The future of tech in the Channel Islands

Written by: BL Global Posted: 08/09/2017

Aonghus FraserFour technology experts gathered together to discuss the state of play for technology in Jersey and Guernsey. Sam Bryans, CEO at PlainSail Technologies; Aonghus Fraser (pictured right), Group Chief Technology Officer at C5 Alliance; Ricky Magalhaes, Managed Security Services Director at Logicalis Jersey; and Tony Moretta, CEO at Digital Jersey, give their view on tech in the finance industry and beyond

It’s been said that finance businesses in the islands aren’t making the best use of technology. Would you agree? And if so, how could they use tech more smartly?

Aonghus Fraser: Hardly any companies are making best use of technology. The term ‘digital transformation’ isn’t going anywhere anytime soon, as most companies are, or should be, on a journey to improving their businesses by leveraging technology.

There’s a running joke coined by the Head of Transformation at one of our clients, where they are “undergoing a transformation programme to bring them up to 1990”. It’s tongue in cheek, of course, but that organisation at least realises how far they have to go.

Ricky Magalhaes: I’d agree. There’s so much good and useful technology available that can automate and refine processes, and it’s just being ignored and underutilised. What’s more, these technologies can reduce cost and complexity – and the Channel Islands are in a great position to leverage these to enhance and provide us with an advantage.

I would say that the best use of technology would be to automate, reduce cost and transform what we do in a modern and efficient way.

Tony MorettaTony Moretta (pictured right): As with all industries and locations, I think some companies are making good use of technology and some aren’t. I’ve seen great examples of financial services companies using technology well, including the banks who see it as key to their future transformation and continuing efficiency.

However, we need to recognise that some companies still use relatively inefficient and staff-intensive processes, where technology is the answer to both reducing their costs to stay competitive, whilst also improving their services.

Sam Bryans: The finance industry consists of many companies, small and large. Larger ones can often afford large IT budgets, in-house technicians and developers, or they can outsource. So, it’s easier for them to become more efficient and connected using the latest tools and platforms.

Smaller companies often don’t have the same in-house expertise or budget and depend on third parties for advice and bespoke software. So, they’re more conservative, wary of risk and cautious with budgets. Many cutting-edge enterprise offerings are out of their reach. It’s the small-to-medium enterprises that need help and advice, and software they can afford. 

Are the companies that make the best use of tech going to be the ones that survive and/or thrive?

RM: Thrive for sure, as it gives them an edge by reducing the cost and this will be passed onto the customer.

TM: We’re in a more competitive global marketplace than ever, and customers will always seek out quality of service and the best price – so all industries including finance have to remain competitive, and technology can be the answer, but not the only one. I not only want to see larger companies make better use of tech, but for them also to support the growing number of fintech startups in Jersey.

SB: You’d think companies using tech would do well, but adopting the wrong technology, or mismanaging the right technology, can also lead to business failure. It’s important not to be taken in by the latest buzzwords and trendy concepts. If you have legacy technology that still works for your business, why change it? However, if you’re missing out on opportunities or becoming uncompetitive because your legacy products are inefficient, not scalable, or prevent you from adapting, you need a plan.

Sam-BryansShould every company have someone in-house who’s responsible for the use of tech – a Chief Information and Technology Officer, for example?

TM: Yes – absolutely – but there also needs to be a growing understanding of at least the potential of technology to improve the business across all the executive teams and boards.

RM: I’d agree. Without focus, we’re lost. It’s important to know what’s out there and how to use it. It’s like internal technology marketing. You’ll notice companies that embrace technology are normally the ones that adapt quickly and are successful. 

Sam Bryans (pictured right): I’d say it depends on the size of the company. IT and the internet are central to everything everybody does these days, so the expertise must come from somewhere. At the same time, IT consultants have the reputation of being expensive, thus scaring off the very small businesses. For those companies, public bodies such as Digital Jersey are essential for providing free advice and education.

AF: Sam’s right. Not all companies will be of a scale to require a specific individual as a full-time position, but the role is definitely required. I strongly believe that, at a minimum, a non-exec director with the requisite experience is essential, or there should be a regular strategy review with a trusted individual or partner who can provide strategic guidance.

There’s been a lot of noise about the General Data Protection Regulation (GDPR) recently – is this justified?

