By breaking down the threats, you can find a solution that works for you and protects your business. n
https://www.accenture.com/us-en/insights/financial-services/cost-cybercrime-study-financial-services https://www.mimecast.com/state-of-email-security/ https://www.itgovernance.co.uk/blog/the-cost-of-a-cyber-attack
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Welcome to the New Kroll N E W N A M E . S A M E T E A M . S A M E T RU S T E D PA R T N E R .
Duff & Phelps acquired Kroll in 2018 and began transitioning our firm to the Kroll brand in 2021. We begin this new chapter with a fresh look and a clear and confident vision for the future, helping clients to cut through complexity and providing clarity in all areas of business. Kroll is the world’s premier provider of services and digital products related to valuation, governance, risk and transparency. We specialise in the areas of valuation, expert services, investigations, cyber risk, corporate finance, security, restructuring, legal and business solutions, data analytics, due diligence and regulatory compliance. Our firm has nearly 5,000 professionals in 30 countries and territories around the world.
Learn more at www.kroll.com CONTACT Malin Nilsson Managing Director firstname.lastname@example.org T +44 (0)1534 603130
Ed Shorrock Director email@example.com T +44 (0)1534 603134
Sarah Bentley Senior Vice President firstname.lastname@example.org T +44 (0)1534 603135
Manu Hinojosa Senior Vice President email@example.com T +44 (0) 1534 603132
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Internal to external
Ed Shorrock, Director, Regulatory Consulting, at Kroll, discusses a change in approach to managing bribery and corruption risk JOHN LE CARRE once wrote: “There’s only one thing worse than change and that’s the status quo.” Just because a business has seen success with internal audits and enterprise-wide risk assessments doesn’t mean it should consider its risk management strategy a job well done. While internal departmental structures and processes may experience slow, tectonic-like shifts, the external environment, not least in financial services, is far more turbulent. In the Channel Islands, such an environment keeps the pressure on the finance industry to remain vigilant. In respect of the threat from bribery and corruption, it is frequently clients of financial services businesses who are exposed to such risks. On the other hand, those running structures might themselves be exposed to, or even facilitate, bribery and corruption. Connecting the dots between internal controls and external scrutiny is crucial. Because they move at different speeds, their integration has to be well nurtured and properly cultivated. Kroll’s research in the Global Fraud and Risk Report 2021 suggests that nearly half (46%) of all organisations surveyed put lack of visibility over third parties as their number one vulnerability when it comes to managing bribery and corruption risk. With the best will in the world, this cannot be fixed by continually looking inward. These days, businesses need to see the wood and the trees; in other words, they need to have a tight grasp of their internal data as well as the ability to zoom out to the external environment.
UNFORTUNATE COVID-19 CATALYST The pandemic is continually mentioned alongside the word ‘unprecedented’, but few words better describe its impact on businesses and the global economy. As demand for digital goods and services skyrocketed, the opportunities for bad actors to peddle their unethical practices also boomed. The OECD even put out an official warning in 2020 about the escalating risks of bribery and corruption specifically related to the pandemic. Dramatic shifts in supply chains (the effects of which we are currently feeling), digital migration and customs controls were all highlighted as potential avenues of exploitation. Thanks to cloud transformation and digitalisation, supply chains are now
more like entangled webs that are nearly impossible to map and analyse. Nevertheless, the mantra ‘a chain is only as strong as its weakest link’ holds true. If businesses are to curb the ever-increasing threat of bribery and corruption, they must look beyond internal blanket control functions and off-the-shelf solutions. This is as much the case in the Channel Islands and the offshore sector as it is anywhere else. To do so, businesses need board-level engagement, robust internal control frameworks and the application of datadriven analytics to assess and identify risks as they emerge. This is only possible if a business is able to step outside of its own environment and close the gap between internal policies and external developments. It’s one thing to run internal controls and clamp down on unethical practices within an organisation, but if a business doesn’t keep one eye on external threats, it runs the risk of becoming complacent and set in its ways. This is difficult, but not insurmountable.
BEYOND COMPLIANCE Part of the challenge here is that some local firms have been relying for some time on existing tools and processes to stay on the right side of a rapidly transforming compliance landscape for financial services. This might be possible internally to a degree, but what about external risks? That is where firms need to embrace technology but also be realistic about their exposure to clients who operate in industries or jurisdictions where bribery and corruption are prevalent.
CULTURAL CUES While often underrated and undervalued, company culture should be front and centre of any strategy to curb bribery and corruption risk. Cultivating a culture of education, transparency and openness within a business and extending that to third parties where possible will give businesses an incredibly strong foundation on which to build out their future efforts. This will almost certainly involve some level of investment when it comes to communicating and instilling the company message throughout an organisation. Given the Global Fraud and Risk Report respondents’ concerns about third-party risk, these cultural checks may need to
extend outside the organisation. Businesses are also increasingly conducting a culture check on a target company as part of an acquisition process or similar transaction in order to look for issues that might be hidden from public view. This is where regulatory and compliance due diligence exercises can prove their worth. With the level of transactions in the local market, fuelled by private equity, we are certainly seeing a significant uptick in this area. Culture checks extend far beyond the now well-worn ‘tone from the top’ approach that businesses are used to taking internally. Instead, values and their accompanying messaging need to be formed on the ground with people who frequently represent the organisation and engage with clients and third parties. Those actors also need to be engaged and influenced. It is only then that businesses will be able to see an organic shift in culture and communication that in turn creates a ‘hostile environment’ for bribery and corruption. This change in approach to risk management will become ever more crucial in response to the renewed vigour in which the regulators in Jersey and Guernsey seek to uphold international standards by increasing enforcement penalties. Such visible measures help the islands retain their reputation for probity and were also a necessary response to the recommendations of MONEYVAL. The EU-based organisation is set to return soon for a further assessment of the regulatory authorities in each island and how they deal with infringements and failings by regulated firms. n
FIND OUT MORE
Kroll is the world’s premier provider of services and digital products related to valuation, governance, risk and transparency. It works with clients across diverse sectors in the areas of valuation, expert services, investigations, cyber risk, corporate finance, security, restructuring, legal and business solutions, data analytics, due diligence and regulatory compliance.
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Reaching out for regtech Regtech – aimed at streamlining and improving regulatory processes – is on the rise, along with a requirement for organisations to balance their associated risks with the dangers of standing still
WHEN IT COMES to regulation, we’re Words: Alexa Robertson
living in a ‘more’ time. More requirements. More in-depth screening. More verification processes. All across more interactions with more third-party institutions. The increased regulatory pressure on organisations, along with the catalyst of Covid-19, is leading many to overhaul their processes and streamline customer experience through the use of technology. But, as is often the case during any time of transition, making the shift to regtech can be daunting, particularly for smaller businesses or those less experienced in implementing new technologies. For Stephane Gimenez, Founder and CEO of Jersey-based fintech start-up MYCDD, embracing the opportunity of regtech is vital to ensure organisations don’t miss out on connecting with new customers – given the requirements being placed on businesses. “More and more individuals are having more engagements with thirdparty financial institutions – lawyers, banks, accountants and such,” he says.
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“Everybody needs KYC (Know Your Customer) documents. Regardless of where an organisation is based in the world, it has to share those documents so many times during the onboarding process that it’s pushing businesses away from our jurisdiction towards easier jurisdictions.” Gimenez continues: “There is also an increasing number of documents required, which means multiplying those processes by the number of businesses that need those documents. “Furthermore, each of those establishments has to review and renew those documents on a regular basis. Every time an individuals or organisation re-engages for a new piece of work, it has to submit these documents over and over.” It’s an outdated process, says Gimenez, given the increase in regulation. “The process has been around for 20 to 30 years but has got more and more complicated because of anti-money laundering, the risks associated and what we constantly hear about in the news,” he says. “The requirements are continuing to grow,
COMMON SENSE APPROACH Incorporating regtech to reduce the cost of this activity is basically common sense, according to Richard Field, Partner in the dispute resolution team at Appleby and a member of the Digital Guernsey Panel. “Regulatory compliance has long been seen as a ‘cost of doing business’ – a necessary but expanding list of requirements, all of which require training, investment and, significantly, time,” he says. “In terms of whether such costs – and time – can be minimised, while maintaining high standards of compliance, then technology clearly has a role to play. It can also help reduce elements of human error, which in the case of repetitive, mundane tasks makes common sense. Field continues: “The ability to leverage machine learning and artificial
intelligence (AI), or just simply automate processes, means the more complex tasks can be reserved for the experienced compliance professionals, enabling them to focus on the more technical areas of risk mitigation or compliance as opposed to the low-value, repetitive tasks. “The ability to sift, analyse and extract relevant data is also crucial in a world where we are swamped with information. Ensuring you are risk-screening the correct individual for sanctions purposes, for example, is fundamental.” Gimenez gives an example of ‘cleaning up’ the KYC status of a number of businesses that had been acquired across two jurisdictions by a company he was working with. “We had to go through in excess of 50,000 individuals in less than a year to get all the documentation we needed,” he says. “It took 18 months and the cost to the firm
and many businesses are now essentially relying on manual labour – picking up the phone or sending an email – to request those documents. The effort and resource that requires can be huge.”
The ability to sift, analyse and extract data is crucial in a world where we are swamped with information
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was astronomical. Anyone would think that’s a one-off exercise, but it’s not really because all these 50,000 individuals will all be reviewed at some point in time. So those spikes of KYC happen on top of day-to-day work, which completely disrupts normal working efforts.”
