AROUND A DECADE ago I had the pleasure of working in the communications team at the world’s largest insurance market. It was a fascinating place – insuring everything from luxury holiday resorts to satellites to Bruce Springsteen’s voice.
Each year, the market would produce a future risks and trends report. To say it was a simplistic task would be a huge disservice to the mightily clever risk analysts, underwriters and actuaries charged with predicting the future.
But these were relatively steady times and the main areas of focus were pretty similar: the expected severity of the forthcoming hurricane season, the stability of the financial markets, and a few slowly emerging tech and digital trends, to name a few.
The occasional ‘Black Swan’ event would rock the ship – a volcanic dust cloud or the horrific tsunami in Thailand – but these were generally steady waters.
Fast forward 12 years and the world is very different. A combination of huge market volatility and uncertain macroeconomic factors – ranging from the conflict in Ukraine to rising inflation and interest rates, the fallout of the pandemic and rapidly advancing technologies – mean the world is changing faster than ever and the future is increasingly difficult to predict.
But that’s exactly what we’ve attempted to do in this issue. From the future disruptors likely to change the course of your business going forward, to changing customer expectations and the ways in which technology is automating and streamlining everything from customer engagement to investing – we explore the emerging trends increasingly coming into play.
One area that has already been hugely disrupted by technology and which looks set to continue changing is that of the customer experience. The emergence of technologies that fuel automation, artificial intelligence and bespoke digital engagement are rapidly replacing the human touchpoint.
They are enhancing speed of access for customers and efficiencies for businesses.
But, as our article on this topic finds, some tech advancements in this area are being met with resistance from some consumers, as they battle to retain the security and comfort of human interaction.
Of course, the customer isn’t always aware of what they want until they get it. Henry Ford’s famous quote about the invention of his ‘affordable’ car springs to mind: “If I had asked people what they wanted, they would have said faster horses.”
But, as technology continues to automate the customer experience, firms will need to be mindful of striking a balance that keeps today’s consumers happy while delivering the convenience craved by tomorrow’s.
Also in this issue, we identify and examine six major trends and disruptors you will likely need to be aware of as they come down the line. From the emergence of the fifth industrial revolution – as we only just seem to be getting to grips with the fourth – to the cost of talent, energy supply, friend-shoring, the Metaverse and inflation, these are the issues we believe could have the biggest impact in the near future.
As many of these topics suggest, not all disruption is bad – often helping businesses find a cutting edge, streamline and find better ways of doing things.
Our article on the rise of direct indexing in the US – asking whether it could be the next big investment trend here – highlights one such disruptor. A technology-driven approach to investing that uses software to enable investors to replicate an index that will produce various benefits, its customised nature means that the stocks selected can reflect the personal values of the investor –while allowing the tax-efficient harvesting of losses. That’s a clear example of tech disruption offering benefits for all.
Of course, some disruption is negative for all. Surging inflation and market uncertainty are having an impact on many parts of the sector. Meanwhile, our article on the role of technology in the financial services sector asks whether the complex network of new systems and process could actually do the opposite of what’s intended, and build barriers to service rather than convenience.
As with many emerging disruptors, only time will tell what their real impact will be. Regardless, with change occurring at the pace it currently is, firms will also need to find the capacity to deal with even more emerging trends alongside them. n
Jon Watkins is Editor-in-Chief of BusinesslifeFirms must strike a balance that keeps today’s consumers happy while delivering the convenience craved by tomorrow’s
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Top-level job movers across the islands
What do the current economic crises mean for corporate services businesses and investors?
Direct indexing, seen as a tax-efficient and highly bespoke way of building an investment portfolio, is big in the US. Will the Channel Islands follow?
Technology in financial services has delivered everything from realtime payments to rapid customer service – but will too many systems create more barriers than benefits?
With energy supplies under threat, there are plans to move the Channel Islands to alternative energy sources
David asks if the rapid rise of technology in financial services, as well as providing plenty of advantages, from realtime payments to more rapid customer service, risks creating unintentional barriers.
From friend-shoring and 5IR, to the cost of talent and energy supply, Sophie identifies six disruptors and emerging trends set to have an impact or provide a cutting edge for your business.
As automation extends its hold on customer experience, companies must stay focused on traditional values
48 talent Channel Islands firms are struggling to recruit young professionals – and a housing crisis is at the root of the problem
Six disruptors and emerging trends that are poised to have an impact on businesses in the coming years
The knowledge AI art, solar power numbers, Sabine Weyand, plus books and online resources
David, meanwhile, examines what current macro-economic influences, from the conflict in Ukraine to rocketing inflation, might mean for the corporate services market and investors.
And Alex looks at whether technology and automation, as they play an increasingly pivotal role in delivering the customer experience, could damage traditional customer values.
The Guernsey Financial Services Commission has published investment figures for the second quarter of 2022.
The total net asset value of Guernsey funds has decreased in sterling terms during the last quarter by £6.8bn (-2.2%) to £302.8bn. Over the past year, total net asset values have increased by £30.2bn (11.1%).
Within these totals, Guernseydomiciled open-ended funds decreased over the quarter by £0.2bn (-0.3%) to £54.2bn, an increase of £4.2bn (8.5%) in the past year.
The Guernsey closed-ended sector decreased over the quarter by £6.6bn (-2.6%) to £248.6bn, an increase of £26bn (11.7%) in the past year.
Within the totals for Guernsey funds, Guernsey Green Funds held a total net asset value of £5.3bn at the end of the quarter.
The non-Guernsey scheme regime was revoked by the GFSC in May 2021. Quarterly NGS reporting is replaced by extended annual reporting on activities around investment assets serviced in Guernsey.
The Government of Jersey has published its National
strategy for combatting money laundering, the financing of terrorism and the financing of proliferation of weapons of mass destruction
The purpose of the strategy and action plan is to document Jersey’s position in supporting international efforts in the fight against all forms of financial crime and areas of focus to increase effectiveness.
This financial crime strategy sets out the island’s vision, strategy and action plan for combatting:
• Money laundering • Financing of terrorism
• Proliferation financing. In addition, the government has published its National statement on financial services and financial crime: activities, risk appetite and mitigation, setting out Jersey’s approach to risk relating to its finance sector:
• Outlining the main sources and types of risk Jersey’s finance centre presents
• Articulating the boundaries of Jersey’s appetite for financial services related activities
• Setting out the framework for how Jersey identifies, sets tolerance for and mitigates risk.
The risk statement will be updated in response to any significant changes and revised annually by the government.
The risk appetite defines what risks are accepted and which are not and the overall risk is removed or reduced via the
Carey Olsen’s Guernsey corporate team has advised Fintech Asia, a Guernsey-incorporated special-purpose acquisition company, on its admission to trading on the Main Market of the London Stock Exchange. The focus of the SPAC is to acquire a business or businesses in the fintech sector that offer innovative solutions that improve the delivery of financial services in Asia. The Carey Olsen team advising Fintech Asia on the Guernsey legal and regulatory aspects of its listing, working with onshore counsel Pinsent Masons MPillay, comprised Partner Tony Lane, Counsel Andrew Tually and Senior Associate Jamie Oldfield. The same team has advised another Guernseyincorporated SPAC, Ikigai Ventures, on its admission to trading on the Main Market of the LSE. Ikigai was established to acquire companies with a focus on sustainability and ESG strategy as part of their core business.
Appleby has acted as Jersey and Bermuda counsel, alongside Gateley, to private equity firm NorthEdge on its investment in Friend MTS, a global provider of video content security services. Founded in 2000 and based in Birmingham, with offices in Europe and the US, Friend MTS provides content owners, broadcasters and operators with security and platform protection solutions, including network threat intelligence, forensic watermarking and global media discovery optimised with automated content recognition. The Appleby team was led by Jersey Partner Christophe Kalinauckas and Bermuda Partner David Clark.
Bedell Cristin has advised the management team of Theramex, a global pharmaceuticals company focused on women’s health, on the Jersey law elements of its sale by CVC Capital Partners VI to global investment firms Carlyle and PAI Partners. The sale of Theramex will enable the business to expand its suite of products across existing and adjacent therapeutic areas and accelerate further international expansion. Bedell Cristin’s team, acting alongside Taylor Wessing, was led by Partner Guy Westmacott, with assistance from fellow Partner Alasdair Hunter and Associate James Peart.
Walkers’ Jersey and London teams have advised JPMorgan (and other global financial institutions) as lender to Waldencast Acquisition Corp, a special-purpose acquisition company, on its $250m debt facility to acquire beauty brands OBAGI and Milk Makeup. The Walkers teams, working with lead counsel Simpson Thacher & Bartlett in New York, were led by Partners Nigel Weston in Jersey and Mark Galazzi in London and included Senior Counsel Elaine Kelly in Jersey and Senior Associate Ross Wilding in London. n
with the perfect sea view.
From strolls round the castle and walks in the park, to knowing the best pubs
to knowing the best pubs
dark.
Sure has reached an agreement with Bharti Global to acquire 100% of Airtel-Vodafone in the Channel Islands, subject to regulatory approval in Jersey and Guernsey. The merger will trigger significant investment in the islands’ mobile networks, with up to £48m invested in a new mobile network.
Royal Bank of Canada (RBC) has completed its acquisition of Brewin Dolphin Holdings, which will operate as RBC Brewin Dolphin and continue to be led by CEO Robin Beer. The deal was worth C$2.4bn (£1.6bn).
Dominion Marine has completed a management buy-out led by MD Simon Roberts and Directors Catherine Connolly, Paul Fleming and Tim Cox. Dominion Marine, based in the Isle of Man, also serves superyacht owners from Jersey and Malta.
Vistra is to buy MAS France, a provider of domiciliation, administration and directorship services in the real estate and private equity sectors. MAS France will be rebranded to Vistra France. Managing Partner Pierre Dorier and Partner Josefina Parisi will stay in the business.
IQ-EQ has acquired JGM Fund Services, a US provider of fund administration and tax services for alternative investors specialising in real estate and private equity. IQ-EQ now services US clients from 12 locations and has more than 650 staff there.
Credit Suisse has signed agreements with Bank of NT Butterfield & Son and Gasser Partner for the sale of Credit Suisse’s global trust business, Credit Suisse Trust (CST). Under separate agreements, Butterfield will acquire CST’s businesses in Guernsey, Singapore and the Bahamas, while Gasser Partner will buy CST’s Liechtenstein business. The deal with Butterfield is to close in the first half of 2023. On completion, Butterfield and Gasser Partner will take over the management and administration of most of the trust structures in the respective jurisdictions.
Apex Group is to acquire Mainspring, a UK-based provider of venture capital fund administration and accounting services.
Mainspring offers outsourced administration and accounting services to small and medium-sized venture fund managers in the UK. It also operates an FCA-regulated custody business for fund managers. The acquisition will add to Apex 70 Mainspring staff in two UK offices, as well as assets under administration of £9.7bn.
The deal is expected to complete this year. n
actions in the plan. Overall, these two documents contribute to a single National financial crime workplan
HG INVESTS IN TRUSTQUAY TrustQuay has announced that software and services investor Hg has become a majority investor in the business.
TrustQuay provides entity management, client accounting, practice management, compliance and workflow software for trust, fund and corporate service providers around the world. It operates in more than 30 jurisdictions, and has offices in Guernsey, Jersey, Luxembourg, Singapore, Australia and the UK.
Keith Hale (pictured), Executive Chairman of TrustQuay, commented: “Our mission is to automate and digitalise the trust, corporate and fund services software sector, enabling customers to transform their businesses and become more efficient.”
Hg has more than a decade of experience in fintech, investing over $1bn in more than 10 fintech businesses in the past five years.
The TrustQuay management team has said it will be business as usual while former majority owner, Silverfleet Capital, fully exits its position.
The Hg team was advised by Skadden, Arps, Slate, Meagher & Flom. The Silverfleet Capital team was advised by Eversheds Sutherland and Baird. The
TrustQuay management team was advised by K&L Gates, Jamieson and BDO.
The total net asset value of regulated funds administered in Jersey rose by almost £8bn in the first half of 2022, while the corporate and banking sectors posted record mid-year figures.
According to the most recent data from the Jersey Financial Services Commission for the period ending 30 June, the value of regulated funds under administration rose by £7.7bn (1.7%) compared with 31 December 2021 to £458bn.
Alternative asset classes –private equity, real estate and hedge funds – represented 89.5% of total funds business, with private equity and venture capital making up 44% of total funds business in Jersey. The value of hedge fund business booked in Jersey grew by 14%.
In addition, a total of 556 Jersey Private Funds (JPFs) have been registered in Jersey since the structure was launched in 2017, up 100 (22%) over the past 12 months.
Total assets under management held in JPFs –which is reported separately to the quarterly figures for regulated funds – now stands at £61.7bn, spanning private equity, venture capital, real assets and other global equities.
Meanwhile, the total value of deposits held in Jersey banks increased by £10.8bn (8%) over H1 to reach £144.4bn –the biggest half-year increase since 2019 – with 57% of deposits in Jersey banks held in foreign currencies.
Corporate activity was also strong. There were 35,447 registered companies on the register on 30 June – the highest number in the past decade – while in Q2 there were 974 corporate registrations, the highest quarterly figure on record. n
Equiom has appointed Farah Ballands as its new Chair, following full regulatory approval of Alcentra becoming the new majority owner of Equiom. Farah brings wide-ranging sector experience to the role. She most recently served as Chief Executive of Ocorian, which merged with Estera, where Farah was previously CEO, in 2020. Farah is a lawyer by training and was a Partner of international law firm Appleby, where she led the global fiduciary and administration practice from 2003 until 2015. She led the private equity backed management buyout from Appleby in 2015, which went on to become Estera.
