Q: In what areas do fintech and traditional finance houses complement each other to support global capital flows?
Adam Brown (AB): We see fintech and ‘traditional’ institutions as being symbiotic and complementary to each other. The finance sector in Jersey has been established for 60 years now and the fintech scene has emerged to support the incumbent industry. Jersey is all about connectivity and working together across borders to find solutions. For instance, Jersey has earned a reputation for banking, private wealth, funds and capital markets work, as well as specialist areas such as Islamic finance, philanthropy and sustainable finance, and we’re seeing fintech play an increasingly central role in supporting all of these areas and opening up new opportunities for us as a jurisdiction.
We are seeing, for example, the use, management and analysis of data as absolutely vital to supporting international capital flows, and the adoption of advanced regulatory technology as pivotal in ensuring financial flows can be transferred robustly and securely across borders, in line with all due diligence and regulatory requirements. There’s also a big speed benefit at play here, with technology enabling capital flows to be made much faster and more efficiently, and that can be a real differentiator for Jersey.
Q: How is fintech embedding itself in Jersey’s finance industry?
AB: Our ambition is to be the easiest international finance centre to do business with remotely in a digital world, and as such, we believe in the importance of transforming the financial and related professional services industry to become highly digitised, innovative and customer-centric. That ambition has been aided by our forward-thinking regulatory approach which has been vital in cementing our standing as a highly successful digital jurisdiction.
We are seeing fintech embed itself in various ways, with a view to increasing productivity, delivering cost efficiencies, enhancing client service, creating product diversification and bolstering risk management. For instance, family offices are increasingly wanting ‘always on’ digital accessibility to advisers; institutional investors are demanding up-to-the-minute reporting; and banks and other institutions are looking more at remotely onboarding clients through digital ID and KYC checks. We’ve seen fintechs aligned to the needs of our finance industry start, grow and scale on the island as well as established fintechs relocate here too.
Q: How does the recently announced collaboration between Jersey Finance, Digital Jersey and Locate Jersey support fintech innovation?
Jessica Osman (JO): The ‘Jersey for Fintech’ initiative means an island-wide supportive environment and vision for fintech businesses to start up, grow and flourish. For all key fintech stakeholders such as Digital Jersey, Jersey Finance and Locate Jersey to actively come together in this space and say ‘we’re open for business’ sends a powerful message of a joined up jurisdictional approach to fintech.
With a well-established finance industry, autonomous government, supportive regulators, and world-class infrastructure, Jersey has a lot going for it to support fintech innovation. This message is something we hope to take to conferences and events off island (when time permits) to raise Jersey’s profile as a fintech hub and attract more fintech businesses to the island.
We also engage closely with industry on island to understand financial services needs and to match those up with local tech providers to find the right solutions. This approach creates more local procurement of product and services and results in a growing tech industry, as well as driving the digital agenda within financial services – so a win-win for Jersey. To have a joined-up approach and close collaboration enables us to be efficient in responding to industry needs and to be nimble and agile when working with firms interested in relocating to the island.
Q: To what extent has COVID-19 accelerated change in the fintech space?
JO: Before the pandemic, seemingly progressive firms in financial services were those having a digital transformation plan, a three to five-year plan to transition from physical (face-to-face, paper) to digital – and that’s only those that had a plan at all.
With the pandemic, the transition to working from home, literally overnight for many, brought with it the imminent need to communicate and exchange information virtually in a secure manner. If there is a silver lining to every situation, in this case it was accelerating that digital transformation plan from a three to five-year plan to three to five months.
We have seen large, traditional institutions close their high street branches and refer all communication to online tools, and we have seen firms with no online capabilities whatsoever implement solutions at record speed. Jersey has coped particularly well; given the nature of our industry being predominantly international, the need to communicate virtually already existed. Likewise, our world-class infrastructure and 100 per cent full-fibre network on the island has meant minimal disruption to our ability to operate efficiently.
At Digital Jersey, we have been working hard to drive the digital agenda in financial services and we believe that the progress made during the last months is here to stay.
Q: How is Jersey focusing on digital upskilling to support its fintech aspirations?
JO: Fintech encompasses everything from cybersecurity and cloud computing, data visualisation and AI machine learning, to blockchain and coding. But fintech at a core level is the understanding and ability to efficiently use the technology you already have within your organisation – and very often this is not the case.
A digital education and training culture should be ingrained into all business to keep talent relevant and employees stimulated. The Digital Jersey Academy opened in 2019 and is the island’s first centre of excellence for digital education. Alongside workshops and events, it provides both full-time and part-time higher education degree level courses, as well as short courses such as data science and coding for those looking to upskill.
The flagship course at the Academy is the Digital Leadership programme which, developed in partnership with industry, provides the capabilities, skills and experience needed for today’s fast-changing workplace and jobs for the future. It focuses on the key competencies needed in any agile business and covers a range of subjects particularly suited to fintech. We work closely with Jersey’s finance sector to understand the future skills requirement and try to address those within our curriculum.
We believe Jersey has moved quickly to futureproof its already successful financial sector to allow fintech talent, both young and old to thrive.
Q: Looking forward, are there any areas where you see fintech providing particular added value to Jersey’s finance industry?
AB: Fintechs can move fast, they are nimble, agile and tend to have the ability to refocus their solutions quickly and as needed, to respond to market demands. In a rapidly evolving international financial services context, that’s really important, so we see fintech providing benefits across our core sectors.
In banking for instance, the future will be about customer choice and access to different bespoke propositions and digital delivery and onboarding will be a key part of that.
In funds, automation, efficiencies and speed to market will be key, and technology will be critical to identifying opportunities and associated risks and then supporting managers with the marketing and distribution of their funds, investment strategies and assets under management.
Within private wealth, we anticipate that the future will be all about a hybrid model of technology-enabled analytics and portfolio management recommendations. In this sector, clients are really interested in service excellence. That’s where the focus has to be and investment in technology will have to be targeted at ways to increase client satisfaction and improve the way client experiences are handled remotely. We will also see the use of digital tools for more granular investment opportunities and modelling of portfolios as part of a risk-based investment approach.
Across all areas, there are an ever-increasing number of technology solutions to enhance the way in which we keep our clients safe and consumers protected – from AI and regtech to automation and cloud-based solutions.
The key will be in really understanding international investor behaviours and needs and targeting fintech innovation in areas that are going to make a positive difference and support our proposition as a jurisdiction of choice.