GREAT EXPECTATIONS As well as increasing efficiencies, tapping into the benefits of regtech is essential for ensuring Channel Islands-based organisations keep up with the increased digital literacy and expectations of new and existing customers. “It’s going to depend on the nature of the business, but there is an obvious risk – organisations that fail to prioritise [the shift to regtech] could be left behind,” says Sandra Lawrence, Executive Director, Collas Crill Compliance. “One of the things that’s happened post-Covid is clients have noticed that firms can use regtech if they want to, so there is a client-driven demand out there where organisations are increasingly expected to provide that as part of their service.” Richard Field agrees that clients are becoming increasingly sophisticated and requiring higher levels of service without any compromise on quality or cost. “They are also much more used to ‘ondemand’ service in their daily life now, whether it be streaming movies, accessing
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weather, shopping, music or financial data, or ordering items online. “Rightly or wrongly, this is driving a higher level of expectation,” he says. “This necessitates investment in technical solutions to increase response times and accuracy of data, and reduce the human cost of regulatory compliance.”
BALANCING THE RISKS Streamlining onboarding processes through the integration of technology is not, of course, without risk. “The risks associated with getting it wrong – whether civil
Post-Covid, clients have noticed that firms can use regtech if they want to, so there is client-driven demand out there
or criminal sanctions in the context of AML/CFT sanctions issues, or late filing of returns from a corporate governance perspective – are increasing,” says Field. “The time and cost involved in rectifying issues is also significant. In a market where D&O insurance is harder to come by, and often prohibitively expensive, prevention is far better than cure.” Sandra Lawrence believes it’s also vital to ensure that data protection processes are prioritised when planning the implementation of any new technology. “So many firms forget to even think about data protection at the very beginning,” she says. “I would urge all organisations to keep this front of mind, right from the proof-of-concept stage of the solution they are considering, and all the way through the process. “It’s all well and good having a great system, but if you’re breaching data protection laws, that’s obviously going to be counter-productive.”
HOW TO MAKE THE MOVE So, how can organisations that are ready to make the shift to regtech choose the right solution for their business model? And which solutions are proving the most effective for the early adopters? In the finance industry, the initial focus has been on identity management and customer onboarding, says Field, which are often the highest ‘compliance costs’ in the sector. “Juxtaposing what can be a lengthy and complex process with what can be a short and low-value engagement is a difficult task to manage,” he says. “We’ve also seen tools in use for regulatory reporting, transaction monitoring and wider risk management and compliance. “Quite often, the use of a digital portal, where information is centrally deposited or accessed, can reduce the risk of using outdated documents.” Scott Nelson, Director for Trust and Corporate Services at Fairway Group and a member of the Jersey Finance Digital Assets Working Group, says that despite all these challenges, there are ways of phasing in regtech so organisations aren’t overwhelmed by the transition. “The natural way into it would be to start with the electronic identity verifications and address locator technologies, so that when organisations are collecting data up front from clients, it’s all digital and the process is seamless,” he says. “When customers then come to refresh
these during the lifecycle of these processes, that can be done digitally as well. This can sit alongside the screening software that everyone’s already using. “The Fairway Group is taking the fairly bold step in the new year of moving to a fully digital onboarding process. Everything will be accessed via a portal that will be underpinned by regulatory technology, and that’s how we will collect all the necessary data for client onboarding.” Many of the most successful systems, says Sandra Lawrence, are based on a triage model that balances automation with the requirement for a human touch. “The systems that really work well incorporate hybrid business indicators that come up as part of the onboarding process for new businesses,” she explains. “If enough of these are triggered, the technology flags that a human is required to get involved. “That seems to work best because there are always going to be processes in that relationship where you need a human brain to review, on a case-by-case business, how the firm should proceed.”
FEAR OF THE UNKNOWN While the arguments for embracing regtech are plentiful, concerns about the unknown and the reliance on processes that have often been around for decades are some of the main barriers to change. “There can be a big fear of the unknown around new technology,” says Lawrence. “Firms have to really consider the key advantages of using regtech – how much time it could save on current processes in the long term, for example, and how it could benefit the organisation financially. “Businesses should treat it like any other system. Data protection and cyber security are vital, so organisations need to make sure these kinds of risks have been
identified and mitigated early on – and are reviewed internally on an ongoing basis. “You must ensure the system continues to work for you as a business,” she adds. “Once the door is open to it, I think people will start looking towards new systems of regtech and how they can further improve their business processes in the future,” concludes Nelson. “It’s a really exciting time.” n
Digital finance innovation Innovations in technology are increasingly helping to support businesses on the road to recovery, as well as the day-to-day businesses in today’s digital society. KPMG has recently formed a partnership with The ID Register to bring a full suite of onboarding and advisory services to Channel Islands clients. “As well as the private markets, we work in liquidation or bank failure situations, where we are able to build an online portal through which customers can submit claims electronically,” says Linda Johnson, Advisory Partner at KPMG. “The system can separate valid and non-valid claims by matching up information held on file against the information submitted within the claim. “Due diligence is submitted electronically, which can then be compared with a database of individuals and/or corporations
with an elevated level of risk. This helps to manage financial, regulatory and reputational risk. “Once the validity of both the claim and the claimant has been established and is deemed to be at an acceptable level of risk, a payment in full or in part can be made to the claimant’s bank account.” Tim Andrews, Founder of The ID Register, based in Guernsey, says working with a regulated firm helps to ease the burden of implementing new technology. To ensure that the technologies are adopted successfully, he says, firms should address the following key factors: • Governance, testing and ongoing monitoring • Data quality and existing processes • Knowledge and skills of staff • Operational resilience and controls.
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The pandemic has accelerated the need for digitalisation of payments, not least for fund and wealth administrators. Moves are now well under way, but challenges remain for all players – not least around culture, skills and fraud prevention Words: David Craik
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TEARING UP THE MANUAL Elgie says the exposure of the industry’s shortcomings during the pandemic has enhanced awareness of the need for technology to streamline business operations more broadly, too, with the ultimate goal being to create a ‘global payments hub’ – centralising all payments and improving cash management across multiple banks and currencies. That’s a big step on from processes pre-Covid-19, when it was still common
for administrators to have a drawer full of bank fobs that they would use to manually log on to online banking systems to make payments. Others still used physically signed payment instructions. “A typical payments process involves a paper-based checklist, such as the mandate and signatories, and fraud and compliance checks – all completed manually by an administrator. “Once that’s signed off, a payment is set up on one of the banking platforms. Then it is authorised into the banking platform, with a call back to check that beneficiary details are included. “This process often crosses departmental lines – and often jurisdictions – and is so slow and inefficient,” Elgie explains. The digitalisation of the payments process can eradicate all of that time and effort, he says. And a particularly important shift, which is central to realtime activity, will be the introduction of electronic bank statements. “Connecting accounting software directly with multiple banks, who will deliver electronic statements, eradicates the need to interact with every single banking portal manually,” he says. “This means that, once connected to the banks, you have the ability to have a centralised payment approval workflow and send payments directly to the banks without using banking portals and tokens at all. For businesses with multiple banks, this is an incredible efficiency drive.” Ed Adshead-Grant, General Manager and Director, Payments, at Bottomline Technologies, agrees that the forced acceleration of digitalisation during the pandemic period has driven greater – and faster – use of digital payments processes, and less reliance on batch payments.
The pandemic has been a huge wakeup call to Jersey and Guernsey trust and fund administration companies
“People want real-time information today. They are bringing the consumer life of fast payments into the corporate life,” he says. As well as delivering on client expectations and the convenience for fund administrators in general, he adds, it also gives treasurers the greater cash visibility, control and insights they crave to know their cash positions at all times.
MAKING IT HAPPEN Responsibility for implementing seismic changes to processes, particularly those involving payments, won’t sit solely with the banking institutions. There will also be requirements for firms – with changes needed to their internal processes, systems and technologies.
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FOR SOME, THE thought of a drive out into the country was a positive opportunity for much-needed respite from the toils and routines of the lockdown periods. But to those for whom that drive was a business activity – trying to tie down a signature to make a fund transaction happen or racing to get documents signed so they could be delivered to a law firm the same day – it merely added to the pandemic stress. The manual nature of many of the financial transactions and processes in the world of business and finance were exposed – as was the impact that they have on people’s ability to do business quickly and efficiently. “We have heard some horror stories of administrators driving around the islands, collecting signatories on a payment and struggling to deliver payment instructions to banks, who were also working from home with branches closed. The payments sometimes couldn’t be made at all,” says David Elgie, Director at Jersey-based treasury and investment specialist JCAP. “Those businesses that weren’t already using electronic signatories, such as DocuSign, had to quickly put these processes in place.” As such, the pandemic has been a huge wake-up call to Jersey and Guernsey trust and fund administration companies when it comes to the crucial area of payments. It has driven an acceleration in the use of streamlined payments – faster and more automated. And, given the huge growth in the sector in recent years, with several global businesses now headquartered in the Channel Islands, it’s a move that was certainly needed. “Trust and fund administration companies on the islands are, collectively, making thousands and thousands of payments a day,” Elgie says. “It is a huge headache for these firms. “If you work in a bank making payments, the process is relatively easy, because you are all plugged into the same network. But if you are working for a fund administrator or a trust company, you are the administrator for hundreds of different clients – all of which have multiple banking relationships. Sometimes it can be up to 50.”
payment (APP) fraud – where fraudsters take advantage of remote working and moves towards faster payments. It is something companies need to be more aware of, he says, and that will require changes to practices, such as strengthening ‘confirmation of payee’ techniques and systems. “APP is when people are tricked and redirected to put payments across remotely on faster payment rails. They are irrevocable and gone within seconds,” he explains. “It needs control. It needs more technical solutions and updated business practices to stop it – and to ensure people don’t lose trust in these automated systems. “I know of one company that has started making a phone call to ensure a payment has gone to the right person and right company. I commend them – but this is the 2020s. More needs to be done.”