Ocorian has promoted Michael Betley (pictured), Managing Director of the firm’s Guernsey business, to the role of Global Head of Private Clients. Michael succeeds Nick Cawley, who is moving to a newly created role in the business setting up a global private client advisory board. Michael joined Ocorian last November, when it acquired Trust Corporation International, which he founded in 2003 and led as CEO.
Earlier in his career, Michael spent more than 14 years in London and Guernsey working as a lawyer, and latterly a Partner, for Wedlake Bell. He has also served as an NED of several regulated businesses.
Sally Rochester has been named as Director of the newly launched Mourant Consulting in Guernsey. Sally brings to the role more than 20 years of regulatory and risk management experience. Her career has included three and a half years with Standard Bank Offshore, overseeing the internal audit of offshore operations across Jersey, Isle of Man and Mauritius, and almost nine years in senior roles with Deloitte in Guernsey. She has more recently served as Executive Director of Supervision for the Jersey Financial Services Commission.
Richard Cannard has been recruited as Head of Wealth Distribution for HSBC across the Channel Islands and Isle of Man. Richard has been at HSBC for more than 31 years, previously as Area Director, HSBC Expat, in which he led the UK and Europe Region. Prior to that, Richard was Head of Premier and Wealth, Channel Islands and Isle of Man. He’s also previously held responsibility for the regulated risk and transformation teams, overseeing changes in how the bank provides financial advice to customers in the islands and the UK. In his new role, Richard will be responsible for the Premier and Wealth teams across the islands.
IQ-EQ has appointed Jersey-based private client fiduciary specialist Nicola Gott as the firm’s Managing Director in Jersey. Nicola has worked in the offshore fiduciary sector for more than 13 years. She joins IQ-EQ from Oak, where she has worked since 2018, latterly as Jersey Managing Director as well as Group Chief Commercial Officer since December last year. She started her career in London in 1999 with the Halifax, then went on to serve seven years with BNP Paribas in Jersey. Prior to joining Oak, she spent two and a half years as Managing Director of Equiom in Jersey.
John Ayres has been named Managing Director of Kroll’s new office in Guernsey. John brings to the business more than 25 years in insolvency, restructuring, forensic and corporate recovery services, including contentious cross-border insolvencies, shareholder disputes, asset-tracing investigations and the realisation of complex and illiquid assets. In his previous role, for FTI Consulting in the British Virgin Islands, he was Senior Managing Director and head of the corporate finance and restructuring practice. Earlier in his career, he spent 20 years with PwC.
Jersey-based fiduciary business Forward Group has appointed Debbie Du Feu as Director. Debbie joins with 30 years of experience providing professional fiduciary services to private and corporate clients. She has most recently served as Director of Client Services for Apex Group. At the start of her career, she spent 20 years with European Financial Services in Jersey, before moving to VG as a Senior Manager. More recently, she has spent time with Ocorian as an Associate Director. She has specialised in establishing and administering complex structures for geographically diverse clients and Islamic structures.
EY London Partner Dan Saunders has relocated to Jersey to join the firm’s Channel Islands partnership. Dan has for the past seven years been UK and Ireland Assurance Market Segment Leader for Real Estate, Hospitality and Construction. He has more than 20 years’ experience with EY, working with public and private real estate companies, including three years in Sydney. Dan also has many years’ experience of working with Channel Islands businesses and REITs listed on The International Stock Exchange. He has led cross-border teams and supported clients in raising debt and equity in capital market transactions.
Walkers has promoted Sevyn Kalsi (pictured), Julia Keppe and Daniel Read to Partners in its Jersey office. Sevyn has been with the firm since 2018 as Senior Counsel, having moved offshore from the City in 2014 to Ogier. Julia has been in private practice since 2006 in London and New York, for Debevoise & Plimpton and PwC, and specialises in fund finance and complex cross-border restructurings. Advocate Daniel Read practised as a Barrister at Farrar’s Building chambers in London for five years before moving to Ogier in Jersey in 2013. He too joined Walkers four years ago.
RBS International has promoted Susan Fouquier to Managing Director of Institutional Banking, based in Guernsey. Susan joined RBSI from NatWest in 2021 as Head of Institutional Banking in Guernsey and became Head of Institutional Banking Offshore in April this year, leading teams in Gibraltar, Guernsey, Jersey and the Isle of Man. She has more than 15 years of banking experience in corporate real estate, product management, risk assurance and SMEs. Her career with RBS has included stints in Paris and Edinburgh. She has spent the past three years as a Director of NatWest Pension Trustee.
The Jersey Chamber of Commerce has appointed Adam Budworth (pictured), Managing Director of Grant Thornton Channel Islands, as its President, succeeding Jennifer Carnegie, Chief Operating Officer of Amicus. Adam has served as Honorary Treasurer of the Chamber since 2017. In addition, management consultant and retail specialist Daphne East has been appointed as Vice President of the Chamber, taking over from John Shenton. Daphne will also chair the Chamber Retail and Supply Committee. In addition, the Chamber’s newly appointed Treasurer is Tim Barnes, Chief Financial Officer at Jersey Post.
Zedra has appointed Elaine Kennedy (pictured) to Managing Director of its Guernsey Office, and Nick Slinn to Deputy MD. Elaine has more than 23 years of experience in the financial services sector, having joined Zedra in 2005 to establish the firm as a provider of employee benefit and share ownership trusts. Nick, who has more than 25 years’ experience in financial services, joined Zedra as a Director in 2019 following the acquisition of Interben Trustees, which provided trustee and administration services to multinationals to support their international pension plans.
The key is not to have all your eggs in one basket. By having a proportion of your money in cash savings, balanced with investments for longer-term growth, you can build resilience and directly tackle the impact of inflation head on.
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Whenever there is a period of uncertainty in the economy, it’s always a good idea to review your financial plans to make sure they are resilient and best suited to the circumstances.
This year has been tough on the markets. And with further inflationary pressures around every corner, a war raging in Ukraine and disrupted supply chains, what does the economic uncertainty mean for the corporate services market and investors?
AS THE TWO-YEAR pandemic began to fade there were high hopes last New Year’s Eve that 2022 might deliver some muchneeded global economic cheer.
But with inflation soaring in major economies, interest rate hikes to tackle the rise, the Russian invasion of Ukraine spiking energy prices and placing a strain on the global food supply chain, alongside zero-Covid policies hitting Chinese growth, that optimism has long since passed.
And that was all before the new UK prime minister announced – and then pegged back – an unexpected ‘mini-budget’ that spooked the markets and sent interest rates, and mortgage costs, spiralling.
Furthermore, indicators suggest the US and UK are already in or at least close to recession, sparking uncertainty and fear in the investor and corporate world.
According to the Investment Association, UK savers took £129m out of funds in July. Although this was well down on £4.5bn in June, it still marked the sixth month of net retail outflows this year.
“Some investment professionals will say financial markets are efficient and therefore can re-price themselves around economic and geopolitical uncertainty.
“Others will say markets are inefficient and therefore can be exploited to take advantage of mispriced assets,” says Tim Sanders, Senior Investment Director at TMGA Wealth Management.
“These two opposing views, combined with other macro-economic events, such as those experienced over the past 18 months, can lead to market instability and volatility – and, understandably, cause confusion and uncertainty for investors.
“Rarely do we see all asset classes, including equities and bonds, moving in the same direction. But that’s what we are experiencing at the moment – it’s certainly a difficult and unusual time.”
Sanders believes that while some investors are less comfortable than
others during times of market volatility, a disciplined investment approach provides reassurance and confidence for investors. He says: “It’s important to have that approach, supported by a strong investment framework and a long-term strategic view.”
“We’ve seen turbulence in the markets before and we’ll certainly see it again. Embracing volatility, looking for new opportunities in areas such as technology, infrastructure and ESG, which are multidecade themes, and ensuring appropriate diversification, is key.
“If you combine this with a ‘keep calm and carry on’ attitude, and ignore shortterm trends and market noise, this will deliver long-term sustainable growth.”
The trends around private equity and M&A don’t look good either. The sector had a tremendous 2021 with, according to White & Case, a global total of 8,548 deals worth $2.1tn achieved. This was double the previous record set in 2007 – and more than double 2020’s $1tn.
“There was a huge acceleration in 2020 and 2021, which seemed counterintuitive as everybody was in lockdown,” says Ed Shorrock, Director, Financial Services Compliance and Regulation at Kroll.
“But managers found that they didn’t have to jump on a plane to do a deal. Buoyed by record low interest rates and more time available, they discovered they could do deals at a more rapid pace.
“Accountants, law firms – in fact anyone involved in financial services – were the busiest they had ever been.”
However, according to EY, 2022 has been more of a struggle. PE firms announced deals valued at $486bn during the first half of 2022, representing a decline of 18% from the same period a year ago and a decline of 9% from the second half of 2021.
Firms have also struggled to raise funds, with $257bn raised to the end of June, down 15% on the same period last year. “The year 2021 was phenomenal and, really, even the first half of this year was on target to be the second greatest year in terms of numbers,” says Ogier Partner Richard Daggett, a member of the firm’s Private Equity Group.
“A lot of that was a reaction to the pandemic and finally being able to get out and start finding targets. It allowed PE houses to put to work the money raised previously. But over the past three months there has been a noticeable slowdown in terms of new buyouts. Deals are still happening but in general they have fallen away because of economic uncertainty.
“There are a lot of things going on, from the conflict in Ukraine to the energy crisis and a new UK prime minister. It’s harder to be bold and go out and make big acquisitions.”
The brakes on PE activity have come, he adds, from inflationary prices and rising interest rates, which are making it harder to finance deals.
“If you are going out and looking to acquire your target and leverage up a reasonable percentage of that then levels of borrowing are important,” Daggett says.
“It means you’ve got to find the right deal whereby perhaps you don’t need as much financing. In addition, when banks are looking to lend, they are asking a
lot more questions given the dark storm clouds on the horizon. They are doing more stress-testing on loans – what would happen if inflation goes to 13% or 14%, for example.”
PE houses are also reticent about paying over the odds for targets and are focused on getting the right valuations while sellers are also waiting for better times to exit.
Daggett says: “Trying to align prices and find a point where both parties are happy is really difficult at the moment, although there are opportunities out there, such as more inflation-friendly infrastructure assets.
“PE managers are stress-testing potential targets to see if they can ride out what is coming over the next year. They don’t want companies with a huge exposure to rate rises. PE houses are also looking at their current holdings and deciding whether they need shoring up and more investment in these times.”
PE houses may also have taken on board lessons from the frenzy of 2021.
“You have to question some of the prices that were being paid for assets,” Shorrock says. “There was such competition that there was a risk of underperforming financials or increasingly regulatory due diligence and overpaying.”
Alex Di Santo, Group Head of Private Equity at Crestbridge, agrees that due diligence is an increased focus. That’s not only general partners at an asset and valuation level, he says, but also limited partners when allocating funds to a specific PE fund manager.
Di Santo says the LPs may consolidate their allocations with well-known PE names that have a track record of delivering through a recession.
However, because of the funds that PE houses have built up in their war chests – dry powder – over the course of 2021, there is confidence that they are well placed to ride out present and future uncertainty. “PE is actually pretty well
Rarely do we see all asset classes moving in the same direction – but we’re experiencing that now
insulated,” says Shorrock. “The sector has a lot of firepower to stay invested, is more sophisticated than back in the financial crisis of 2008, and is more diversified across asset classes.
“They are also more long-term focused, which means they can bide their time until the market picks up again.”
Di Santo adds: “Investors expect PE managers to place that money and make good long-term investments in a recession. That drive is always there and as such funds will continue to be raised and get off the ground.
“There are still deals to be made at the right price in areas such as infrastructure, private credit, distressed assets at lower valuations and venture capital. It might be more challenging and will just take a little bit longer because of extra due diligence.”
Elsewhere in corporate markets, the global IPO market has fallen this year with, according to EY, global volumes dropping 46% in the first half of the year alone. SPACs activity, notably in the US,
has also dwindled in these uncertain times. “The corporate markets scene is quieter. Companies are parking IPOs as they are not going to get the prices they thought they would get even six months ago,” says Daggett. “With M&A, nobody wants to make the big moves.”
However, Matthew Allen, Senior Director, Corporate Services, at JTC, remains positive. “Our clients are still active and looking to do their best to take advantage of the current economic situation however possible,” he says.
“With real-estate clients, there is no rush to sell assets, and clients in the renewable energy space are raising additional capital.”
He adds that there is increased uncertainty around asset values where clients are looking to purchase, with the ability to raise capital varying from sector to sector.
“It seems to be more important than ever to have an investment proposition that is differentiated from others in the market. We have seen an increase in the number of joint venture structures, some of which are cross-border, in order to access capital quickly and to allow deals to be done,” Allen states. “We are leveraging our relationships with banks, legal advisers and tax advisers to help keep our clients’ deals moving forward.
“Other areas where we are seeing a requirement for additional support remain unchanged: regulatory change is one area where we are able to support our clients, providing director and governance services. This enables our clients to focus on their core business.”
Other challenges, he adds, include the ongoing cost to run structures and bank account opening, which is still a difficulty and becoming more so.
“Our main advice to clients is to continue to play to your strengths, stay close to investors and allow service providers to focus on running your structures,” Allen says.
Sanders also stresses the need for providers to enhance communications with clients during these times.
“It is crucial to give regular updates on market conditions and have face-to-face meetings with clients,” he says. “It may be an unknown future, but communication is key to providing assurance to investors in uncertain times.” n
PE is pretty well insulated, has a lot of firepower to stay invested and is more sophisticated than in the financial crisis of 2008
GUERNSEY’S INSOLVENCY LAW regime is due to be updated and revised by the Companies (Guernsey) Law, 2008 (Insolvency) (Amendment) Ordinance 2020, passed on 15 January 2020, which is anticipated will come into operation in the latter part of 2022.
The Insolvency Rules have been developed by the Insolvency Rules Committee (IRC), of which Ogier Partner Alex Horsbrugh-Porter is a member, with a view to addressing some of the deficiencies with the current insolvency regime.
The rules provide background and context to the changes within the Ordinance and provide insolvency practitioners and industry-related parties with guidance on their practical application, addressing the following topics.
Meetings of creditors and shareholders will now be governed by sections 386A, 398A and 399 of the Ordinance. These detail the applicable provisions relating to such meetings, requiring liquidators to call initial meetings of creditors and send explanation to creditors of the aims and likely process of the administration.
The Ordinance specifically gives the IRC the power to make regulations in respect of these meetings.
During the course of a winding up, where a liquidator becomes aware that the company does not in fact satisfy the solvency test, pursuant to section 398A of the Ordinance, the liquidator will be required to convene a creditors meeting.
Section 398B addresses the scenario where a declaration of solvency has not been made and liquidators are required to convene a meeting of creditors, unless they are satisfied that there will be no distribution to creditors.
The Ordinance also inserts provisions prior to dissolution of a company, where a final meeting of shareholders is called but no quorum is present.
The draft Insolvency Rules cover the following:
• The requirement for a meeting to be held and specific circumstances when the requirement can be dispensed
• Convening creditor meetings and general meetings including timeframes
• Notice of creditor meetings and content of notices
• Location, quorum, chairing, voting at creditor meetings
• Suspension and adjournment of creditor meetings
• Proxies (including a standard form)
• Minutes
• Electronic communication regarding creditor meetings.
Under the Ordinance (sections 387A and 421E), administrators and liquidators will have a duty to report to the Guernsey Registry and, in the case of regulated entities, to the Guernsey Financial Services Commission, if it is considered there may be grounds for a disqualification order.
The draft Insolvency Rule will provide full information on the detail and format of the report, as well as introducing standard form reports.
Section 391A of the Ordinance requires directors to make a declaration of solvency.
If a declaration of solvency is not made, the Ordinance requires that an independent liquidator is appointed (not a director or former director of that company). The liquidator will be required (subject to certain exceptions) to report to creditors and hold a creditor meeting.
These amendments ensure that liquidators of insolvent companies are
independent and will be required to investigate the cause(s) of insolvency actions of company officers and ensure liquidators of insolvent companies communicate adequately with creditors.
The draft Insolvency Rule will cover the format of the declaration of solvency in standard form. It is also proposed that the definition of ‘solvency’ is consistent with section 527 of the Companies (Guernsey) Law, 2008
New provisions within the Ordinance provide liquidators with the power to disclaim onerous property, even though they may have exercised rights of ownership over the property – for example, by taking possession or endeavouring to sell it.
The amendments proposed by the IRC preserve existing contractual rights relating to: (i) close-out netting (ii) set-off or (iii) compensation – and any rights of enforcement are also unaffected.
The draft Insolvency Rule will address: (i) the terms of the notice of disclaimer (ii) details of a non-effective notice of disclaimer to interested persons for information and (iii) those circumstances when a notice of disclaimer is presumed valid and effective.
The proposed Insolvency Rules will be a welcome addition to the operation of the Guernsey corporate insolvency regime. They will assist insolvency practitioners and lawyers by creating certainty and predictability within the existing framework to the benefit of creditors and stakeholders, reducing costs to assist with increasing returns for creditors. n
Alex Horsbrugh-Porter advised on the amendments both as a member of the Insolvency Rules Committee and as a member of the Legal and Regulatory committee of ARIES, the pan-Channel Islands industry body.
Ogier Partner Alex Horsbrugh-Porter (pictured), Senior Associate Michael Rogers and Associate Chloe Gill set out all you need to know about the new Guernsey Insolvency Rules
Building a business succession or exit strategy can be one of an entrepreneur’s best investments. But in practice, traditional succession approaches can be complex. Joe Peacock, Client Advisor at UBS Global Wealth Management in Jersey, discusses why talking and communication are critical to a successful business sale or transfer, based on extensive experience working with entrepreneurs
IN THE SECOND quarter of 2022, a UBS Investor Watch survey found that 37% of investors were highly concerned about the value of the assets they’d pass on to future generations.
Succession and exit often depend not just on business value, but also on financial wealth and its ability to support the founder’s and their family’s lifestyles.
Current economic and market uncertainty, particularly around the path for inflation, may make entrepreneurs more worried about their next steps.
Building a business succession or exit strategy can be one of an entrepreneur’s best investments. But in practice, traditional succession approaches can be complex, and this is the reason why talk and communication are critical to success.
Family involvement can be a business’s biggest strength, but also its greatest weakness. Numerous studies show that family businesses tend to outperform listed peers. A UBS CIO analysis of the public family firms from the 500 largest public and private ones (where the family owns at least 32% of the shares and voting rights) indicates they generated consistent highsingle-digit excess return versus global equities between 2000 and 2021 while growing earnings 370% versus 290% growth for developed market equities.
Potential reasons include their long-term focus on revenue growth and profitability, lower-risk funding structures, and greater investment in research and development.
But the theory that families work for their collective good is not universally borne out in practice.
One study found that 85% of family businesses are not passed down to the next generation because there has been too little planning for defusing family disputes, or for preparing successors to become successful owners and managers. Some of the key challenges are:
1) A lack of transparency around decision-making
2) An inability of prior generations to cede control to the next generation
3) An over-reliance on formal documents such as wills, trusts and expressions of wishes, whose contents may only come to light after an emotive family event such as death or incapacity.
Talking can help resolve reservations about passing a business to family members.
A 2018 UBS Investor Watch survey found that 57% of business owners were reluctant to retire and pass on their company because they were concerned family members would take the business in a different direction or sell it outside the family.
One conversation at a specific moment in time cannot address all the operational issues confronting an ever-changing business. Nor can a single discussion account for a family’s evolving financial needs or personal circumstances.
Ongoing communication also encourages the following generations to seek the counsel of family and trusted advisors (who can offer a wealth of experience and institutional knowledge) rather than look for answers elsewhere.
Tools to build effective communication include forming an independent board of directors or drawing up a formal family constitution.
Families, employees and stakeholders frequently rely on a firm for their livelihoods, so it can be vital for founders to communicate how their exit plans tie to financial resilience.
Business owners who are accustomed to holding most of their money in a firm they control may not have the
Key tools include forming an independent board of directors or drawing up a formal family constitution
Corporate change is inevitable following a sale or succession. But business owners can prepare all parties by anticipating the extent and communicating early to minimise risks of key personnel loss or erosion of corporate culture.
Conversations can clarify how the nature of the change will impact employees and uncover ways to keep the workforce engaged and productive after the handover.
If business owners are preparing for liquidation, trusted advisors with corporate finance and wealth planning experience can discuss how to separate personal and commercial assets. This crucial step can reduce the risk of creditor claims that reach beyond the scope of the business.
And preparatory conversations with lawyers to set up a power of attorney or expression of wishes can smooth decisionmaking if a liquidation becomes necessary due to incapacity.
skills or experience to become wealth managers. Managing a concentrated stock position comes with familiar risks but may jeopardise entrepreneurs’ financial wellbeing over the long term.
And challenges during a business sale or exit may show how entrepreneurs’ personal and commercial finances are insufficiently protected against potential risks (whether inflation, litigation or the loss of a key employee).
Trusted advisors can help business owners through this transition and guide them on how to manage their single stock position, build financial resilience and even devise asset protection strategies for peace of mind.
One of the most common – and potentially most destructive – challenges is how to distribute inheritance fairly.
It may seem ‘fair’ to split a family’s total wealth equally. But diluting business ownership across multiple generations, including those with no operational role, could lead to inefficient decisionmaking that maximises personal gain over commercial profitability.
Some family members may need more short-term liquidity than others, so an ‘equitable’ approach – seeking to distribute resources based on each family member’s requirements – may be another approach that should be considered.
Family constitutions or mission statements are also useful additional tools to empower business managers and family members with objective guidance in a potentially emotional liquidation scenario. n
Whether you’re looking for trusted advisors to guide a sale or succession conversation or to connect with peers who have already walked the path, please contact Joseph Peacock for more information.
Joseph Peacock, Client Advisor, UBS Global Wealth Management in Jersey 1, IFC St Helier, Jersey JE2 3BX 01534 701143 joseph.peacock@ubs.com
You can also read the full report here: https://bit.ly/its_time_to_talk
UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, funds and investment business. © UBS 2022. All rights reserved.
Direct indexing has taken off in the US, where it is now embraced as a tax-efficient and highly bespoke way of building an investment portfolio. Will the Channel Islands follow?
Words: Steve FallaTHERE’S AN INVESTMENT concept that’s been recognised for more than 30 years in the US and is continuing to gain traction there. It’s now travelled across the pond to the British Isles, where it’s expected to generate significant interest from investment professionals and their clients.
So what is it? And will it be the next big disruptor for Channel Islands firms?
Direct indexing, also known as personalised indexing, is technology driven and uses software to enable investors to replicate an index that will produce various benefits. Its customised nature means that the stocks selected can reflect the personal values of the investor – and allow the taxefficient harvesting of losses.
Once the custom strategy has been designed, optimisation runs in the background to determine the portfolio of stocks the investor should own. And, with its relatively low entry level, some practitioners predict that direct indexing will result in the near obsolescence of mutual funds and ETFs over the next decade.
While still nascent in Europe, banks are exploring how their clients might take advantage of this highly personalised investment process.
David Storm, Chief Investment Officer for the British Isles and Asia at RBC Wealth Management, is one of those who recognises the potential of the approach.
“In North America, it’s one of the fastest growing areas in asset management for wealth managers and private banks. In Europe, it’s still incredibly early – but a number of banks are looking at it seriously.
“It is the ability to build the client investment index [that is appealing]. The Holy Grail that most wealth managers are looking for is the ability to offer highly personalised solutions at very efficient costs that can align to individual client values and goals in a number of different ways. It’s systematic, so it’s cheaper. There can also be a layer of tax efficiency.”
With sustainability high on the world’s agenda, there’s an increasing trend for people to care about seeing their personal values, whether social or environmental, reflected in their investments – another driver of the appeal of direct indexing.
And there is a growing segment of independent-minded ‘DIY’ investors who may gravitate to direct indexing platforms to implement their own investing ideas more efficiently.
The portfolio can include exclusionary criteria – carbon emissions, weapons, pesticides or the testing of products on animals, for example – or have inclusionary preferences, overweighting companies with a higher proportion of board diversity or women in leadership. Such a combination may not have been possible through offthe-shelf funds.
“Direct indexing is attractive where a client has specific exposure needs that can’t be met by pooled products. Those are becoming smarter to some extent, but if you’ve had a conversation with anybody around ESG, you quickly realise that it means very different things to different people, particularly when you take that into the realms of what people think about sustainable investing,” Storm explains.
“At the moment there are probably 150 different equity ESG indices I can buy and I have to sift through them to try to find one that meets the investor’s needs; or go through a client discovery process answering questions around the actual things the investor is interested in having in a portfolio or not having in a portfolio.
“The level of customisation offered by direct indexing is definitely a step change that you are not going to get by just buying an ETF.”
In terms of cost, Storm says direct indexing falls somewhere between relatively cheap ETFs/ETF portfolios and active management, which typically costs two to three times more.
While institutional investors and family offices have been using a version of direct indexing for some time and it is perhaps best suited to high-net-worth investors, the entry level is surprisingly low.
“It depends what your definition of ‘high net worth’ is. For some banks that might be £2m; for others £150,000 upwards. I would say direct indexing is likely to be available for clients with around £100,000 investible,” Storm says.
Direct indexing also adds a further string to the bow of investment advisers. The strategy may attract intermediaries serving young, affluent clients who appreciate the ability to express their individual values through portfolio construction, or advisers who want to differentiate their businesses by emphasising a focus on tax management.
Arguably, an adviser should gain an increased understanding of what the investor really wants to achieve through an increased level of client discovery and understanding, which can lead to a better outcome and the building of a better index with a richer layer of personalisation.
The tax regulations in the British Isles are simpler than in some European countries and, for taxable investors, direct indexing can offer an element of tax efficiency through tax loss harvesting that will benefit high- or ultra-high-net-worth individuals the most.
As Storm explains: “Tax loss realisation in this market environment is a very
real problem – and managers should be acting right now.
“With a traditional client portfolio, if we have bought equities at the start of this year and equity markets are down 20% so we sell, we book a capital loss for that amount.
“The flip side of that is there may be something we bought that is up 50% and if we go to sell that we are going to realise a capital gain.
“The ideal tax-efficient portfolio is where you can offset capital losses with capital gains to be as sensible as possible with how you are managing the tax angle of the portfolio.