PACE OF CHANGE
People want realtime information. They’re bringing the consumer life of fast payments into corporate life
On the banking side, this digitalisation is well under way. Many of the larger banks now provide connectivity technology to connect their systems to firms’ systems, usually via Secure File Transfer Protocol (SFTP) or a file upload into their platform. However, businesses with multiple banks and a high volume of payments are likely to choose to connect to their banks via the SWIFT network – a vast messaging network used by banks and other financial institutions to quickly, accurately and securely send and receive information – rather than having several individual connections to manage. That will require firms to embrace some kind of ‘middleware’ – software that
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bridges gaps between applications. As Elgie explains: “There are numerous pieces of middleware technology available that offer daily visibility into all your bank accounts, provide a payment approval workflow and facilitate automated bank connectivity. “The future is to look at middleware providers that allow companies to connect to their banks via SWIFT.” However, picking the right provider will require research. “SWIFT can be complex, and each format can be different, based on whether you are sending payments to Citibank New York or RBSI Jersey, for example. You need a vendor who understands these complexities and how to get these formats right every single time,” Elgie says.
INTERNAL CHALLENGES Another challenge for firms will be managing changes to working culture and the new ways of doing things. “People like to carry on doing things the way they always have. If you’re asked to approve a payment for £10m, you might previously have taken comfort from having a few pieces of paper to look through in your own time before committing to that payment,” Elgie says. “Automating the process can get people a little bit worried. So firms need to help them realise that this will save them both time and cost.” Adshead-Grant also raises the growing challenge and threat of authorised push
Despite all of these challenges, Elgie is confident that the move towards streamlined payments will continue at pace and quickly become an everyday practice across the sector. “Payments will become a centralised function and there will be a centralised payments team,” he says. “Perhaps that team will be centralised in a lower-cost jurisdiction, too. If you have all of your banks plugged into one platform, you will be more efficient.” Given the pain points exposed by the pandemic, a big driver for change has been speed and efficiency. But automated payments deliver other benefits, too. Enhanced security is one – with people no longer swapping tokens with each other. Another is that it removes the over-reliance on passwords, which are often an entry point for cyber criminals. Elgie says the software can also improve fraud detection, blocking unusual payments “made on a Saturday afternoon” or to an unusual jurisdiction. “There is a pace of change that businesses need to digest, transform and modernise on,” says Adshead-Grant. “Otherwise, they will be left behind. Taking three or four days to settle is noncompetitive. This is now a world of ‘instant’ and ‘real-time’. Even with huge payments, you can have security alongside the speed. “Money is not going out of the door without any checks or balances. Technology can de-risk and quicken up the process,” Adshead-Grant adds. Elgie agrees. “Pre-Covid, there were already plans to follow this route into automated payments, but it is a big project given the complexity of multiple banking relationships. So, it wasn’t top of the list then, but it is now. “Everyone understands that we just can’t have a manual process anymore.” n
Best cyber security practices when ‘working from anywhere’ With ransomware on the rise, Alex Blackwell, Head of Business Development at SystemLabs, looks at best practices to ensure that IT is protected in a hybrid work set-up The world has been working remotely for a long time now, so are most people pretty much up to speed with how to protect themselves from threats? Well, you would like to think so but, unfortunately, we’re still seeing people who haven’t got an adequate set-up in place. According to a recent Digital Readiness Survey by ManageEngine, 37% of respondents said their remote working devices had no restrictions in place. We were shocked to see that number, but also not surprised. Why do you think so many businesses are allowing people to work on machines that have no protection? For some businesses, it’s a sense of feeling that perhaps they aren’t prevalent enough to be targeted by an attack. For others, it’s not being 100% certain what needs to be done, while for others it involves issues with scalability or a reliance on in-office networks. So this really isn’t something that people can ignore? No. Anyone who is working with customers will more than likely be accessing or storing their private data, such as contact details and in many cases financial details, on their device, meaning they should have the necessary solutions in place to protect them. The only way to really ensure that data is protected is to install agent-based solutions on the endpoint. This means
that the security solutions are set up at a machine level, so that no matter where someone is working, they know they have adequate protection installed. Shifting to cloud-based storage also means that instead of keeping data on individual machines, it’s in an environment that’s encrypted and therefore more secure against attacks. So these solutions really do mean people can worry less and focus more on work? Yes, the solutions we provide are incredibly beneficial for the user as they create a secure environment to work remotely – but they also benefit businesses too. Setting up remote network security obviously involves firewalls but also allows administrators a deep dive view when it comes to VPN monitoring. At the same time, the ManageEngine solutions we work with allow businesses to monitor remote worker productivity so it not only provides security but also reassurance for everyone. It must be reassuring for businesses to know that they can monitor activity and threats, which in turn means being able to prevent attacks from the outside? Of course, businesses absolutely need to ensure their machines, and therefore company information, including customer data, are secure. However, the threat isn’t limited to outsider attacks. There are plenty of ‘insider’ threats to consider.
When you say “insider threats”, what do you mean? Well, Forrester research revealed that 25% of attacks on company networks were due to insider threats. With more people working from home or remotely, there is an increased risk of insider attacks purely due to the freedom of being in an environment where there is no physical monitoring of people’s activity. Unfortunately, even if members of your workforce who are targeting the company data don’t have privileged access, they may know what information they are looking for, where it’s stored on the network, and a way to gain access to it. How can businesses deal with that? Setting up zero-trust network access is a good start. This kind of technology runs user and entity behaviour analytics (UEBA) software and this monitors systems and user behaviour in real time to look for indicators of insider threats. If a potential threat or pattern of suspicious behaviour is identified, that person is given a high-risk score and when that crosses a threshold, they will be put on a watch list and monitored. This is clearly some intelligent technology at work? Yes, we’re very lucky to work with ManageEngine, which has developed and continues to develop these solutions, along with other security policy options such as security for workers’ own devices, privilege management and app validation. We’re more than happy to chat through these and other available options. n
If you would like to discuss ManageEngine solutions, contact SystemLabs at firstname.lastname@example.org.
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Across financial services and the wider business world, artificial intelligence and machine learning have the power to deliver a customer experience that is quicker, more flexible, more autonomous and more personalised – while bringing organisational benefits to boot. But hurdles remain… Words: Marco de Novellis
YOU’RE PROBABLY USED to speaking to virtual chatbots by now. Maybe your bank card’s been blocked or you’ve proven your identity just by looking into your iPhone’s front-facing camera. Artificial intelligence (AI) and machine learning (ML) are already well-established tools in the finance industry. According to the OECD, financial markets witnessed global spend of more than $50bn in AI across the finance and business sectors in 2020 alone. For financial services providers, much of that spend is intended to improve the customer experience. In a recent Capgemini survey, nine in 10 leaders of major finance firms said boosting customer experience was the key objective behind launching new AI-enabled initiatives.
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So what’s driving this race to invest technologies to drive the customer experience? For Martin Keelagher, CEO of Agile Automations, which provides process automation services to financial organisations, implementing AI and ML is about increasing efficiency – for both end-users and the businesses that deploy those techniques. AI tools can easily automate repetitive tasks, digest and interpret vast amounts of data, and then learn from the data to improve processes. AI also allows banks to respond to many customer service inquiries 24/7, or to analyse thousands of data points simultaneously to spot a potential security threat. “These are things humans wouldn’t be able to do in anything like the time it
line, including reduced cost of operations and increased revenue per customer. In banking, McKinsey estimates that AI technologies can deliver up to $1trn of additional value each year. Some of this can be realised in terms of full-time equivalent savings – the money you save by taking a human out and automating a process with a machine. But the return on investment that businesses can expect from AI goes beyond that. Barclays, for example, was fined £72m by the Financial Conduct Authority in 2015 for failing to run thorough checks on clients involved in a transaction worth £1.9bn. AI tools that are better able to prevent illegal transactions reduce the risk of financial crime and help organisations avoid hefty fines.
It’s also only by investing in AI that providers can offer the digital, flexible, on-demand services that customers increasingly expect. “We’re at a point now where you can pick up a phone and instantly access your bank or investment portfolio,” says Keelagher. “Organisations must invest in the proposition that allows that speed of access. When calculating ROI, you’ve got to ask: ‘What’s the cost of us not doing it?’”
PRACTICAL APPLICATIONS OF AI/ML The theory behind what these technologies can do and the benefits they can deliver has been well documented. But what do these technologies really look like? In fact, there are various practical applications of AI being implemented,
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takes an AI system,” Keelagher explains. By freeing up time through automation, he says, organisations can provide faster, better customer experiences – and efficiency for themselves in-house. AI machines are also more reliable than humans, helping organisations reduce the risk of human error and increase control over their processes. “A robotic workforce doesn’t get sick or take time off; it does the same thing day after day with the same level of competency. That’s especially useful during a pandemic, when organisations might have a significant variation in their workforce,” says Keelagher. According to Capgemini, firms that implement AI in customer-facing functions also see a positive impact on their bottom
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actually creates human intelligence, simply does not exist. Financial services providers are therefore leveraging AI to augment their staff, not to replace them. “I can’t think of a case where we’ve automated something that’s resulted in 20 people being made redundant. Instead, people are assigned to roles that are more fulfilling for them,” Keelagher says. The AI workforce combined with the human workforce gives firms capacity, reliability and resilience combined with empathy and human interactions. AI fills out spreadsheets, while humans focus on client relations. “This is still a high-touch industry and people don’t want that cold face of a machine,” says William Harris, Group Chief Digital Officer at investor services provider IQ-EQ. “We use AI to support our staff to become faster, more accurate and more efficient, so we can provide better financial advisory services done by humans.”