“Direct indexing does that on a more systematic basis, so if you own 100 stocks and you are trying to replicate a different index you can, over the course of a year, be buying and selling different stocks in a way where you are trying to harvest capital losses to offset capital gains that you have elsewhere in the portfolio – so your net after-tax return should be improved.”
Storm believes there’s a regulatory tailwind behind the concept. “I think the tax authorities would support direct indexing because of its transparency,” he says.
Another use for direct indexing is successfully transitioning out of a portfolio, he adds. “Where a client has a large existing position and where tax impact or other restrictions mean they cannot sell out, they must slowly transition out of it.
“That lends itself to portfolios where clients own a number of single equities. It’s quite useful as a client transitions a portfolio across.”
An example would be where a senior executive of a publicly traded company may have generated wealth through equity compensation. By using direct indexing, he or she can diversify their concentration risk by slowly exiting a highly appreciated or concentrated equity position.
Storm foresees nothing but growth in the interest in and use of direct indexing by the investment community.
“It’s something that is coming to this shore and, over the next few years, will see the same exponential growth that it’s seen in North America.
“Does that really open it up for mass retail? Not quite yet. But I think it’s on the way because, at its heart, it’s a bit of software, it’s a technology-driven investment solution and so you can keep tweaking and tweaking.
“If you think about the evolution of most investment solutions, they tend to become more and more available to the lower-entry level as time goes on.
“But I think this is starting at a reasonable level, so intense customisation from around £100,000 – which is where we think the industry will probably land –is quite an attractive proposition.” n
The customisation offered by direct indexing is a step change that you are not going to get by just buying an ETF
SO MUCH HAS been written about diversity on boards through the lens of gender equality and it’s very encouraging to see good progress being made. Few would argue against gender diversity on boards and the benefits it brings to both those boards and the organisations they lead. That said, focusing on diversity through any one lens alone is too narrow and risks not fully realising the true power of diversity to the board and, by extension, to the organisation and its stakeholders.
Diversity can have different meanings to different people. The Oxford Dictionary defines the word as “a range of many people or things that are very different from each other”. So, what does being ‘very different from each other’ mean in the context of a board?
At its very core, a board must have a diversity of skills and expertise such as finance, HR, compliance and industry knowledge to collectively discharge its responsibilities. Secondly, a board needs to be able to engage authentically with its key stakeholders, particularly clients, employees and shareholders. Therefore, it’s important that the demographics of the board such as gender, ethnicity and age reflect the demographics of its stakeholders, in order to better serve their needs.
Relevant examples in the wealth management industry are the rising wealth of women and the transfer of wealth to the next generation. A board and senior management team with an understanding of these groups can lead and give direction to the business with greater clarity and are more likely to engage stakeholders in an impactful and respectful way. So, as well as ensuring difference of skills and expertise, demographic diversity of the board is equally important.
There is another powerful but less tangible aspect of board effectiveness and that is cognitive diversity, or put another way, a board with a variety of thinking styles.
There is a natural human tendency to seek out information or facts in a way that supports our own beliefs and opinions. Interacting with like-minded people can reinforce this ‘confirmation bias’.
Cognitive diversity can be achieved by appointing directors with different life and career experiences as well as different backgrounds. This helps shape individual attitudes, preferences and approach to analysing and decision making. Directors who individually offer different perspectives in relation to organisational matters promote objective and constructive dialogue.
Without cognitive diversity, there is a risk of ‘dominant influence’ or ‘groupthink’, which may lead to complacency, frustration and blind spots, and ultimately judgement error and ineffective stewardship.
It is of course easy to write about board diversity and its benefits. However, in reality there can be challenges to overcome, both practically and culturally.
At a practical level, small businesses and businesses in specialised sectors with limited available talent pools can find it difficult to achieve diversity. Equally, some boards may lack awareness or find it difficult to prioritise if they are preoccupied with operational matters.
Indeed, in exceptional cases, an organisation may need a specific board composition at a point in time to steer the business through particular circumstances.
Diversity alone is not enough – it must be supported by an inclusive board culture where all directors feel secure to voice contrary opinions and perspectives without the risk of fellow directors feeling threatened. Achieving this level of trust amongst a diverse set of board members takes time and commitment.
Diversity, in all its dimensions, should be firmly on the agenda of every board, with an ongoing commitment to achieving meaningful progress.
With this in mind, a board should regularly evaluate the following. Firstly, at its core, does it have the right skills and expertise to discharge its responsibilities? Then, does it authentically weave diversity into its composition by reflecting the demographics of its key stakeholders; does it benefit from different thinking styles; and does it promote an inclusive culture to allow voices to be heard and viewpoints to be constructively challenged?
Only through this regular evaluation and commitment can a board truly harness the power of diversity to the benefit of all its stakeholders. n
Norma O’Sullivan is the Managing Director at TMGA Wealth Management – an independent and dynamic wealth management business which delivers investment management solutions via its flagship Discretionary Portfolio Management service.
Norma has over 30 years’ experience in the financial services industry, across private wealth, corporate services and fund services sectors. Norma is a qualified Chartered Governance Professional.
To find out how TMGA Wealth Management can support you, please contact our Senior Investment Directors:
Email: michael.caetano@tmgawealth.com tim.sanders@tmgawealth.com greg.powell@tmgawealth.com
Tel: (0)1534 748740
tmgawealth.com
TMGA Wealth Management Limited (Registered Number: 132402) is authorised and regulated in Jersey by the Jersey Financial Services Commission for the conduct of Investment Business. Please note the value of investments and the income derived from them may fluctuate from time to time.
Norma O’Sullivan, Managing Director of TMGA Wealth Management, explores different dimensions of board diversity, the role it plays in ensuring a healthy board culture and the benefits that this can bring to an organisation
Christian Cole, Head of Equity Strategy at Dominion Funds, on why investors cannot afford to miss out on the biggest long-term opportunity in financial markets
WHICH LONG-TERM investment opportunity today offers investors the most consistent upside over the next 10 years? Is it crypto? What about real estate? We would argue that there is an opportunity available to investors today offering a stronger long-term performance opportunity than any other asset class, and by a long way.
We are living in an ever-changing world. But although this creates hurdles and risks for investors, it also offers great long-term investment opportunities for the patient investor.
At Dominion, we believe a focused approach to investing in long-term structural growth trends driving change in our world offers investors a unique, industry-leading investment opportunity, giving portfolios an exposure to the longterm upside from structural change.
At Dominion, we identify the major sources of change in the global economy over the coming years and decades. We
specialise in investing in the companies driving these changes.
And this is not limited to just one or two major themes. New and emerging technologies, changes in social habits, industrialisation, urbanisation… The number of themes available to invest in as sources of structural growth is high.
Through our investment funds at Dominion, we offer investors exposure to all these major sources of change in the world today, and generate returns based on that change.
Our approach, which differs from the majority of fund managers, means we are not constrained to one geographic region, currency or industry sector. Instead we are free to look for trends that are occurring at a global level and which offer the best long-term investment opportunities.
This philosophy has led us to the creation of a range of investment funds that are unusual, interesting and, importantly in this rapidly changing world, flexible.
internet, driving trillions of dollars of digital business.
The way in which humanity grows, transports and consumes its food is changing dramatically, driven by rising demand and urbanisation.
New healthcare technology is allowing all humans to live longer and more fulfilling lives, generating long-term growth in investment into healthcare services, and research and development.
These are just a few examples of the monumental changes under way in the global economy. We firmly believe that all investors should have access to investment tools that give them and their portfolios exposure to these major sources of structural growth.
As the world continues to change, so does the investment focus of our funds at Dominion – adjusting our exposures to be invested in the most important sources of change for the world. This ‘future proofs’ the funds and allows us to invest in the global trends of the future as and when they arise.
we are are free to look for trends at a global level
These long-term structural themes, which we call global trends, are reshaping our world – and we believe that all investor portfolios should have exposure to these themes.
Missing out on this exposure deprives investors of a critical long-term investment exposure to sustainable growth.
There are two million electric cars on the road today, and by 2030 there will be 200 million – a 100 times increase in market size.
Climate change requires trillions of dollars of investment in low- and zerocarbon energy infrastructure, energy efficiency and new technologies to supply current and future energy needs in a sustainable way.
The global increase in demand for water, driven by one billion extra people living in cities, will drive an increase of 50% in water demand, increasing demand for safe water infrastructure.
By 2025 there will be 4.5 billion people and 75 billion devices connected to the
The investment team at Dominion is structured to bring expertise and experience from different sectors together to create breadth and depth of knowledge. With more than 100 years of combined investment experience, the team is often years ahead of the market in identifying structural themes and successful investment strategies driven by global trends.
We continue to use innovative thinking and research methods so that we can generate investment ideas and new fund products that will stand the test of time for our investors. n
We create and manage a range of investment products, which are both highly effective, simple to understand and achieve great results for our investors.
For more information about our investment strategies and how to invest with us, email us at contact@dominion-funds.com or visit our website: https://dominion-funds. com/contact/
PLENTY HAS BEEN written in the past two years about how the pandemic accelerated digital banking and changed our relationship with technology – both as individuals and as businesses.
In the world of banking and finance, emerging technologies are changing the way we work and changing customer experiences – and largely for the better.
Near real-time payments and seamless banking are good examples of where traditional financial institutions and fintechs are coming together to create a better experience. But, as more and more technology emerges, how can we ensure the various new technologies, APIs and platforms work together to enhance opportunities rather than creating barriers?
Ankit Shah, Head of Digital Banking at Apex Group, argues that technological disruption and the increasing trend towards becoming more digital is both an opportunity and a threat for the operations of asset managers.
“The investment of time and resources into technology is no longer a ‘nice to have’. It is essential and must be fully integrated in to the day-to-day structure and functioning of organisations and customer experiences,” he says.
“The financial services businesses that are effectively leveraging technology are achieving greater efficiency, improved client experience and delivering competitive advantage.
“The use of new technologies and improving of user experiences is being driven by customer demand and maintaining the balance between use of technology, associated barriers and managing customer expectation and
demand is a balancing act for businesses –especially in banking.”
It is fair to say that Covid-19 drove the banking sector to rapidly accelerate its digitalisation plans, joining forces with third parties to deliver services to customers as quickly as possible. The pandemic was a catalyst for the consumer trend towards digital banking, forcing branches to close amid lockdown and social distancing measures.
However, as Shah points out, the lines between professional and personal lives blurred, too, as millions of people were forced to work from home – and flexible working is likely to remain the norm for many.
“Consumers are not just expecting digital access to their personal bank accounts, but are asking why the same can’t be true for their business banking.”
In collaboration with fintechs and specialist providers, banks have found themselves able to deliver new digitally accessible solutions to meet the needs of their business customers.
Ben Sykes, Director, Global Liquidity and Cash Management at HSBC, agrees that the pandemic accelerated digital banking – and he sees this developing even further in the coming years.
“The pivot towards e-commerce was clearly evident during the pandemic. The e-commerce journey now needs to be a slick one for all businesses, not just retail ones. We will increasingly see the payment embedded in the process. As an example, think of Uber. At the end of the journey, you don’t have to say: ‘I need to pay now’; you just trust that the payment has been made.”
The landscape has also changed with regards to how tech is placed at the forefront ▼
While the rapid rise of technology in financial services has delivered plenty of advantages – from real-time payments to more rapid customer service – is there a risk that too many fragmented systems could create barriers rather than benefits?
of the business. As Sykes explains, IT is increasingly influencing business decisions. “Historically, it has been the CFO who has called the shots; but the CTO is really influencing the decisions now.”
He adds that a key trend currently is the use of APIs (application programming interfaces), which allow computer programs to communicate with each other.
“APIs are now available at much lower cost to clients,” he says. “There is an increased understanding of how APIs can benefit a business in terms of speed in accessing data – whether that be payment or account information. This can really help decision-making.”
Of course, one of the problems with improved connection is standardisation –specifically lack of it.
As Oswald Lopes, Vice President (Digital Engineering Services) at Kiya.ai, emphasises: “Metaverse banking – or virtual banking – offers huge flexibility, but there are potential obstacles.
“What if one Metaverse cannot talk to another Metaverse? Metaverse is a relatively recent thing and there were no standards when it came on the scene. Institutions have since come together to form a standards forum, which is a positive thing. And there is clearly an incentive for everyone to be on a common exchange pathway.”
Shah believes that joined-up thinking in the sector is important. “With appropriate integration, technology will improve the client experience and bring efficiencies in cost/processes within banks. It is the role of business leaders to carefully identify technology gaps and opportunities, and to choose the right technology partnerships in order to deliver this.”
He concludes that, to maintain profitability as well as competitive advantage, banks will need to make critical decisions about how they source, develop and deploy technology solutions.
We have talked about players jostling for position in a digital landscape. So, in the new climate, is there a chance that the fintechs will take over – or do they need the traditional financial services organisations’ scale and capabilities?
Shah insists that fintechs and traditional financial organisations have their own niche in the market and their co-existence is key for success – it is not a question of one triumphing over the other.
“Characteristics such as the agility and innovation drive of fintechs, combined with scale and broader capabilities of established financial organisations can deliver great results for customers,” he says.
Lopes takes a similar line: “Fintechs need to collaborate – anyone who thinks they can build all these things themselves will fail.” n
Historically, it’s been the chief financial officer who has called the shots, but the chief technology officer is really influencing the decisions now
While the rapid shift among financial services firms to digital channels has the potential to erode trust as human interactions decrease, research by Accenture suggests that the opportunity it provides for a more personal approach, in addition to value for money, is appealing to consumers.
Shah explains that the successful banks of today have moved away from pushing products through traditional sales methods and marketplaces. Customer expectations have changed – people are focused on costs and convenience, but they also want products designed around their needs and they want a better level of service.
Technology is the key enabler. Lopes accepts the fact that a cost-of-living crisis might in some quarters advocate a preference for face-to-face banking, but he also believes most people will be reassured sufficiently via digital channels.
“We will have faster broadband soon, and with 5G, everyone will be more connected. People are far more confident around tech now and understand its speed and reliability.”
The pace of technological innovation in blockchain, AI and distributed ledger technology (DLT) means that banking is likely to get even more sophisticated in the years ahead. Shah suggests that new developments
will have a profound effect in particular on how businesses bank in the future.
He points out that blockchain and DLT will offer limitless opportunities, from financial transactions to automated contractual agreements, particularly as it removes the need for authentication.
Blockchain technology is already revolutionising the speed and volume at which transactions can be processed by banks – and will only continue to enhance these capabilities. Advances in AI will particularly aid risk mitigation and management, helping to spot and defend against fraud and cyber-attacks.
And what of the crypto space? Lopes believes there will be something of a shakeout in the crypto universe, with those currencies backed by governments having by far the best chances of surviving.
He does not see Bitcoin becoming a replacement reserve currency for the US dollar, but he does envisage more countries adopting central bank digital currencies (CBDCs). The benefits of a blockchain-based CBDC include improved payment efficiency, lower transaction costs and enhanced security.
“The Bahamas has launched a CBDC and India plans to do so, too”, Lopes adds. “The developed world may be slower in backing CBDCs, but they will likely follow.” n
With 5G, everyone will be more connected. People are far more confident around tech now and understand its speed and reliability
AS EUROPE FALLS deeper into an energy crisis, governments and central banks are facing a dangerous combination of slowing economic growth and runaway inflation.
The UK and the EU recorded the highest level of headline inflation in 40 years, with year-on-year UK inflation at 10.1% and 8.9% in Europe during July. Inflation is expected to continue to increase, primarily driven by higher energy prices – UK energy prices are expected to rise by 80% and an average of 40% across Europe.
Since the invasion of Ukraine, the Kremlin has responded to sanctions by utilising gas exports. Russia supplies Europe with 40% of its natural gas and 4% to the UK.
Gazprom, the Russian state-owned energy corporation, began reducing the flow of gas through the Nord Stream 1 pipeline before announcing an indefinite shutdown. As traders and utilities struggle to secure gas supplies ahead of winter, the European gas benchmark is 30 times higher than two years ago, peaking at around €340 per megawatt.
Natural gas is an important part of daily life. It is used for cooking and heating and is the main fossil fuel used to run power stations that provide electricity to homes and businesses.
Governments are exploring various methods of reducing the burden of rising energy prices on the consumer through energy caps but undoubtedly, living standards will decrease and household savings will be depleted.
The surge in energy prices is likely to keep inflation higher for longer and have countries seeking alternatives to gas.
The disruption of energy markets has demonstrated that countries need to focus on becoming self-sustainable. The UK electricity network is connected to France, the Netherlands and Ireland through undersea interconnectors, and
electricity can be imported and exported when it is most economical.
Energy security is a priority for governments and with the progression seen in renewable infrastructure, the transition to self-sustainability is only possible with continued investment and government spending.
In addition to this, we must consider our transition to a low-carbon economy. The UK has ambitions to be net zero by 2050 and the government has set energy providers a target to generate 100% zero-carbon electricity by 2035.
The burning of fossil fuels remains one of the largest generators of electricity in the UK and the EU, providing approximately 40% of power generated, so we recognise that more investment is required in areas that will help us meet these clean energy goals.
Many are looking to generating power through fission as a solution. Nuclear power generates around 16% of the UK electrical supply and 25% in Europe. Nuclear power remains one of the most reliable, low-carbon energy sources available but as older nuclear plants are retired, it is necessary for new nuclear stations to be built.
EDF Energy is constructing a new European Pressurised Reactor at Hinkley Point C in the UK, with plans for another two new power stations. Germany is also turning back to nuclear power to shore up its energy security by temporarily halting the phasing out of two nuclear power plants.
With the increased demand for energy, companies providing energy storage solutions have been defensive against market volatility.
Energy storage addresses supply-demand imbalances on the electrical grid and allows companies to generate multiple revenue sources through the storage and brokering of electricity. As well as being relatively stable, they can also generate predictable cash flow, which is paid back to investors via dividends.
Infrastructure funds have also proved to be a haven, investing in diversified infrastructure assets and benefiting from long-term contracts, which often have government backing.
The increased investment in renewable infrastructure generates stable and sustainable returns that contribute toward a net-zero carbon future.
Rolls Royce’s Small Modular Reactors (SMR) has developed the reactor that is designed to deliver low-cost clean energy, using proven and commercially available technology.
The fully integrated, factory-built nuclear power plant will be approximately one-tenth of the size of a conventional nuclear generation site and able to generate up to 440MW, capable of powering approximately one million homes.
As Rolls Royce has shown, these challenges and global shifts create exciting investment opportunities.
There are innovative companies trying to solve some of the world’s greatest challenges, including our transition to clean energy. We believe that there are incredible investment opportunities along the energy value chain from the energy producers, distributors and those providing storage solutions. n
Ravenscroft is an independently owned investment services group that has £8.76bn of assets under administration for private and institutional clients from around the world. We have offices in Jersey, Guernsey, Bishop’s Stortford, Peterborough and the Isle of Man. If you have any questions about investing, our team in Jersey can be contacted on 01534 722051 or email info@ravenscroftgroup.com.
The value of investments and the income derived from them may go down as well as up and you may not receive back all the money that you invested. Any information relating to past performance of an investment service is not a guide to future performance.
FINANCIAL
Charles Carpenter, Investment Advisor at Ravenscroft, explores how the response to the mounting energy crisis could offer opportunities for investors
With energy supply hugely disrupted by the conflict in Ukraine and prices on the rise, plans are afoot to move the Channel Islands to alternative energy sources – but hurdles remain
OCTOBER 2022 MARKED a significant milestone in the cost of energy crisis – with UK consumers experiencing a 40% increase in the price of gas and a 20% hike in the cost of electricity.
Since 2019, global price insecurity, geopolitical impacts, mismatches in supply and demand, and the implementation of Brexit have put pressure on European and global energy markets affecting prices and security of supply.
This unstable environment has since been exacerbated by Russia’s invasion of Ukraine, leaving global policymakers clamouring for alternatives to imported fossil fuels to meet their energy needs.
This May, the Jersey government approved a Carbon Neutral Roadmap, which it describes as a “bold and ambitious commitment to respond to the climate emergency and to aim to be carbon-neutral by 2030”. This means introducing a 68% reduction in emissions compared with the 1990 baseline by 2030, a further reduction to 78% from baseline by 2035, and netzero emissions by 2050.
The focus is primarily on reducing emissions from transport, which is Jersey’s biggest source of pollution, followed by reducing the dependence on fossil fuels in the built environment.
Deputy John Young, Jersey’s Minister for the Environment, says: “We are not sheltered from the significant global and geopolitical events that have shaped our journey so far and will need to continue to adapt over the coming years as the roadmap is implemented.”
While Jersey has been given the green light to push forward with its climate change plans, Guernsey is still waiting for similar approval.
Despite preceding Jersey with its own roadmap to carbon-neutral, agreed at last November’s COP26 summit, Guernsey is yet to reach agreement with the UK government on the extension of the
Paris climate agreement to the island. Alex Herschel, Managing Director of Guernsey Energy and Chief Sustainability Officer of Islands Energy Group, says: “The government in Guernsey is going through consultation, looking at its revised electricity strategy. They are asking the energy providers and various energy related stakeholders and asking what the future should look like and how we are going to achieve what we need to do.”
For the Channel Islands to be successful in the transition to net zero, policymakers have identified the need to switch to a range of sustainable energy sources such as wave, tidal and biofuels, preferably generated domestically.
Patrick Thomas, Head of ESG Portfolio Management at wealth manager Canaccord, says: “The cost of renewable energy has come down substantially, while the equivalent price of fossil fuels is much
more volatile. There are also national security implications of being reliant on other parts of the world for fossil fuels.”
He says the Channel Islands are ideally placed to deliver tidal, wave and solar energy, adding that while the infrastructure is not yet there to meet demand, there is potential to do so.
“The islands have the geography to make quite a lot of progress. The best barometer for clean energy is the UK, which has made big moves forward over the past 15 years,” Thomas says.
Yet switching from traditional energy sources means serious upheaval for established providers and industries.
Deputy Jess Perchard, Jersey’s Assistant Minister for the Environment, says: “We are committed to ensuring a just transition throughout the decarbonisation of our economy. The interests of future generations, and those currently reliant on polluting industries for employment, will continue to be considered.
“Neither group should be actively disadvantaged by being left to live with the impacts of inaction now or to bear a disproportionate burden of the costs to mitigate and adapt to climate change.”
Jersey’s government has set up a Climate Emergency Fund, which ringfences money to “help rebalance economic realities” –such as those created during the energy crisis – which means money for climate change is protected when other pressing priorities emerge.
“Without this investment, at best, only the wealthy will be able to decarbonise their lifestyles and businesses; at worst our attempts to reduce our emissions will stall,” the Jersey administration says.
At the same time as creating economic challenges, the transition to net zero creates opportunities. The Government of Jersey has said it will establish research and
Jersey has set up a Climate Emergency Fund, which ringfences money to ‘help rebalance economic realities’
advisory partnerships with energy systems experts. It will also explore opportunities to trial new and emerging energy solutions in Jersey, and work with the Energy Forum to solicit decarbonisation transition plans and market insights from all current island energy providers.
Jersey will also appoint a ministerial portfolio for energy and climate change.
While there are obvious commercial openings for renewable energy providers and companies involved in building the
Given the amount of coastline in the Channel Islands – well over 100km – they would seem the obvious place to set up tidal power plants.
However, the islands are yet to deliver much in the way of renewable hydropower, and the tidal energy they use is entirely imported.
According to Jersey Electric, in 2019/20, 36% of the island’s imported electricity was from EDF’s tidal power plant on the estuary of the Rance River in Brittany.
The reason the island imports energy from France is cost.
Jersey Electric estimates the cost of developing and producing power from its waters to be currently around four to five times higher than the price at which it imports from France. The company says: “The reason is that it is costly to build
infrastructure, Thomas says there are fewer obvious potential winners in a carbon-neutral world. As he explains: “It’s less about the utilities and more about the technology that will make renewable energy more efficient.
“It is similar to the digital revolution, which spawned new ways of living and working and in turn created huge, multifaceted business opportunities. The same will apply to the transition to clean and renewable energy sources.”
While Guernsey conducts its energy consultation, Jersey says it will work with
its ‘sister islands’ to examine the options for utility scale renewable energy generation, to ensure a diverse, safe and resilient supply of energy to meet the island’s future needs.
This collaboration has left Herschel feeling optimistic about a successful transition to net zero.
“The islands are the perfect testbed for collaboration because we are all here and going through it together. I don’t have a crystal ball, but I do think Guernsey’s energy plan will be in place by the end of the year and then we can really start making progress.” n
tidal farms. They are new and risky for developers, who price that in. For sure, these facilities can be built; however, retail prices in Jersey would have to go up significantly to pay for them.”
Not to be deterred, Alex Herschel, Managing Director of Guernsey Energy and Chief Sustainability Officer for Islands Energy Group, says: “[The Channel Islands] have got a huge amount of potential for tidal power. I feel strongly that tidal is an area that we need to be going for.”
She says Guernsey is monitoring the €45.4m Tidal Stream Industry Energiser (TIGER) Project which, if successful, will make “a cost-effective case for tidal stream to become part of the energy mix in the UK and France”.
Herschel says: “We need to keep an eye on the TIGER project and be ready if the
strike price starts to come down. Is tidal going to happen here in the short term? No. But if we can get our regulatory framework in place to make Guernsey attractive for tidal in the future, that will help.”
The islands are the perfect testbed for collaboration because we are all here and going through it together
THINK AUTOMATION, ARTIFICIAL intelligence and algorithms. This A-team is key in creating an effective and efficient process for every investor.
Let us first consider artificial intelligence (AI) – crucial to our process at Spring IM. AI is commonly misunderstood, but it is all around us. Put simply, AI is a type of computer science concerned with building machines capable of performing tasks that typically require human intelligence.
In general, AI systems work by consuming large amounts of data, analysing it for correlations and patterns, and then using these patterns to make predictions. This is how chatbots work. The chatbot is fed examples of text chats and can learn to produce seemingly human-like exchanges with people.
In essence, AI can perform a number of tasks much better than humans, simply because the vast amounts of data involved would bury a human analyst.
And that’s how our process starts – with vast amounts of data. We use a systematic investment approach, also known as data-driven or algorithmic investing. This method of investing uses data and technology to modernise the investment process and, by design, offers cost-efficient, risk-managed portfolios.
We utilise the expertise of investment professionals, mathematicians and data modelling specialists to create computer model constructs (algorithms) in which to collate, analyse and optimise data from a vast universe of assets to drive our investment selection process.