ADOPTION CHALLENGES Even so, when you talk about AI, some people still envisage the Terminator on a killing spree or robots taking over our lives. Others are concerned about privacy, or wary of murky AI algorithms tracking and using our personal data. As a result, AI needs some good PR, says Harris, a self-proclaimed AI evangelist. “We need explainable AI; to understand what
A robotic workforce doesn’t get sick; it does the same thing day after day with the same competency
data points an algorithm is ingesting, how it’s interpreting those points, and how it’s reaching an outcome,” he says. “To build trust, we need to talk about AI in a way that’s easy to understand, and show it’s a good thing that can improve people’s lives.” Security plays a key role in building trust. Harris works with a team of cyber security experts that hosts ‘war games’,
HUMAN PLUS MACHINE Despite advances in AI, most customers still value human interaction. Of 3,500 financial services consumers surveyed by Capgemini, 35% said their interactions with AI chatbots lack a human touch. Only humans have the empathy required to effectively handle customer complaints. True AI, a system that’s sentient and
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carrying out a variety of roles, which includes the following: • AI chatbots, or virtual assistants, answer commonly asked questions online, 24/7. When new questions are asked, the bot learns from them and improves the quality of its answers over time. • Robo-advisers provide automated, algorithm-driven financial planning services, analyse investment portfolios and use data to offer advice to investors and make automatic investments. • In banking and other financial sectors, running an AI algorithm over financial transactions provides insight into a customer’s banking habits, and AI tools can make suggestions to help customers manage their finances. AI tools can also help banks and credit lenders make smarter credit decisions. • The most common application of AI, however, is in robotic process automation, with systems learning off the data and becoming increasingly smarter and more efficient. • Machine learning, which recognises patterns in data, spots anomalies and corrects errors, has uses across governance, risk control and fraud prevention. After ML recognises potential fraud, it can automatically put a blocker on a client account. Aside from these practical roles, AI also has the potential to transform organisations’ Know Your Customer (KYC) capabilities, the key anti-money laundering measure carried out by finance firms to verify the identity of clients and investors. Tim Andrews founded The ID Register to provide a centralised, regulated and digital hub for investor onboarding and KYC, so investors can complete a due diligence profile once and avoid dealing with repetitive KYC requests. AI, he says, improves the KYC process for organisations by linking different information together from disparate sources to build a more comprehensive picture of the investor. While The ID Register still uses human judgement to authenticate institutional investors, other consumer-facing firms, such as Monzo, use AI-enabled biometric authentication to onboard new customers, recognising government-issued IDs and matching them to customers using facial recognition technology.
where programmers hack their own systems to test security. Again, however, the challenge is one of perception. While privacy is a valid concern, Keelagher says machine learning actually makes customer data more secure. “An intelligent system will recognise when it’s experiencing a cyber attack and do something about it.” Similarly, the main reason investors move to The ID Register is security. Typically, KYC is completed on a spreadsheet and the process is balkanised across financial institutions, with each following their own policy. As Andrews says: “Investors want more control over their own information and who has access to it.”
DATA CHALLENGE For organisations, the most significant adoption challenge is data. You can’t have AI and machine learning without a strong data set to operate from, but acquiring, storing and making data accessible can take time and money. Larger organisations with complex legacy systems, such as high-street banks, will need to make substantial investments in IT infrastructure and pool data into one usable source in order to truly harness the potential of AI. Despite all its significant setbacks, the pandemic has brought about a new era for AI. According to a survey of 47,000 banking customers conducted by Accenture in late 2020, 50% said they now interact with their bank via mobile apps or websites
at a glance: AI and ML
at least once a week, compared with 32% before Covid. In addition, 54% want AI tools to help them monitor their budget and 41% are “very willing” to use computer-generated banking advice. “The pandemic has advanced the understanding and acceptance of AI by a decade,” says Harris. With humans out of the office and resources stretched, Covid has also forced organisations to invest more in technology. In banking, the customer experience of the future will be quicker, more flexible, more autonomous, and more personalised, Harris predicts. Consumers will apply for mortgages and credit cards on-demand. Predictive analytics will change the way we manage our personal finances, and the continued advance of open banking will mean we’ll manage all our accounts in one place with a single point of interaction. Investors, too, will leverage AI to make ad hoc requests, Harris continues. “Rather than going to a wealth manager, you’ll come to a centralised client portal and get your current net asset value calculation in a matter of seconds.” Ultimately, Keelagher believes, the implementation of AI is about making the human experience better. “AI is going to free up people’s time and improve work-life balance, changing how people interact with their jobs and bringing about higher rates of retention in the workforce.” While getting organisations to adopt AI remains a challenge, at least now the door
The difference between artificial intelligence and machine learning: ● AI is an overarching concept to create intelligent machines that can simulate human intelligence and behaviour. ● ML is a subset of AI, referring to systems that can learn from data by themselves.
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AI combined with the human workforce gives firms capacity, reliability and resilience combined with empathy
is open. Harris reflects on the success of business magnate Henry Ford: “Consumers wanted faster horses and he provided them with the motorcar. This is our opportunity to do that in financial services. Instead of providing faster customer services, we can use AI to fundamentally change how our services are delivered.” n
AI/ML’s key benefits ● Freeing up time through automation ● Reducing cost of operations ● Increasing revenue ● Enabling remote services ● Preventing fraud.
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Reading between the lines What exactly is sentiment data? And can the insights it gives companies into the way their customers are feeling really help them grow their business?
Words: David Burrows IT MIGHT SOUND like something out of Tomorrow’s World, but sentiment data is a pretty straightforward concept – technology designed to enable businesses, particularly those in the financial services sector, to gauge customers’ mood and intentions. The idea is that they can then use this data to flex the products they offer, the engagement they have with customers and the way they communicate. However, while the concept might be straightforward, applying the data takes careful analysis and clear frameworks. So are the rewards worth all the effort? Adam Riddell, Director of Jersey-based Crystal Public Relations, says using digital technologies to assess customer and wider stakeholder sentiment is still an emerging discipline, but is a key area of evolution as organisations try to understand their audiences better, particularly against the backdrop of an ever-growing sea of data. As for whether the rewards are worth the effort, he believes businesses don’t really have an option. “Sentiment is really important and new tools are opening up new avenues to enable organisations to take great strides in this area. It’s far better to try to know how your key stakeholders are going to react to something than assume or make a best guess,” he says.
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“Ultimately, it will be how someone was left feeling that will impact you as an organisation the most. The old mantra is that customers don’t remember what you said or what you sold them, but they remember how you made them feel. Sentiment analysis is a fragile area and data needs to be carefully assessed.”
DATA DEVELOPMENT Many say the use of sentiment data in the investment sector is far from new. Oswald Lopes, Vice President at fintech specialist Infrasoft Technologies, agrees that sentiment data and its use in future market developments is not a new concept, but says it has taken time for the maturity and mining of the data to get more accurate. “There are a multitude of use cases that have already been successful in areas such as market research, customer service and lead identification, to name a few,” he says. “The maturity of the technology has definitely allowed for customer sentiment to be exploited based on behaviours – to enable more targeted marketing. “Where this has been successful and has proven useful is in the use of sentiment data in adverse media checks, to help compliance teams make informed decisions – this is proving to be invaluable.” Riddell highlights a couple of things going on here. First, it’s the volume of data – every click, like or share on any one of the growing number of platforms is generating more and more data, and trying to capture sentiment among that data presents a new opportunity. Second, this new opportunity is made possible by continued advances in technology, such as AI and natural language processing. “Sentiment used to be tracked through social monitoring and listening techniques, using fairly clunky metrics. But the tools now are getting better at understanding sentiment in large data sets – and quickly, too,” he says.
Lopes explains that sentiment data originates primarily from social media or the publicly available data of individuals – their ‘likes’, posts/blogs, reactions and affiliations. However, he warns of the need to be careful where the sentiment data being gathered is from a source that is trying to generalise over a cross-section of people – the source of such data may be biased toward a particular gender or age group. Sentiment data can be generated from anywhere, which, as Riddell points out, is why AI tools that can be plugged into multiple platforms to get a full picture of large data sets are such an attractive proposition. “If you are focusing on only a select few platforms, you are immediately cutting out the
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CHALLENGES TO OVERCOME
Customer experience noise from another channel, and that could prove costly,” he says. The accuracy of the technology available is still open to challenge, however, and organisations have to exercise some caution when assessing sentiment, he adds. “For instance, sentiment can change very quickly, triggered by a single announcement or development. Sentiment data might also be locked to a certain moment in time, so understanding that feelings can change quickly is really important. “There is also little in the way of standardisation in the application of sentiment data technologies – some technologies split very basically between positive, neutral and negative; others are more granular. So, maintaining some sort of consistency is important.” Riddell adds: “Finally, sentiment is very hard to read – sarcasm, poor grammar, typos or double negatives can pose problems for tech applications. In fact, it’s estimated that when humans evaluate a text’s sentiment, they tend to agree only 80% of the time, so the accuracy of human-designed digital tools would tend to fall below that threshold.” Given these accuracy issues, is the logical conclusion that sentiment data needs to sit alongside other research techniques, rather than as a standalone tool for customer decision-making? “Definitely,” says Riddell. “The key to managing and understanding data is understanding the limitations of that data as well as the benefits. Qualitative data such as sentiment is really the holy grail for
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marketers in terms of understanding and trying to predict future behaviours, but it needs to be taken alongside and balanced by other data too. “Understanding how sentiment data sits within the field of behavioural science is really important, while using other traditional and qualitative research techniques can help create a bigger picture and frame the sentiment findings.”