It lends itself to scalability through efficiency and, because of this, we are able to offer portfolios with low investment minimums and, furthermore, a low monthly savers option.
By using an algorithm-driven approach, by design, data is placed before emotion, removing the human behaviour and the biases shown to negatively impact investment decisions.
Emotional biases can be commonplace using a traditional approach such as herding (or ‘fear of missing out’), which is a tendency of investors to follow others without necessarily looking at whether the underlying fundamentals justify the decision.
Furthermore, by taking a dataled, systematic approach, none of the traditional fixed splits are imposed – typically 60:40 of equity and bonds respectively. As we have observed this year, using bonds as a hedge against a decline in equity markets is no longer a viable option.
With the drop in the bond markets, which fell in tandem with the equity markets earlier this year, the two assets have become correlated and so this traditional approach is no longer effective in providing a risk controlled portfolio.
For a technology-led investment solution to be truly efficient, automation is crucial. It is estimated that in the next 20 years, $30trn will be passed down to the younger generation, who will likely look to use techdriven, automated solutions.
And there’s significant growth in these automated areas. Wealth technology such as investment platforms that automate the trading, rebalancing and fee collection of portfolios are central to this process, and the approach we take at Spring IM.
The A-team is not limited to simply the investment process. It seemed crucial to us to build our entire service to lead the way as the future of investing. And so we built an end-to-end, fully automated and integrated offering, including a client reporting portal (with daily data) and digital application and onboarding service.
Through our AI-powered process, we ask customers a few questions to find out what type of investor they are and match them with a strategy that specifically meets their goals, whether that’s to preserve their money or take greater risks to grow their nest egg.
As the world of finance evolves into this new technological age, there comes a greater demand on access to quality information. Instant access to one’s financial data is rapidly becoming a bare minimum, such as access through an app. The days of sending a paper valuation through the post three months out of date might soon be a thing of the past, although still a common practice today.
The Spring IM client portal provides investors with sight of their portfolio at any time, enabling users to look in detail at how their investment is performing
on a daily basis and see any other linked investment accounts.
The client portal also enables parents to set up accounts that can be designated to their children, the future investors, helping them to develop their financial literacy.
We offer a platform that enables everyone to become investors in global markets and, importantly, invest in a solution offering globally diversified, riskmanaged portfolios.
Through the use of technology, we increase not only the efficiency of decisionmaking, but also the efficiency of processes leading to scalability and cost savings for the end client. n
By bringing digital innovation to the fore, we are able to:
• Utilise data to analyse clients’ level of risk and provide suitable portfolios
• Digitally onboard our clients
• Provide daily updates on everything in any of our clients’ portfolios.
Carmen Tyler is an experienced portfolio analyst. She is responsible for the investment solutions offered by Spring IM and is a member of the investment committee.
Email: carmen@spring-im.com
For more information: www.spring-im.com
Spring IM Limited is licensed and regulated by the Jersey Financial Services Commission to conduct Investment Business under the Financial Services (Jersey) Law 1998.
Carmen Tyler, Head of Investment Solutions at Spring IM, explores the role of artificial intelligence and other tech-led solutions in investing
king
Words: Alexander GarrettWHEN IT COMES to the impact customer experience can have on a company’s fortunes, few would dispute that Amazon – moving annual sales from zero to $470bn in less than 30 years – is worth a look. In the words of Jeff Bezos, its founder and CEO: “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
Indeed, it’s not exaggerating to observe that in the era of digital technology, customer experience has emerged as one of the key drivers of corporate success.
As another Silicon Valley rockstar CEO, Steve Jobs of Apple, put it: “You’ve got to start with the customer experience and work back toward the technology, not the other way around.”
Nevertheless, there are many businesses, especially outside the tech orbit, where customer experience – or ‘CX’ – still has relatively low priority, and in some cases isn’t even recognised as ‘a thing’.
That’s set to change, however, as few are now immune to at least marketing themselves digitally – while it’s also increasingly the expectation in both consumer and B2B sectors that products and services can be bought online.
For some companies, that can mean having to understand for the first time
what customer experience actually means in the context of their own operations, and what customer expectations really are. And it certainly means understanding how technology can best deliver that experience.
In the Channel Islands and other international financial centres, the development of customer experience is seen by some people as somewhat lagging behind other jurisdictions.
Simon O’Donoghue, CEO at investment management group Spring IM and Chairman of the Channel Islands Wealth Management Association, says the adoption of platform technologies by his sector in Jersey and Guernsey has been ‘woeful’ so far.
Platform technology is critical to delivering customer experience, he believes, because it gives customers easy access to seeing the value of their investments on a daily basis, carrying out trades and seeing how much they are being charged.
In a world where technology and automation are growing in influence and playing an increasingly pivotal role in delivering customer experience, it’s essential that companies don’t lean on them to the detriment of traditional customer values in the era of digital technology, customer experience has emerged as one of the key drivers of corporate success
The reason the wealth management sector has been slow to move, says O’Donoghue, is that “investment managers feel they are sitting pretty and they have no need to change their working model”.
Wealth managers are wary of giving their clients more transparency, he says. “That will mean the client can see what the
Jersey Business supports companies of all shapes and sizes to reach their full potential. Whether you’re starting up or established, contact us today to achieve more. jerseybusiness.je
“I’m driven to help my clients piece together their business puzzle to create something unique and special.”
fees are. And if the client wants to actually change investment manager, it’s easier for them to do so.”
It won’t come as a surprise to learn that Spring Investment Management was set up very much to address this. Many investment managers are still sending client valuations that are three months out of date, says O’Donoghue, but the Spring IM system gives instant access to up to date valuations on screen. “We’ve set it up in such a way that we can take an account for £1,000, or we can take an account for £5bn, and you’ll get exactly the same accessibility and the same reporting.”
Jersey-based international payments provider EWG – which provides alternative digital banking services for the professional business market – has also been focusing its attention on enhancing the experience for its customers.
According to EWG Director Warren Sanders, a key issue has been the onboarding process for new customers.
“Part of our USP is to provide digital selfservice onboarding,” he explains. “If you get that right, it is a game-changer.”
The process of setting up new banking services in the corporate sector that EWG serves can be both onerous and cumbersome, says Sanders. For some of the sophisticated legal structures that the firm works for, traditional banking providers make the process last as long as four to six months, he says, in a world where change is rapid and customers increasingly expect lightning fast access to services.
EWG can onboard in 24 to 48 hours – and is working towards getting that capability as near as possible to realtime, says Sanders. The company has been building a feature-rich user interface supported by chatbots, automated workflows and a choice of channels including different devices or APIs, that effectively provides plug-and-play functionality. Its next iteration will offer a developer domain where clients can
access API documentation on an opensource basis to integrate the EWG payment services into their own systems.
“If anyone wants to really excel and capitalise on the opportunity ahead in the finance sector, there has to be a shifting mindset,” Sanders explains. “And a real care to not simply recreate an offline experience online.”
In the context of online services, customer experience is a broadly based concept that can encompass such diverse factors as system latency, information availability, the user friendliness of the interface or the number of steps required to complete a transaction. When offline is added, it can include how quickly you are able to get through to a call centre, and the level of engagement of the person who picks up the phone.
But customers’ expectations online can be far more sophisticated: they don’t just ▼
to capitalise on the opportunity ahead, there has to be a shifting mindset –to not simply recreate an offline experience online
want to get a standardised report; they want to be able to drill down, interrogate the data, extract the information they need and even create their own reports. And they want to be able to do all these things wherever they are in the world and on whichever device they have in their hand.
The technology that has made the greatest contribution to this step forward is arguably the cloud. The cloud enables you to control all your customer data and integrate it with your systems, and between systems, with the help of APIs, says O’Donoghue.
Earlier this year, retail investment firm Hargreaves Lansdown announced that it was preparing to spend £175m on a cloudbased platform strategy, citing ‘infinite scalability’ as a key part of the rationale.
AI is another technology with significant potential in the realm of customer experience – one of the most obvious examples being in the use of AI-based virtual assistants that can field customer queries (albeit with variable sophistication).
Iain Davidson, Head of Enterprise Products at IT and telecoms provider Sure Business, believes AI can play a key role in deriving useful insights from the customer data collected by CRM and other systems, and especially in personalising what you offer to your customers.
“AI can come into its own in terms of giving you a better insight into what customers are doing and the trends they are following,” he explains. “That may be sector-wide data from across many customers and different companies, in which case it would be anonymised.
“It can also help you understand what your customers individually are interested in. Amazon’s AI, which says that ‘customers who bought this also bought that’ is a very good example of using technology to improve a customer’s experience.”
THE ROLE OF CRM Davidson believes CRM (customer relationship management) is at the heart of providing good customer experience because it enables companies to capture data every time they interact with their customer, and therefore it is an essential aid to understanding the customer.
“Until six months ago, I was on the customer side, and one thing I learned is that any service you offer your customer must be relevant to them,” he says.
“My experience was that some companies just wanted to tick a box or to sell you something; but others were much better at the relationship side – they wanted to know how they could make you better at what you do.”
Another factor that has become an increasingly prominent part of the customer
experience in the past few years is security. With cybercrime and fraud rampant, it’s never been more vital that customers’ ID is verified rigorously before they can sign on to any systems and carry out transactions.
And that has pushed companies increasingly towards adopting processes such as multi-factor authentication – or even biometric techniques such as retinal scans, voice or facial recognition or fingerprint scanning – to overcome the inherent weakness of passwords.
All of these technologies do come with a potential downside for customer experience if they are perceived as being too onerous, intrusive or difficult. In practice, says Sanders, it is seldom the case.
“We start with security and we end with security – and we leverage it to augment the customer experience,” he explains.
Customer experience is all about building trust with customers, he adds: “They want to be confident they are not going to be scammed or become a victim of fraud.”
In the years to come, the tech landscape is set to become even more complex as social media and the internet evolve into the so-called Metaverse.
Will companies interact with their customers via avatars? Or find immersive ways to allow their customers to experience their products and services with the help of VR headsets?
In a world where face-to-face ‘real-life’ physical interaction will still have a part to play, one thing is certain: customer experience will become multi-dimensional and will require orchestration to ensure that fast and frictionless doesn’t mean sacrificing values such as trust, relevance and customer understanding. n
AI can come into its own in giving you a better insight into what customers are doing and the trends they are following
IT IS NOW predicted that 59% of the global workforce is made up of Millennials and Gen-Z – a key demographic for the Channel Islands’ thriving finance industry. But the ever-increasing cost of property on the islands, coupled with inflationary pressures, are making living here increasingly challenging for the next generation of professionals.
That could have a negative impact on the ability of the islands’ businesses to recruit and retain new talent, and to build teams with diverse skillsets from a range of socio-economic backgrounds.
Ellie Jones, CEO of Guernsey-based equal rights charity Liberate, says rent on the islands has been pushed to a level that’s making it unaffordable for many working people, particularly those employed in industries such as retail and hospitality.
“Because wages aren’t growing at the same rate as inflation, the cost of property for your average person here is just unsustainable,” she says. “Often, people are having to pay more than half their wages in rent each month.
“Mortgages are also pushing people to their limits. A friend of mine, who’s an accountant, was recently offered a mortgage. He worked out that if the mortgage rate went up by more than 1%, he wouldn’t be able to feed himself. He turned it down.
“I feel like we’re waiting for a crisis to happen for a lot of people who have stretched themselves to the limits of what they can afford.”
While young professionals continue to grapple with the rising cost of living, the Channel Islands are also experiencing a shortage of affordable homes as a result of more people returning to the islands during the Covid-19 pandemic.
“This has just pushed prices through the roof, because there’s not enough stock
to keep up with demand,” says Jones. “I think it’s forcing a lot of people into work poverty. I’ve got absolutely no idea how anybody who works in certain sectors can even afford to rent a home here, never mind dream of buying.”
The islands’ finance industry remains strong, with many young professionals in the sector looking to move to or return to the islands in order to develop their career.
Edward Jones, Head of Lending for the Channel Islands at Butterfield, points out that unemployment in the islands is low, particularly in the thriving finance industry, and that wages in many circumstances have risen accordingly.
Some are worried that the rising costs of fuel and energy – along with stagnating wages – could widen the gap between those working in different sectors.
“We’re going to end up with this complete disparity between the rich and the
With the cost of living rising, inflation at its highest rate in decades and property prices soaring, the Channel Islands face a challenge to recruit the young professionals that the future of its businesses will depend upon. And a pending housing crisis is at the root of the problem
The Islands are experiencing a shortage of affordable homes as a result of more people returning during Covid-19
poor,” says Ellie Jones. “There’s going to be no middle ground. The working people in the middle-income bracket, who don’t yet own a property, are going to leave. It’s just a disaster waiting to happen.”
The impact, she continues, could be catastrophic for many of the islands’ supporting businesses – and the wider economy of the Channel Islands.
“The effect will depend on the type of business,” she says. “People in the finance
sector, for example, can afford to pay these rents, and employers often cover the costs for staff to relocate and live here, which pushes the costs up for everyone else.
“If you look at the hospitality sector, which is struggling with rising costs anyway, many businesses are closing or reducing their business hours. They’re also struggling to get staff as people working in that sector just can’t afford to live here. If people can’t afford accommodation of a decent standard, why would they choose to come and work here?”
Even for the thriving finance sector, rising costs could impact the long-term viability of living on the island for young professionals, particularly if other businesses are being forced to close or are unable to recruit skilled, diverse teams.