MEASURING THE COVID IMPACT The Covid-19 pandemic has clearly had a huge impact on how companies engage with their clients – and on consumers’ habits. So, has the turbulence of the coronavirus crisis shone a spotlight on the value of sentiment data for investors? Lopes suggests that with the current crisis preventing the usual levels of
qualitative data is the holy grail for marketers but it needs to be balanced by other data too
physical interaction with individuals, the insights provided by sentiment analytics have made the value of such data immeasurable – a trend he expects to become more common moving forward. Riddell’s take on things is that the experiences of the past 18 months have highlighted the benefits of sentiment analysis, but also its fragility. “The pandemic has been such a complex and nuanced experience, stirring up so many different ideas and feelings, that keeping track of sentiment has really been one of the key challenges for governments in trying to implement measures that are balanced between health advice and our wellbeing as human beings,” he says. “That’s been mirrored within the business and financial services spaces, as firms have tried to get a fuller picture of how customers or investors are feeling and how they are likely to respond in a highly charged environment.” The journey for sentiment analysis is unlikely to stop there. Further angles may yet be explored, such as the application of sentiment analysis on employees. After all, how well do firms really know how their staff are feeling? “Remote working has shone a light on the struggles of people working from home – the idea that firms can better understand staff in a more hybrid working environment in the future will be appealing,” Riddell concludes. “I think we can expect to see that sort of application more and more.” n
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The much talked about shift to remote working could open up opportunities for businesses and changing employee lifestyles – with some touting the idea of staff being based in different countries. But not all sectors lend themselves to this new world of working… and not all see the benefits Words: Alexander Garrett
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IF THERE WAS one image that demonstrated perfectly just how far technology had become embedded in our everyday working lives during the Covid-19 lockdowns, it was that of the Queen taking part in video calls live from Buckingham Palace. Even the monarch wasn’t exempt from a reliance on technology to ‘work from home’ in the remote working world. Beyond Buckingham Palace, technology also enabled organisations the world around to
Automation them to work from home for a number of days a week, and that really depends on the particular role they’re in,” says Paul Acton, Chief Executive of Sure Jersey. Their ability to work away from the office depends on factors such as whether they are customer-facing, particularly if they are on the retail side of the business, which needs people to be physically present, he explains. At law firm Carey Olsen, models of hybrid working are still being explored, but Employment Counsel Huw Thomas says the firm expects increasingly to see another form of working that could take the ‘remote’ element even further. “As I understand it, it’s certainly on the horizon that we would permit people to work from other jurisdictions,” he says. Most significant law firms in the Channel Islands already have a satellite office in London, says Thomas. “Working from home remotely, say, in another jurisdiction, is arguably just an extension of that. If you can do your job from anywhere, then why not do it from your home in another jurisdiction?”
NO ONE FIT FOR ALL For professions such as law and finance, that approach could raise potential regulatory issues, Thomas adds, which would need to be overcome. However, other sectors don’t face the same challenge. In the world of public
relations, for example, Guernsey-based Orchard PR has recently recruited an account manager who will work on Channel Islands accounts from London. “The individual in question is from Guernsey originally and has been working in Guernsey for many years. But, when we spoke to him about a role, he said he was looking to potentially move to London,” explains Head of Digital Mike Wilkins. “In the old days, that would have been the end of the conversation. But a lot of our clients have offices in London, as well as in Singapore and elsewhere. “So he will be able to attend events, meet up with client representatives and so on; using Microsoft Teams means he’s always with us and attends meetings virtually.”
BIGGER TALENT POOL With such ‘offshore’ employment likely to become more common, according to Thomas, it could also help to solve skills shortages in the Channel Islands, he adds – opening up firms to a far bigger talent and resource pool when recruiting. “We’re probably experiencing the same labour shortage as everyone else, and we’ve got probably greater challenges in terms of cost of living and the availability of housing,” he says. “So it’s likely to become a greater feature.” At BDO, Richard Searle also sees an opportunity to increasingly outsource specific skills, thanks to the improvements
Everyone working in the office is like a bag of marbles – all tightly knit and bouncing off each other
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continue to function in the most extreme circumstances – as capabilities that had once seemed only a future possibility were rapidly transported into everyday reality. Some months on from the full-scale lockdowns, companies in the Channel Islands, as elsewhere, are working out what this will mean for how they operate in future – including whether they need their employees in the same office, or even the same country. Or, indeed, whether it really is possible to work from anywhere. Some businesses on the islands have already made huge adjustments to how they work. At BDO in Guernsey, a fully flexible work policy was introduced when the first lockdown ended in July 2020. “Before that I always thought we had a good flexible working policy, but it’s only when you scratch the surface that you realise how much more can be done,” says Managing Director Richard Searle. “Basically, anyone in the firm can now work from home or from the office without limits in terms of days of the week, provided it fits with their job role.” In terms of timing, it’s expected that people carry out their work between 7am and 7pm, says Searle – a measure designed to prevent potentially harmful practices such as working through the night. But the same approach doesn’t fit all. At telecom services company Sure, a more cautious approach is being taken. “Our staff can enrol in a scheme that allows
What the office looks like will change, but technology will never replace physical social interaction
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seen in ‘collaborative’ technology. “We have a lot of skills here on the islands, but not everything,” he says. “So, if you’re dealing with green finance, for example, and you want someone to metaphorically kick the tyres on a wind farm or a solar panel farm, there are individuals in the relevant countries where those assets lie that we can access via our global network.” “We can bring them into the team and share files in a secure environment so that
we can use their skills specifically for the projects they’re needed on.” There are, of course, sound reasons why many organisations don’t want all their people working from home all the time. A key one is the issue of oversight. “If you can’t physically supervise employees, who knows what they’re doing with your data?” asks Thomas. “Arguably, that’s also a problem if they’re in the office but people are less likely to misbehave in the office and they’re easier to monitor. Employees who feel less observed are more likely to do things that you would prefer them not to do.” Data security is also the reason few professional firms are likely to countenance employees living a ‘digital nomad’ lifestyle, such as working from a camper van travelling around the Mediterranean, according to some. Meanwhile, company culture and togetherness are other reasons firms want their employees in the office at least some of the time. Searle explains: “A colleague came up with this metaphor: if you’ve got everyone working in the office, they’re like a bag of marbles; they’re all tightly knit and bouncing off each other. Whereas if you open the bag, they just disperse and you lose that interaction.” Acton continues: “There are social collisions that happen within the office
environment – for example, when two people bump into each other at the coffee machine and strike up all sorts of interesting debates and discussions. That really makes staff feel they are connected to the heart of the business.” Having younger employees spending time in the office might be particularly important, since they can learn a great deal from those around them, while training is often more successful when conducted face to face.
CALL FATIGUE The technology that is emblematic of working remotely is, of course, video meeting software. While apps such as Zoom and Teams have enabled the world to carry on talking during the pandemic, many people nevertheless have reservations about this form of interaction, with ‘Zoom fatigue’ becoming a common grumble. So, can video conferencing be made more like the experience of meeting people in person? Faster connection times – and fewer dropped connections – would be an improvement for many. But Wilkins believes there is also opportunity to be had from virtual reality technologies taking interaction to another level. “I recently compered an event around the rollout of fibre for residential use in Guernsey, which is very exciting for the
island,” he says. “We were discussing what’s coming down the line and, according to some knowledgeable participants, the answer is holographics. “At the moment, it can be quite hard to pick up the body language and expressions on people’s faces because you’re not in the room together. But this has the potential to be much more realistic.” The technology that facilitates remote working goes way beyond video. Cloudbased applications that enable teams to view and share files wherever they’re located are at the heart of being able to work from home and further afield. And the pandemic has undoubtedly encouraged many firms to accelerate the adoption of these tools and to expand the range of applications and services that are available online. “We offer a number of services we didn’t before the pandemic,” says Wilkins, “and that’s because of the technology.” Orchard moved into webinar production and support, and also producing videos from content supplied by clients. “We also decided to digitise our media training by putting it on an online learning platform,” says Wilkins. “Realistically, pre-pandemic, our target audience for media training would have been in the Channel Islands. But now we’re targeting the English-speaking world.”
So, remote working opens up opportunities in new markets as well as changing the work-life balance equation for employees – but in principle, at least, that also brings new threats. Why employ a Jersey-based company to carry out your IT support, for example, if you could have someone on a video call from Bangalore at half the cost? Many organisations will be counting upon the local regulatory, cultural and relationship advantages they have – as well as their accrued expertise – to ensure that remote working doesn’t mean losing their business overseas. For most in the Channel Islands, as elsewhere, the days of nine-to-five in the office, five days a week, are likely to become a thing of the past, and some form of hybrid working will most probably be the new reality. However, few believe the office will have a less important role to play. “For some businesses, being entirely virtual will work. But for me, the benefit of the office is about how we learn – it’s about collaboration, working together,” says Searle. “So I think that what the space looks like will change, but I don’t think technology will ever replace physical social interaction, because that’s a basic human characteristic.” n
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Knowledge Brain food for the busy business professional
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Office germ hotspots
Female sports up
New research by professional cleaning products company Chicopee has revealed which places in the office harbour the most micro-organisms. The company swabbed the main touchpoints in offices to test for aerobic bacteria, yeast and mould. The swabs were incubated and tested to find the worst offending areas. Top of the table is the humble computer mouse, with 580 units per square centimetre, followed by the kettle, fridge, laptop and bathroom door. Hand sanitisers come in at number 6, while printers, light switches, desk phones and kitchen cupboards make up the rest of the top 10. However, desks emerged with a relatively low germ count.