The end result of reduced quality of life could have a much wider impact, felt across the islands and beyond.
So, where does the answer lie? And what steps can be taken to curb the unprecedented prices currently being seen in the islands’ property markets?
For Ellie Jones, action needs to be taken to address both spiralling rents and the often prohibitive price of homes.
“First, something needs to be done about rent control,” she says. “There needs to be a limit on the maximum amount of rent that somebody can charge per square footage. The problem, however,
is that if that’s implemented now, it would have to be based on current rates, which are already very high.
“It wouldn’t have much impact, but something needs to be done. At the moment, it’s hard to find a two-bedroom place to rent in Guernsey for under £2,000 per month. We have lots of protection for landlords, but no protection for renters.”
She adds: “We also need affordable new housing for people who are not on the property ladder. That shouldn’t be restricted to first-time buyers.
“There are so many people who have bought property and then either had to sell it at the wrong time or couldn’t afford their mortgages.”
Edward Jones of Butterfield agrees that affordable housing must remain a priority in the coming years. “At Butterfield, we focus primarily on mortgages and owner-occupied facilities, but the issue of affordable housing is key,” he says.
“There are a number of different applications under way, certainly in Guernsey and Jersey, for planning more affordable housing, and private profit opportunities for certain residential apartment blocks.
“I think that is a positive thing for the island in increasing affordable housing, creating more modern structures, attracting a younger workforce and enabling them to stay on the islands.” n
We need affordable new housing for people who are not on the property ladder – and not restricted to first-time buyers
AS TECHNOLOGY HAS now become a vital extension of the user, almost every business has transformed into a technology business to some extent. This is, in part, due to the enormous number of applications and data that businesses rely on, and how we empower our employees, partners, and customers to use them.
With data proliferating at a prodigious rate, innovative new solutions using cloud technology have been created to adapt to this changing landscape. Here are just some of the latest developments we at Sure Business have noticed.
Perhaps the most obvious consideration is the changing work landscape. Where previously ICT firms were primarily tasked with kitting out offices with the latest tools and technologies, we now accommodate team members working from anywhere, be that in the office, on the move, or at home.
The pandemic has meant that the way we use cloud technology has needed to evolve and adapt quickly to meet this changing landscape. This has also had a material impact on security, which has driven a shift in how intellectual property is protected from a user, access mechanism, and data perspective.
This relationship is indicative of every company’s need to become technology focused. While some firms may implement cloud solutions in a ‘DIY manner’, others will simply hire a provider to manage their cloud software.
Where Sure Business is unique is in our ability to provide a full-service ICT offering, ensuring our clients’ digital needs are met in full; relieving them of the need to run their technology and focus on running their business.
Where businesses could once apply any cloud solution to achieve its aims where there were fewer moving parts, this is no longer the case. The critical need to drive technology solutions with security, policy, and governance at its core is ever more important to protect businesses’ intellectual property.
The increasing capabilities of the hyperscale cloud offerings are enabling business to drive increased value from applications and data through sheer breadth and depth of services available and their interoperability.
Solutions once thought of as state-of-the-art can be achieved through combining available services in single hyperscale solutions without additional vendor software or even leaving the cloud platform.
Hyperscale cloud solutions now provide end-to-end capabilities that the boutique firms simply don’t have the resources
to offer. This is why Sure Business partners with major tech providers such as Microsoft and Mimecast to ensure our clients get the best service possible.
The ability to enforce both regulatory and policy requirements is no longer a ‘nice-to-have’; these are increasingly being embedded into hyperscale solutions.
Simplicity, ease of use, interoperability and cost are critical, but the human cost should never be underestimated. Organisation and technical measures to control how applications and data are used, by whom, how, when and where are essential to protect intellectual property.
The value of data should never be underestimated. The current impetus is on simplicity, cost, ease of use, auditability and, most importantly, security.
Personal and professional data has become too valuable and could potentially become cripplingly costly – due to reputation-associated revenue risk, risk of regulatory fines, and risk of ransomware – to not keep it as secure as possible using the latest cloud technology.
We at Sure Business have invested heavily in offshore private and public cloud platforms, keeping all our customers’ data in an environment where it is highly protected against the threats from cyber criminals. n
To find out more about cloud solutions and how we can help your business, get in touch at contactus@sure.com.
Sure Business partners with tech providers such as Microsoft and Mimecast to ensure our clients get the best service
From friend-shoring and 5IR to the cost of talent and energy supply, we explore six disruptors and emerging trends set to have an impact on your business in the coming years
Owing to the soaring costs of food and fossil fuel, inflation in the UK hit a 40-year high of 10.1% in July, before dropping slightly to 9.9% in August. It’s a similar picture around the world. In the US the current annual rate is 8.3%, while Sri Lanka hit an incredibly worrying 70% in August as it struggled with its worst economic crisis in more than seven decades.
But what does this mean for financial services firms? While higher inflation is generally seen as a positive for banks –in that it raises net interest income and therefore boosts profitability – it often proves to be troublesome and destabilising. Late last year, Goldman Sachs Chief
Operating Officer John Waldron identified inflation as the number-one risk that could derail the global economy and stock markets, while JPMorgan Chase Chief Executive Jamie Dimon told analysts that banks “should be worried” that high inflation and high interest rates increase the risk of extreme price movements.
Credit exposures in sectors most affected by inflation – for example, in the consumer discretionary, industrial and manufacturing sectors – should therefore be closely monitored, while investment houses should remain wary of the fact that inflation and monetary tightening could disrupt deal pipelines. As ever, those with diversified businesses are likely to fare best.
Recent events such as Trump’s trade war and Russia’s invasion of Ukraine have called into question the notion of a globalised economy. Covid-19, meanwhile, disrupted supply chains around the world.
In response, many nations attempted to address these factors with reshoring – the practice of transferring a business operation that was moved overseas back to the country in which it was originally relocated. This, however, often proves to be a limited
process. As an alternative, some countries are looking to friend-shore – a solution that involves relocating elements of supply chains to friendly trading partners.
US Treasury Secretary Janet Yellen has touted the strategy as a way to reduce the vulnerabilities of a supply system badly strained over the past two years and a tool that will deepen relationships and “diversify our supply chains with a greater number of trusted partners”.
It will also, she says, protect households from inflation and disruptions caused by geopolitical and economic risks.
Critics, however, say that the method could split the global economy into hostile camps, hurting growth and worsening inflation. Others fear that restricting trade and direct investment to political allies could undo decades of gains from globalisation, including raised incomes for hundreds of millions in the developing world and lower prices in the West.
There is also unease around the fact that this approach could place security and political concerns above those of economic efficiency.
restricting trade and direct investment to political allies could undo decades of gains from globalisation
In terms of its impacts on financial services firms, companies may be called on to provide pathways to their commercial accounts by recommending friend-shoring routes and offering overall expertise. Banks with wider networks and ‘boots on the ground’ in the places where friend-shoring is attractive will be best placed for success.
It’s suggested by Gartner that by 2026 a quarter of us could be spending at least an hour a day in the Metaverse.
Accenture, meanwhile, says that the Metaverse brings with it “tremendous opportunity” – 71% of executives say it will be good for business – but that lots of work is needed first. This includes redesigning today’s internet from a “disparate collection of sites and apps” to a “continuous 3D universe”.
Banks and other financial services firms will benefit from this space in a number of ways – one being the richness that the Metaverse can provide.
While digital banking offers convenience, it lacks experience – so little today is done in branches or face to face alongside real people. But with the Metaverse, firms have the opportunity to use AR/VR and other technologies to overhaul how they connect with clients and staff; they can once again deliver advice and build relationships in a more meaningful way. In fact, some 47% of bankers believe that customers will use AR/VR as an alternative channel for transactions by 2030.
Banks are also extremely well placed to address the growing demand for digitally native currency by securing, insuring and lending against cryptocurrency, NFTs and virtual real estate (see box overleaf, for a rundown of some of the banks already active in the Metaverse).
The need to decarbonise energy usage and reduce reliance on fossil fuels in order to meet net-zero targets and address the climate emergency is now nothing short of imperative. This will require the support
of both investors and lenders. A report from NatWest recently revealed that as the energy sector transforms, and as a result new business, new markets and new technologies emerge, companies will need to assess and analyse the credit risks arising from such lending. They will then have to structure their debt offering to meet client needs, but also to protect against these new and different risks – such as the viability of new technologies, particularly those “that have little track record of being scaled-up for use on a commercial scale”.
The report also says banks and investors will need to dedicate time and headspace to gaining a better understanding of new markets, such as the hydrogen market or the market for voluntary carbon credits, and how demand and pricing for new products will evolve.
The fifth industrial revolution – or 5IR as it’s being termed – will see “human creativity integrated back into the
with the Metaverse, firms have the
opportunity to use AR/VR and other technologies to overhaul how they connect with clients
technology landscape”, providing a real need for businesses to keep pace with, if not outpace, their competitors. This will mean banks and other financial services businesses will need to develop humancentric internal and external strategies – ones that offer more purposeful, selffulfilling and sustainable solutions.
Essentially, this means focusing on putting people front and centre, and providing them with precisely what they want in terms of experience. An emphasis on empathy will also be imperative.
This thinking should be applied to everything from the recruitment and onboarding process and a more flexible approach to work through to meaningful interpersonal interactions with customers, even on digital platforms.
Since Covid-19, the world of employment has been upended. First, we had furlough and mass redundancies, then the Great Resignation, and now Quiet Quitting –whereby employees are said to be doing only what their job demands and nothing more. On top of this, the cost of living has rocketed, which is causing employers even more problems as staff seek rises to cover the additional costs.
As a result of all of this, talent is expensive – Goldman Sachs, for example, is one of the many industry giants reporting record-high annual expenses fuelled by
financial services businesses must develop human-centric internal and external strategies – ones that offer more purposeful, sustainable solutions
soaring compensation and benefits costs. Productivity, meanwhile, can be low – often the result of low morale.
Financial services companies must therefore work hard to retain existing members of staff by listening and reacting to their individual wants and needs and fostering an inclusive environment that celebrates diversity.
They should also build their own supply chain, becoming creators – not simply consumers – of talent. Here, a focus on upskilling and reskilling opportunities will be key, with customised training and learning programmes being developed and embedded into the company culture. n
• KB Kookmin Bank – one of the biggest financial institutions in South Korea – offers a virtual bank where customers can access personalised financial information and interact one-on-one with its financial advisers in VR.
• BNP Paribas has launched a virtual reality app that enables retail banking users to access their account activity and transaction records in a VR environment.
• Bank of America offers VR training in nearly 4,300 financial centres nationwide, allowing employees to practise a range of routine to complex tasks and simulate client interactions through a virtual environment.
• JP Morgan has opened the virtual Onyx lounge. Here, the bank can facilitate cross-border payments, foreign exchange, financial assets creation, trading and safekeeping.
• HSBC is investing in a plot of land at The Sandbox Metaverse, which it will develop to engage with sports, e-sports and gaming fans. The bank says the partnership with The Sandbox will enable it to create innovative brand experiences for new and existing customers.
Meet Pierpaolo, he’s one of three Masters of Wine here at Waitrose & Partners. He and his team spend their lives searching the planet to find the best wines for our customers.
Think of them as your very own sommeliers. Because every single wine we sell has been hand-picked by them.
MORE PEOPLE HAVE BEEN INTO SPACE THAN HAVE PASSED THE MASTER OF WINE EXAM
Almost nine in 10 (88%) women wish their workplace was better set up for the menopause, new research has found. The report by GenM, based on 405 interviews with male and female jobholders at businesses in the UK, found more than half (52%) of menopausal or post-menopausal women said their employer knew nothing or very little about the menopause, while almost half (48%) felt uncomfortable about discussing the menopause at work. Only a third (32%) of staff surveyed said they thought there was commercial value in understanding more about the menopause in their job role or department. The majority of FTSE100 companies fail to publish menopause policies, the research found.
Passengers and freight will soon be travelling across the ground at speeds of more than 1,000 km/h, according to one of the major companies developing hyperloop technology. Robert Miller, Chief Marketing Officer of Hyperloop Transportation Technologies, told the Hong Kong Trade Development Council’s Belt and Road Summit: “We’re only years away from living and riding in the age of hyperloop.” Hyperloop technology involves pods being propelled along a low-pressure tunnel with the help of magnetic force. A full-scale prototype has been built in Toulouse, France, and the first government project is under way in Italy to build a 10km hyperloop system.
People who learn foreign languages can expect to keep their knowledge for a lifetime, according to research by the University of York. Participants in a study at the university were tested on their French 50 years after they last sat an exam – and were found to perform at the same level as recent students. The study also showed that in times of particular need, such as issues at an airport or in health emergencies overseas, participants were able to recall the correct foreign language words at short notice, suggesting that the brain only needs a small amount of motivation to recall this language learning.
Sainsbury’s has unveiled a new concept store designed to show how people can counter food waste by freezing everyday foods. Called Sainsfreeze, the walk-in store was opened for two days in London’s Shoreditch, filled with frozen groceries that would usually be sold fresh. By repackaging regularly sold items, Sainsfreeze aims to cut down on freezer space, keep food fresh for longer, and teach consumers new ways to freeze food and reduce waste in their homes. The items available were selected based on research that revealed the most commonly disposed products in British homes – milk, eggs, bread and onions, as well as bananas and herbs.