There has been a marked increase in public interest in women’s sports during the pandemic, according to a report by Sky Sports and Leaders in Sport. The research shows a significant rise in the number of men watching and engaging during the pandemic, with nearly a quarter of men (24%) saying they now follow more women’s sport than they did 18 months ago. More than two thirds who have increased their interest said that broadcast coverage was a significant factor. Some 19% said that news reporting has made them want to tune in or attend women’s sport in the past 18 months, while 41% believe that women’s sport should be treated on an equal footing to men’s when it is televised.
Lack of sleep can cause you to drag your feet, according to new research from the Massachusetts Institute of Technology. The study, conducted by MIT and the University of Sao Paulo in Brazil, found that the less sleep students had, the less control they had when walking during a treadmill test. However, catching up on sleep quickly improved their walking gait. The study has shown that walking requires more cognitive control than was previously thought, after previous experiments with a treadmill suggested that walking appeared to be an automatic process, governed mainly by reflexive, spinal activity, rather than processes involving the brain.
The vast majority of business travellers are willing to share their personal health data, as they look forward to spending more time travelling. So says a survey by travel technology company Amadeus. It polled 9,074 people who have travelled in the past 18 months across the UK, Spain, Germany, Russia, France, India, the US and UAE. It found 77% are eager to travel in the coming year, with 95% willing to share their personal information and health data for the use of digital health passports. Half said they will be travelling for business to a destination requiring a flight in the next year, falling to 44% in the UK. Europe is the top business destination, with 40% planning to travel there.
Office buildings that go green can command a green premium of 18% on sales prices, according to research in Australia. Knight Frank’s 2021 Active Capital report says the green premium on office building pricing is a growing worldwide trend, and Australia is leading the way with an 18% premium on sales prices for greenrated office buildings in Sydney and Melbourne. The study found that buildings in the two cities with a National Australian Built Environment Rating System (NABERS) energy rating of up to 4.5 stars have an 8% premium on sales prices over unrated buildings, while those with higher ratings enjoy an 18% premium.
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New in… BOOKS
at the coal face
Spider Woman: A Life by Brenda Hale (Bodley Heal, £20, hardback) This traces one woman’s journey from a North Yorkshire village to presidency of the UK’s Supreme Court. The allusion to Spider Woman is no accident as Baroness Hale evidently has superhero qualities. From her village school she went to Cambridge University and became a pioneering female figure in the maledominated law profession, making landmark rulings on areas such as domestic violence, divorce, mental health and equality. She became the UK’s first female law lord and subsequently the first female president of the Supreme Court, before in 2019 making one of the most controversial and important rulings of modern times: that Boris Johnson’ prorogation of Parliament was unlawful.
Black Gold: the History of how Coal made Britain by Jeremy Paxman (William Collins, £25, hardback) Coalmining was not just any old occupation, argues Paxman, it “drove industry, religion, politics, empire and trade. It powered the industrial revolution, turned Britain into the first urban nation and is the industry that made almost all others possible.” It also provided a key conflict in late 20th century Britain, when Margaret Thatcher’s government stood up to Arthur Scargill’s NUM – no surprise Paxo’s sympathies lie with the miners. He tells the story of coal from its Roman origins, through the industrial revolution to the modern era, recording the tough conditions miners faced and the strong communities they forged. With coal set to be consigned to history as a result of climate change, this will be read like an obituary.
Auto Erotica: A Grand Tour through Classic Car Brochures of the 1960s to 1980s by Jonny Trunk (FUEL, £24.95, paperback) This is a book not so much for petrol-heads as the people who pore lingeringly over the lines and designs of cars in the way that others consume porn. It’s fascinating to be transported back to the Sixties and Seventies, but somewhat sobering to remember that many of the cars from those days were pretty awful. Yes, the Aston Martin V8 was a thing of beauty, but the BMW 1500 looks like a little box, the Ford Anglia with its tailfins a sad parody of American classics, and as to the Fiesta… really? As well as endless pages of brochures and print advertisements, the book offers a potted history of some 50odd manufacturers.
Vanderbilt: The Rise and Fall of an American Dynasty by Anderson Cooper and Katherine Howe (Harper, £20, hardback) Chronicling the rise and fall of a legendary American family, the twist is that Cooper is a scion of the Vanderbilts, which means it’s not an entirely disinterested account. In the mid-19th century, Cornelius Vanderbilt – aka The Commodore – made himself the richest man in America by building empires in shipping and railroads. His son Billy doubled his money, but subsequently his descendants set about fighting each other to spend his fortune with their ornate summer residences in Newport and gilded drawing rooms in New York’s Fifth Avenue. These played host to lavish galas, as the Vanderbilt name became a byword for high society.
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In numbers: Merchant shipping RESOURCES
Average age of ships when they are scrapped Source: United Nations Review of Maritime Transport, 2019
Sustainability Leadership Executive Education Programme Imperial College Business School and online education provider Emeritus have unveiled an executive programme to equip business leaders and decision-makers with the knowledge and skills to better tackle climate change. Launching in February, it is aimed at leaders in all sectors who have functional or organisational responsibility for sustainability initiatives. https://tinyurl.com/32f6m2bn
1,382 Estimated number of shipping containers lost at sea every year from a total of 226 million Source: British International Freight Association
Global Talent Network The Global Britain Investment Fund’s new network of hubs aims to bring science and tech talent to the UK. Sourcing individuals from universities and research institutions, it will support their move to the UK to take up opportunities. It is launching in San Francisco and Boston, US, and Bengaluru, India, in 2022 and will be in six countries by 2023. https://tinyurl.com/5j8ecw9a
Culture & Creative Community The European Institute of Innovation & Technology has launched a Knowledge and Innovation Community, to support the growth of Europe’s cultural and creative sectors. It plans to help accelerate these sectors’ recovery and unlock economic opportunities in architecture, cultural heritage, design, fashion, film, music, publishing, performing arts and video games. The call for proposals has a deadline of 24 March, with entrepreneurs having access to a share of a €300m pot. https://eit.europa.eu/our-activities/call-for-eit-communities/2021
If shipping were a country, it would be the sixth biggest producer of greenhouse gases in the world, just ahead of Germany Source: BBC
1,647,500 Number of seafarers serving on merchant ships worldwide
Source: International Chamber of Shipping
Space Data Marketplace Supported by the French Recovery Plan and space agency CNES, and led by Dawex, the Space Data Marketplace aims to facilitate access to space data and create value for the space industry in France, Europe and internationally by offering inspiring use cases. The new organisation aims to become a one-stop shop for the space sector and organisations in multiple sectors that are increasingly interested in using space data. https://www.space-data-marketplace.eu/fr/
2,116, 401 Number of merchant ships of all sizes in the world Source: Infomaritime
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...manage upwards Your boss doesn’t seem to have the first idea about how to get the best out of you; their attention is focused on other things and they simply haven’t noticed your potential. So it’s time to take the initiative. You’re going to manage the relationship from this point onwards. But where to start?
Understand your manager
“It’s a good sign when managers ask their subordinates how they like to be managed. But there’s nothing to stop you from initiating this conversation”
Spend some time trying to understand what makes them tick, suggests Ben Richardson, director at Development Academy. For example, do they like detailed reports or do they prefer a summary? Is their communication preference for email or phone? Also, try to understand their vision and what motivates them. “Learning to listen is essential to managing upwards,” adds Richardson. “Things change, and your manager’s priorities will change with them. Listening means you will be able to adjust your approach when that happens.”
Treat them like your most important customer David McLaughlin, a Manager with the Chartered Management Institute, says you should think of your manager
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as a customer buying your skills and services. Then you become a service provider, and your responsibility is to ensure your manager is satisfied with what you’re providing. “We need to start thinking about what they need from us, how do they like to get that information, how do they like that service to be fulfilled?” Create your own service level agreement and share with them how well you’ve performed.
Tell your boss what you need from them If your manager doesn’t ask you how you like to be managed, then it’s up to you to let them know, advises Helen Floor, Director of 1-1 Recruitment. “It’s a good sign when managers ask their subordinates how they like to be managed,” says Floor. “But there’s nothing to stop you from initiating this conversation with your manager, provided you do it in the right way and respect that they may have their own methods.” What do you need, in terms of targets and objectives, briefings and coaching, to deliver?
Come up with solutions “Everyone loves a problemsolver,” says Floor. “One sure-fire way to win your
Business leaders on making it to the top
Getting ahead Andy Smith Head of Branch, Investec Jersey How did you come to work in the offshore banking world? manager’s good favour is to suggest solutions to problems rather than simply draw attention to them. If you repeatedly do this, you could well find yourself being asked to take on more, leading a taskforce or heading for a promotion.”
But don’t hide problems “A minor issue can develop into a major one if it’s ignored,” says Floor. “It’s better to share problems or issues with your manager straightaway, before they escalate.”
Be supportive The last thing your boss needs is someone who is undermining them the whole time and showing up their mistakes. It will simply come across as though you are looking to take their job. “Find out which parts of the business they enjoy and are good at, and that they don’t like doing or perhaps don’t have the skills to deal with,” suggests the CMI. “Show you are keen to learn skills which complement your boss’s skills, and win their trust by achieving things they value.” That way you are more likely to be picked out when a plum job does come up.
Coming from the industrial Midlands in the mid-1980s, I left school at 16 to pursue a career in finance. I joined National Westminster Bank in Wolverhampton as the office junior and over several years worked my way up. In 2000, I was working as a private banker in Birmingham and saw an ad for an international private banker role in Jersey, which looked exciting: the rest is history.
What makes this area of banking so rewarding, and what kind of personality do you need to succeed in this area? Irrespective of my role, deep down I’m a relationship banker – what I enjoy most about banking is the internal and external interactions with clients and colleagues. Helping individuals grow and meet their potential is massively rewarding. There’s nothing better than building enduring client relationships, where you go that extra mile to help the client. For me, the number one personality trait is empathy – only when you can put yourself in the client’s shoes and see things from their perspective can you begin to deliver solutions specific to them.
As a former Director of Macmillan, you are committed to charity work. What do you get from that? Although I’m fortunate to enjoy my role, ultimately we all work to live. My charity work is my passion and I’m still actively involved in raising funds for Macmillan. On its board, I learned that my skillset was transferrable and all charities need business professionals to create a strong governance structure. In turn, being on the board of a charity taught me many things about running a sustainable organisation with users at its heart – so a win-win-win for me, Macmillan and Investec.
How do you motivate your team at Investec? It starts with recruiting the right people. Investec wants focused, people-centric individuals who want to go the extra mile for clients. If we get that right, the rest is about creating a fun, supportive environment that allows people to grow. People are given autonomy to own their part of the business and, because we are a flat structure, they can speak to any of the leadership team to help drive the business forward.
Has cycling taught you anything in your work life? I’ve done several endurance events over the years (mostly for Macmillan) and they are all challenging, but they all teach you resilience and determination, the ability to keep spinning however hard it gets, and if you don’t quit, you will make it to the top.
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ot many global influencers have Tintin as their second following January, when she coined the expression “our house is on name, but then Greta Tintin Eleonora Ernman Thunberg fire”. Later that year she addressed the US House Select Committee is a guru like no other. Still only 18, she is one of the most on the Climate Crisis, as well as the UN Climate Action Summit in recognisable faces on Earth. More importantly, when she speaks, New York, after sailing the Atlantic in a carbon-neutral passage. the world listens, as was evidenced further at the COP26 climate She then sailed back to Madrid for the COP25 summit and conference in Glasgow. ended 2019 nominated “Person of the Year” by Time magazine. Thunberg’s “blah blah blah” speech at the Youth4Climate Thunberg’s influence is based on her uncompromising position pre-summit in Milan may appear on the surface to be the on the need for dramatic action on climate change. antithesis of thought leadership. But she was making She refuses to give credit to political leaders – even a serious point about words not being matched by progressive ones such as New Zealand’s Jacinda Ahern “We’ve had actions – “we’ve had 30 years of blah blah blah and – and has earned the wrath and ridicule of Donald 30 years of where has it led us?” – and the catchphrase was Trump, Vladmir Putin and Brazil’s Jair Bolsonaro. blah blah blah quickly picked up by activists to sum up frustration In doing so, she has amassed enormous support and where has with political leaders who, as the Queen put it, “talk, from activists, especially younger ones, around the it led us?” but they don’t do”. world in “the Greta Effect”. Thunberg famously came to the world’s attention in Thunberg, who has Asperger Syndrome, has often said August 2018, when she initiated a series of strikes at her it is not her responsibility to find solutions, but in the last school in Sweden to protest against climate change. That year, she year or so, she has, some think, become more constructive about was invited to speak at the plenary session of the United Nations the ability of science to stop global warming. For now, she has Climate Change conference in Katowice, Poland (COP24) and her shown little sign of shifting her focus, but still at 18, the Swede speech went viral. She spoke at the World Economic Forum the could have potential to extend her activism to other issues.
Mark Zuckerberg has let the world know the future of Facebook is something he calls the metaverse. In a recent interview, he explained it: “You can think about the metaverse as an embodied internet, where instead of just viewing content, you are in it. And you feel present with other people as if you were in other places, having different experiences you couldn’t necessarily do on a 2D app or webpage, like dancing or fitness.” Still confused? Virtual reality will be “an important part” of it, as will augmented reality, gaming, 3D and much else besides. “I think this is a persistent, synchronous environment where we can be together, which I think is probably going to resemble some kind of a hybrid between the social platforms that we see today, but an environment where you’re embodied in it.” Of course, the metaverse is not exactly new, even if Facebook’s take on it has raised its profile. It was coined in Snow Crash, Neal Stephenson’s 1992 sci-fi novel and, according to TheVerge.com, refers to a convergence of physical, augmented and virtual reality in a shared online space. Anyway, expect to hear a lot more about it. Just don’t expect Santa to get you one for Christmas.
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Fuzzy data Research data that simply isn’t very precise
Xaas Absolutely anything as a service
ALSO NEW IN THE WORLD OF
Top tech WHAT’S
Dating apps IT’S THE NORM NOW TO MEET YOUR PARTNER ONLINE – SO WHAT’S THE BEST WAY OF GOING ABOUT IT AND MAKING THE RIGHT CHOICE?
A recent study claimed couples who meet on dating apps are six times more likely to divorce in the first three years of marriage than those who meet IRL (in real life). Not exactly good news if you’re looking for love online. Family breakdown charity the Marriage Foundation, which carried out this investigation, concluded that the accelerated rate for divorce was due to couples who met online still being relative strangers when they decided to marry. But previous research by platform eHarmony, with Imperial College Business School, forecast that by 2035, the majority of babies in the UK will be born to parents who met on the internet. And there seems little doubt that the market for dating apps is booming, helped perhaps by the dearth of opportunity to meet people during the pandemic over the past 18 months. A new report by Grand View Research predicts that the global online dating application market size will reach $11.03bn by 2028, growing at a compound annual growth rate of 5.6%. The proliferation of smartphones and continued increasing internet penetration are among the major factors that are expected to drive this growth. And there’s also a continued proliferation of new apps. “If none of the other dating sites worked for you, try this one!” seems to be the logic. So where to start and what’s the difference between the apps? • To swipe or not to swipe is one of the first questions to ask. Tinder pioneered the idea that for each candidate you’re presented with, you swipe left or right; left to reject and right to show interest. Once you’ve swiped right, you can start to exchange messages with the other person. Swiping may have been a brilliant idea when first invented but it has got itself a bad name, partly because it is based almost entirely on physical attractiveness, and secondly because
it has been seen as a contributor to mental health issues among those who are rejected. So although many apps adopted a similar approach in the early days, increasingly newcomers avoid the swiping mechanism. • Proximity is another important factor. Many of the leading apps – including Tinder, Happn, Bumble and Match – use the location data on your phone to find people who are close to you in some way as potential matches. In some cases that’s real-time proximity – someone who may be standing less than 50m away; in the case of Happn, it finds people you’ve crossed paths with recently. • Gay or straight? The original app for gay men was Grindr, which would hook you up with people a few feet away, but it’s since been overtaken by Hornet, which claims 30m users worldwide. Meanwhile, Her claims the top spot for LGBTQ women. • Women friendly When it was launched in 2014, Bumble described itself as “the feminist Tinder”. It has one distinct USP: although men and women can use the site, only women can make the first move, an initiative designed to make women feel more confident and less intimidated. Many sites have now gone out of their way to become female friendly, for example through slowing down the dating process and taking it away from physical looks alone. • Political outlook While many sites allow you to state your political affiliation as part of the matching process, more and more daters are choosing sites that are specifically targeted at their sympathies. In the US, sites such as Liberal Hearts and Democratic Match were designed for people who didn’t want to find a mate who supported Donald Trump. And of course there are corresponding apps for those with more conservative leanings – Righter and DonaldDater to name a couple.