Scientists from Spain and Italy have developed concrete that can repair itself if it cracks and is 30% more resilient than existing high-performance material. The team from the Polytechnic University of Valencia (UPV) and the Politecnico di Milano is behind the new concrete, which can repair automatically when it cracks. It’s all down to the design of the mixture and the use of “components such as crystalline additives, alumina nanofibers, and cellulose nanocrystals, which are capable of enhancing the capacity of the material to repair itself”. The new material is said to be suitable for infrastructures subjected to extremely aggressive environments such as marine constructions or near the coast, as well as geothermal power plants.
by John Caudwell (Mirror Books, £18.99, hardback)
Classic rags-to-riches memoir of a boy who grew up in a terraced house and ended up as a billionaire, at one stage owning the most expensive home in London. Caudwell’s fortune came from founding Phones 4U, the high-street retailer that rode the wave of the boom in mobile phones, and which he sold for £1.46bn. His first venture involved buying 26 Motorola hefty phones in cases at £1,350 each, which he sold over eight months to local plumbers, taxi drivers and TV repairmen for £2,000 apiece. It was several years before he made his first profit. Since selling Phones 4U, he’s become one of the UK’s biggest philanthropists, committing to give more than half his wealth to charity.
by Amy Gallo (Harvard Business Review Press, £18, hardback)
This is about how to navigate the most difficult relationships in the workplace. The author, a Havard Business Review writer and podcaster, identifies eight familiar types of difficult co-workers – among them the insecure boss, the passiveaggressive peer, the know-it-all, the biased coworker – and provides strategies tailored to dealing constructively with each one. The Tormentor she describes as “a senior person who has earned their way to the top, typically making sacrifices along the way, and then mistreats others below them”. She also asks what it is about each of these archetypes that motivates them. Definitely one to keep handy in your desk.
The Story of Art Without Men by Katy Hessel (Hutchinson Heinemann, £30, hardback)
As the name suggests, this is an alternative history of art, one in which men play no part and the women who have largely been overlooked by art historians come to the fore. It was inspired partly by misogynistic tendencies in the art world, partly by the huge number of outstanding female artists who have never achieved the fame they deserved, and in part by blatant injustice. Take the case of Marcel Duchamp’s celebrated urinal artwork, which Hessel says was actually created by a woman, Baroness Elsa von Freytag-Loringhoven. Hessel has taken the celebrated standard textbook on the subject, Gombrich’s The Story of Art, and rewritten it with a twist in the tail.
The Russia Conundrum: How the West Fell For Putin’s Power Gambit – and How to Fix It by Mikhail Khodorkovsky and Martin Sixsmith (WH Allen, £20, hardback)
This will be essential reading for anyone who really wants to understand 21st century Russia and its current actions in Ukraine. Khodorkovsky, the oil tycoon who fell out with Putin, was stripped of his wealth and thrown in jail, looks at what has gone wrong with Russia, in parallel with recounting his own story. He tells the story of how Putin came to power from an insider’s perspective, and hints at what has motivated the Russian President to try and rebuild his country’s empire and to seek direct confrontation with the West. And he offers his own advice on how western governments should strike back.
This podcast by Finnish tech firm Edita Prima aims to help audiences “redefine their views on doubt and vulnerability”. The guests in the first series include Argentinian entrepreneur Aito de la Rua, Ecuadorean human rights activist Helena Gualinga and Oscar-winning producer Mickey Meyer on the goal of creating a more equal, reasonable and sustainable future. www.talksofimperfection.com
Amount of electricity generated worldwide by solar panels in 2020, measured in millions of megawatt hours
Source:
Percentage of global electricity generation currently accounted for by solar
Source: IEA
The Guernsey Financial Services Commission has launched the Natural Capital Fund framework, a designation for funds to help channel investment into biodiversity and natural capital projects that make a positive contribution or significantly reduce harm to the natural world. The framework complements the existing Green Funds regime. www.gfsc.gg/news/green-isle-guernsey-launches-natural-capital-fund-regime
Cosmetics firm Avon and Marie Claire magazine have launched a podcast series exploring the experiences of prominent women over the age of 40. The first series features women from the world of beauty, media and business, including influencer Anna Whitehouse on flexible working; Ntsiki Biyela, South Africa’s first female black winemaker, on overcoming prejudice; and Olympian Michelle Griffith-Robinson on being a life coach.
https://podnews.net/podcast/ia3w9
YouTube has launched a programme for creators wanting to make money on Made on YouTube. The new model introduces ways for creators to monetise their work, as well as encouraging more video-makers to join the programme. There will be an increasing recognition of shorts (15-second videos) that will give the makers revenue-sharing on ads, and new ways to monetise content that makes use of popular music. https://blog.youtube/news-and-events/supporting-the-next-wave-ofcreative-entrepreneurs/
Area in acres covered by the world’s biggest solar park, Bhadla Solar Park in Rajasthan, India
Source: Wikipedia
Source: The Guardian, August 2022
The name may not be familiar to many and she’s managed to keep a pretty low profile throughout much of her career. But anybody who wants to do a trade deal with the European Union will have to contend with Sabine Weyand, who became its Director General for Trade in 2019.
When politicians in London rail against unelected EU bureaucrats, Weyand is probably one of the people they have in mind. A career civil servant, she has worked for the European Commission since 1994, but first came to prominence outside Brussels when she was appointed the EU’s Deputy Chief Negotiator for the Brexit process, working alongside Michel Barnier.
David Davis, Britain’s former Brexit Secretary, said Weyand was “the real brains” behind the EU’s negotiations. Liz Truss’s government will be well aware that if they want to rewrite the UK’s EU trade deal, Weyand has a legendary attention to detail. Bloomberg called her “the real force behind the Brexit talks” alongside the UK’s Olly Robbins, and cited her ability to keep 27 states onside without conceding an inch as being instrumental in the deal that Brussels obtained.
German by birth, Weyand was educated mainly at the universities of Freiburg and Tübingen, although she spent a year at Cambridge, which gave her an understanding of the British and a love of Shakespeare. She is a great champion of trade agreements and was one of the key figures in the mooted Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, which would have been the world’s biggest ever bilateral trade deal but was scrapped by US President Donald Trump in 2018 after he came to power.
Bloomberg has called her “the real force behind the Brexit talks”
Since Weyand became head of external trade for the EU it’s no coincidence there’s been talk of reviving TTIP on both sides of the Atlantic. She’s in charge of imposing EU trade sanctions on Russia, as well as bringing EU states together in their response to the bloc’s dependency on Russian energy and materials. China is another challenge: Weyand has to balance unfair competition concerns and human rights issues against the need to re-engage with the world’s second biggest economy. On the trade deal front, she has agreements with Mexico and Chile in her sights for this year, with Australia in 2023. The government in London will be looking on sheepishly to see how successful she is.
One tool in the trade union armoury was ‘working to rule’, when workers were told by their union not to do overtime but limit their efforts to their contracted terms. Today’s Gen-Zers have invented their own version – Quiet Quitting. It’s not about resigning or leaving your job, but doing as little as possible while retaining your job. It’s essentially seen as a protest against long hours, low pay and lack of recognition. Like so many changes in workplace culture, it has its roots in the pandemic, when millions had the chance to reappraise their lives. In a spate of TikTok videos, young people show themselves at their desk painting their nails or sitting in the park doing anything but going ‘above and beyond’.
Some employers have, according to Fox News, hit back with ‘Quiet Firing’ – finding a way to get rid of employees you don’t want without having to dismiss them. The idea is you make it miserable for the employee in question by passing them over for interesting work and opportunities until they take the decision to quit themselves. Would it work, though, if the individual in question is already Quiet Quitting?
The set of emotions triggered when you watch an evocative video
When the results of the Colorado State Fair’s annual arts competition were announced at the end of August, a storm of protest quickly blew up on Twitter over the choice of winner in the Digital Arts category. Théâtre D’opéra Spatial by Jason Allen depicted a Baroque opera scene featuring a group of elegantly gowned figures on a burnished stage with a moon-like orb in the backdrop. Few would dispute it was easy on the eye, but what outraged other artists was that the piece had been created by an AI package called Midjourney. Allen pointed out that he had not broken any rules and told the New York Times: “It’s over. AI won, humans lost.”
But many saw the result as a travesty and predicted their livelihood would soon be under threat from work generated by computers.
The episode has also prompted a debate about what really is art. In fact, as Allen later explained, the work had not been created entirely free of human effort. He started by entering various words and phrases into Midjourney, which produced more than 900 renderings. He selected his three favourites, then tweaked them on Photoshop, boosted their resolution using a tool called Gigapixel and printed them on canvas before putting all three into the competition.
What really rankles with some members of the artist community, though, is the fact that software like Midjourney uses the work of existing artists to ‘learn’ and train itself to make new works.
In fact, AI tools to generate artwork have been around for a number of years, but the fact that one has won an art competition has elevated the debate to a new level. One of the leading tools on the market is DALL-E 2, which was introduced by the California organisation OpenAI, itself founded by a group led by Elon
Musk. With DALL-E 2 you can create artwork by entering simple text – “a koala bear on a bicycle” – and it quickly generates a range of images from its understanding of these objects and from existing images sourced from the internet and elsewhere. You can also use the tool to manipulate and superimpose new images on existing work.
Google has developed two text-to-art generators called Imagen and Parti, but although it’s shown what they can do, it hasn’t released them to the public because of the risk that they are used for stereotyping or misrepresenting certain groups.
NightCafé (presumably named after the Van Gogh painting) is one of the popular tools you can buy; you pay for a certain number of ‘credits’ to create a new artwork, starting at $9.99 per month for 100 credits. You are the owner of what you create and you can order prints or download your images. But on the minus side, all text-based tools are only as good as the AI’s understanding of what you are asking for, and they can get it spectacularly wrong.
Google has also released DeepDream Generator, which allows you to make art from existing images using three different styles, and is available for free.
AI-generated art has already made some waves on the art market. In 2018, Christie’s auction house held a sale of AI art in New York. One work, a ‘painting’ titled Edmond de Belamy, made by Paris collective Obvious, sold for $432,500, almost 45 times its $7,000-10,000 estimate.
It’s clear that AI is now capable of generating art that could be mistaken for a human work, and is of a similar quality in terms of execution. Some people still believe that work created by a computer can never be regarded as real art. The debate will continue.
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HOME BRES The Picopresso is a palm-sized espresso maker that’s ideal for people who can’t do without their favourite coffee while travelling. £109.90 www.wacaco.com/ pages/picopresso
To advertise in the directory in print or online contact Carl Methven on carl.methven@blglobal.co.uk
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: rpa@agileautomations.co.uk Website: www.agileautomations.co.uk Twitter: twitter.com/AAutomations LinkedIn: www.linkedin.com/company/ agile-automations/ Facebook: www.facebook.com/ AgileAutomations/
Deloitte is the leading provider of Audit & Assurance, Tax & Legal, Consulting, Financial Advisory and Risk Advisory services. More than 345,000 professionals across 150+ countries and territories at Deloitte deliver measurable, lasting results. We reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way towards a stronger economy, a more equitable society and a sustainable world.
Deloitte employs over 200 professionals in our combined Islands & Gibraltar business, that is part of Deloitte UK and the wider North South Europe network. Alongside our market-leading Audit & Assurance and Tax & Legal services, Deloitte’s Island & Gibraltar Advisory team is focused on digital transformation, ESG services, regulatory advice and transactional support.
Our organisation has grown in both scale and capabilities, and our shared culture and mission, to make an impact that matters, remains unchanged. This is evident in our WorldClass ambition, WorldClimate initiative and ALL IN diversity and inclusion strategy.
Jo Huxtable - Tax Partner, Guernsey D: +44 1481 703 308 jhuxtable@deloitte.co.uk
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Theo Brennand - Audit Partner, Jersey D: +44 1534 824 396 tbrennand@deloitte.co.uk
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 https://home.kpmg/cds
Contact details: Neale Jehan Senior Partner KPMG in the Crown Dependencies E: njehan@kpmg.com T: +44 (0) 1481 721000
We get straight to the point, managing complexity to get to the essentials. It is a collaborative approach. Our global network of offices covers every time zone. We are the only law firm to advise on BVI, Cayman Islands, Guernsey, Irish, Jersey and Luxembourg law. Our network of locations also includes Beijing, Hong Kong, London, Shanghai, Singapore and Tokyo.
Legal services for the corporate and financial sectors form the core of our business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. We also have strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and corporate recovery and property.
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Contact: Guernsey Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA
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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 visit www.trustquay.com, follow @trustquay on LinkedIn or email us: jersey@trustquay.com guernsey@trustquay.com
We are an independent and dynamic wealth management business, delivering investment solutions via our flagship discretionary portfolio management service.
Nimble in our decision making and flexible in our approach, we capture the most compelling investment opportunities and focus on delivering consistent performance, in line with our clients’ investment objectives. Our investment solutions are deliberately clear, and our pricing structure is transparent –ensuring exceptional value for all our clients.
With extensive experience, shared values and an unwavering commitment to service excellence, we work closely with our clients to develop long term relationships, built on trust, respect and confidence. From regular face to face meetings to continued access to a relationship team, we ensure a personal service and a commitment to continuity, always.
TMGA Wealth Management – we’re invested in you.
To find out more and to discuss your specific requirements, please contact:
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TMGA Wealth Management Limited (Registered Number: 132402) is authorised and regulated in Jersey by the Jersey Financial Services Commission for the conduct of Investment Business. Please note the value of investments and the income derived from them may fluctuate from time to time.
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