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Directory To advertise in the directory in print or online contact Carl Methven on email@example.com
Unleash the Power of Automations with Agile Automations Agile Automations specialise in developing bespoke Robotic Process Automations (RPA) and Robotic Desktop Automations (RDA), putting automation at the very heart of your organisation’s infrastructure. An organisation – where employees perform predictable, rule lead, highvolume, transactional processes and data manipulation – will boost their capabilities, increase accuracy, save money and time with RPA. Our robotics act with outstanding efficiency and accuracy, 24 hours a day, while offering enhanced Risk & Governance controls, sometimes eliminating the need for human engagement altogether. At Agile Automations, we do not use any robotics platforms, which allows us to offer a complete, yet flexible solution, for our clients; each automation is bespoke, designed to their unique individual requirements, without any need to compromise. This results in an enhanced Return on Investment. Just as we have seen robots revolutionise manufacturing – by increasing production rates, improving quality and cost savings – RPA is revolutionising the way we think about business processes. To find out how Agile Automations could automate your business, please do not hesitate to contact our CEO Martin Keelagher Email: firstname.lastname@example.org Website: www.agileautomations.co.uk Twitter: twitter.com/AAutomations LinkedIn: www.linkedin.com/company/ agile-automations/ Facebook: www.facebook.com/ AgileAutomations/
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Deloitte is the largest global provider of audit and assurance, tax, consulting, financial advisory, risk advisory and related services, bringing world-class capabilities and highquality services to clients. The company has the broadest and deepest range of skills of any global business advisory organisation and is a world leader in the professional services industry. We advise and deliver for the public sector as well as global and local businesses across every industry. Deloitte employs over 200 professionals in Jersey and Guernsey and is part of Deloitte North South Europe (NSE). Deloitte currently has approximately 330,000 people in more than 150 countries and territories, giving the firm the expertise to solve organisations’ most complex challenges and make an impact that matters. David Becker - Audit Partner, Guernsey D: +44 1481 703 335 email@example.com Jo Huxtable - Tax Partner, Guernsey D: +44 1481 703 308 firstname.lastname@example.org Adam Cichocki - Advisory Partner, Jersey D: +44 1534 824 393 email@example.com Martin Rowley - Tax Partner, Jersey D: +44 20 7007 7665 firstname.lastname@example.org Siobhan Durcan - Audit Partner, Jersey D: +44 1534 824 274 email@example.com Theo Brennand - Audit Partner, Jersey D: +44 1534 824 396 firstname.lastname@example.org
Fiduchi is a leading independent financial services company providing solutions to high-net-worth individuals and businesses around the globe. Our independence ensures we have the flexibility to deliver bespoke solutions - that’s what makes us different! Over 25 years, our director-led teams have built long-term valued relationships with clients and their professional advisors, ensuring a pragmatic and trusted approach to their wealth structuring needs. Using the latest technological cloud-based solutions ensures we have the flexibility to deliver timely and innovative solutions that our clients require. Visit our website to see the comprehensive range of services we provide in the following areas: l Private Wealth l Corporate Services l Fund Services l Yacht Services l Employee Services For more information, visit www.fiduchi.com Alternatively, you can contact: Robert Ayliffe - Executive Director Tel: +44 7700 349 750 Heidi Thompson - Executive Director Tel: +44 7797 966 408 Terry Northcott - Executive Director Tel: +44 7797 715 421 Follow us: Dubai / Jersey / London Fiduchi is regulated by the Jersey Financial Services Commission. Full legal, data and regulatory notices are published on our website. Fiduchi® is a registered trademark of Fiduchi Group Limited.
We are IQ-EQ, a leading investor services group that brings together a rare combination of global technical expertise and deep understanding of clients’ individual needs. We have the know-how and the ‘know you’ to provide a comprehensive range of compliance, administration, asset and advisory services to fund managers, multinational companies, family offices and private clients operating worldwide. We act as a trusted partner to our clients, helping them to invest and preserve their capital in a sustainable and compliant manner. IQ-EQ employs a global workforce of 3,400+ professionals located in 23 jurisdictions, giving us a genuine global reach. We have assets under administration (AUA) exceeding US$500 billion. In the Channel Islands, we have 380 people across our Jersey and Guernsey offices and our expert, director-led private wealth, corporate and fund administration teams work closely with a wide array of international clients as well as their advisers. To find out more and discuss your specific requirements, please contact: Mirek Gruna Chief Commercial Officer, Jersey E: Mirek.Gruna@iqeq.com T: +44 (0)1534 714 486 Jacques Vermeulen Chief Commercial Officer, Guernsey E: Jacques.Vermeulen@iqeq.com T: +44 (0)1481 231 941 For more information about IQ-EQ’s global service offering, please visit iqeq.com IQ EQ (Jersey) Limited and IQ EQ Fund Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. IQ EQ (Guernsey) Limited is regulated by the Guernsey Financial Services Commission. IQ EQ Management (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987. IQ EQ Depositary Company (UK) Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom under firm reference number 481843.
KPMG in the Crown Dependencies is a leading professional firm that delivers audit, tax and advisory services. Operating across the islands of Guernsey, Jersey and the Isle of Man, it is a standalone, locally led partnership with over 450 members of staff. The combined practice forms a core part of the KPMG Islands Group, made up of International Financial Centres and Overseas Territories spanning a sub-region which extends from Malta to the Caribbean. This grouping works closely with other KPMG practices in major global financial centres such as London and New York, ensuring that clients can benefit from an optimal blend of local and global expertise from KPMG’s network. KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. It operates in 146 countries and territories with over 220,000 people working in member firms around the world. Find out more at www.kpmg.com/channelislands Contact details: Neale Jehan Senior Partner KPMG in the Crown Dependencies E: email@example.com T: +44 (0) 1481 721000
Ogier provides legal advice on BVI, Cayman, Guernsey, Jersey and Luxembourg law. Our network of locations also includes Hong Kong, London, Shanghai and Tokyo. Legal services for the corporate and financial sectors form the core of the business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. Ogier has strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and insolvency and property. We are a registered listing agent for The International Stock Exchange (TISE, formerly known as The Channel Islands Securities Exchange or CISE) and frequently advise companies listing on other exchanges whether offshore or onshore. We also provide pan-Island legal services for local Channel Islands businesses and individuals. Contact: Guernsey Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA T +44 (0)1481 721672 E firstname.lastname@example.org Jersey 44 Esplanade St Helier Jersey Channel Islands JE4 9WG T +44 (0)1534 514000 E email@example.com Website: www.ogier.com
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Building trust in society and solving important problems We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 390 staff in the Channel Islands you work with (or 225,000 people across the PwC global network of member firms), they’ll start by asking the following questions: Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy? When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for.
SystemLabs SystemLabs is a local IT solutions and services provider offering smart solutions in a digital world. Services include progressive web application development, internal and outsourced cyber security, outsourced IT helpdesk services, strategic support and delivery for digital transformation along with training and hardware offerings. Our managed service and helpdesk services can provide 24/7 monitoring and support depending on your SLA ensuring you have a stable and reliable network that meets your needs. As a local provider we are unique in our ability to offer this range of solutions from one provider, on Island, which results in seamless integration across your entire IT infrastructure, improved response times and a more personal business relationship. Services we offer include:
Talk to us about your issues and aspirations.
l Web development (PWA’s)
For further information, please contact:
l IT business solutions
John Roche, Partner, Guernsey Phone: +44 1481 752040 Email: firstname.lastname@example.org Karl Hairon, Partner, Jersey Phone: +44 1534 838276 Email: email@example.com Follow us: @PwC_CI www.pwc.com/jg
l Cyber security
l Digital transformation strategy and
l Managed services l And much more
SystemLabs The Suite, 4 Wharf Street. St Helier, Jersey JE2 3NR Email: firstname.lastname@example.org Phone: +44(0) 1534 625736
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Digitalising Corporate Services, Trust and Fund Administrators with integrated software TrustQuay was formed from the merger of Microgen Financial Systems and Touchstone Wealth Management to become the global leader in technology for the corporate services, trust and fund administration markets. With 30 years’ experience, TrustQuay serves more than 450 clients and 17,500 users in over 30 jurisdictions, through 9 offices worldwide in key markets including Jersey, Guernsey, United Kingdom, Luxembourg, Singapore and Australia. The corporate services, trust and fund administration market is undergoing unprecedented change, and the need to help firms leverage technology and digitalise their business models to drive innovation has never been more important, not just from a back-office perspective but with regard to client engagement. TrustQuay offers corporate services, trust and fund administration clients in the Channel Islands and worldwide the strongest product range and widest global coverage to help clients maximise efficiencies, reduce costs, ensure compliance and drive new revenue opportunities. We continually invest in our technology and have the highest targeted R&D spend of any provider in our sector. To find out more about how TrustQuay can help you, please visit our website: www.trustquay.com Or contact us at email@example.com
Follow us on LinkedIn Follow Businesslife on LinkedIn to be the first to hear about Channel Islands business news and features from the islands’ financial services sector. https://www.linkedin.com/company/bl-global
Will robots really take our jobs? The sectors most likely to be affected by augmentation
Transportation and storage Manufacturing Construction Administrative and support service Wholesale and retail trade Public administration and defence Financial and insurance Information and communication Professional, scientific and technical Accommodation and food service Human health and social work Education
24.0% 25.3% 16.0% 18.4% 22.0% 25.6% 29.3% 23.3% 23.1% 12.0% 17.3% 7.6%
Augmentation – dynamic interaction with technology for clerical support and decision-making, which also includes robotic tasks in semi-controlled environments – is likely to have a significant impact on multiple sectors by 2030, according to PwC. The firm carried out one of the most comprehensive explorations of the potential impact of tech and automation on different sectors in 2018 and published its findings in a report entitled Will robots really take our jobs?
It found that automation isn’t just an issue for low-skilled workers. In fact, the report highlighted the biggest impact as being on financial services firms, especially operations where machines can deal with more data, at higher speed, more accurately. The report said technology augmentation will lead to new opportunities, such as an ability for investment advisers to increasingly manage their teams and clients remotely – opening up the option for more Channel Islands-based roles.
Source: Will robots really steal our jobs? An international analysis of the potential long term impact of automation (2018), PwC
Corporate | Funds | Capital Markets | Private Client
Promoting and protecting investment worldwide Ocorian is a global leader in corporate and fiduciary services, fund administration and capital markets. Our global network delivers customised, scalable solutions providing the support our clients need: how and where they need it. • • •
Expert teams Trusted partner with flexible solutions Committed to your success
For more information on our services go to www.ocorian.com Bermuda | BVI | Cayman Islands | Guernsey | Hong Kong | Ireland | Isle of Man | Jersey | Luxembourg | Mauritius | Netherlands | Singapore | UAE | UK | USA Information about our regulators is available online
The point of change. We know there is no one-size-fits-all. This is why our sustainable investment and legal experts provide clients with a bespoke approach to identifying and achieving ESG and impact goals across the investment spectrum.
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