SB: Definitely. Now that almost every aspect of our lives has moved online – both voluntarily and involuntarily via government decree and commercial necessity – it’s essential that private citizens have control over what happens to the information that they provide.

AF: I’d say yes and no. The headline scaremongering about the potential risk of crippling fines have been misused in nearly every presentation I’ve been to. Yes, the fines are big, and organisations need to sit up and take note. But those are the maximum fines that are only likely to be applied in a ‘gross negligence’ type of scenario.

If you’ve been following best practice with regards to data protection already, there may be some tweaks to be made, but I don’t believe the Channel Islands Data Protection Commission will be attempting to cultivate a new revenue stream with big fines. The emphasis should be on education and meeting the equivalent regulations.

If you’ve not been doing anything at all, then it’s not too late, but time is running out fast to ensure that you have a viable plan and understand the implications on your people, processes and infrastructure.

TM: I think the noise has largely been to make people aware of the urgency to be ready by the date it will be introduced, but it’s important that companies get the best advice on the implications for them in good time.  

RM: I’m with Gus, in that I think it’s somewhat justified. At the moment, it’s noise, but it’s real regulation with real teeth that will bite, so it’s not something that should be ignored. However, there are many companies scaring customers into buying something. This reduces the industry’s credibility and is damaging. It’s better to educate, and for the right reasons.

Ricky MagalhaesOn your point, Ricky (pictured right), it does appear every service provider is offering a solution. Is this overkill and just a way of making a fast buck?

RM: I’d say so. Very few companies can offer a solution in this space and are just chasing a fast buck for sure. It takes a strong pedigree and experience, and some creativity to get the people, process and required technology implemented. Most providers are just jumping on the bandwagon and have no idea about data protection – they’re going to hurt themselves and the vulnerable customers that listen to them.

AF: In terms of GDPR, there are a small number of certified practitioners in the Channel Islands. C5 has invested in ensuring we have one, my co-Director in Guernsey, Matt Thornton. We’ll continue to keep on top of the regulations and use our qualifications and experience to help our clients on the journey to being compliant with GDPR. I’m aware that a lot of providers might see this as the new FATCA – regulatory requirements that need a solution – in this instance, however, there isn’t a one-size-fits-all approach; technology is only part of the jigsaw.

For jurisdictions that are acutely aware of reputational damage, is cyber security the biggest issue keeping tech people awake?

AF: Cybersecurity hits the headlines regularly and is a threat to be taken seriously. Due to the potential impact on businesses, it may well be the biggest thing keeping some tech people awake. However, it’s far from the only thing. Data leakage, for example, whether accidental or malicious, would cause far greater reputational damage than a cyber attack on a well-prepared organisation that recovers quickly.

RM: I’d agree with that. Cyber is one of the issues, but relating the risk to the threat vector and truly understanding the threat is key. Cyber is just one of the things that people are focused on right now. The reality is there are a stack of things – migration to cloud, agility and flexibility –that are just as important as cyber security. Cyber should be woven into the fabric of IT but shouldn’t be the only thing on the agenda as too much focus on this will detract from other important elements.

TM: Personally, I think if it’s keeping you awake then you’re probably not doing enough to protect your technology and assets! However, this is an ongoing problem and not a one-off issue. Data, and the security of it, is only going to become a bigger issue for all of us.

Much time, effort and money is being poured into technology – but are the Channel Islands developing the right skill sets for the future?

RM: Not yet, but we’re getting there. I believe that the islands should invest in training data scientists, artificial intelligence experts, robotics engineers and makers, automation experts with some cyber capability intertwined.

A focus on renewable technology – solar, wind, wave, tidal and other renewable energy tech – together with healthcare tech and Internet of Things [IoT] are also a future. We seem to be solely focused on fintech and traditional development with a bit of cyber, but there’s hope.

Green shoots are showing, with some great initiatives that Digital Jersey has been promoting. C5, Logicalis, JT and some of the other tech companies have done a lot to move this forward, but more can be done in areas such as IoT and healthcare. Innovation is investing in our future. 

TM: I think we have a better idea of what we need now, and an Education Department that understands the challenge and is working hard to address it. But it takes time to develop these new skills so, in the meantime, we’ll have to keep bringing in external resources that have the expertise we need. I’m glad that the States of Jersey is supportive of issuing licences to the best off-island candidates to help us improve our skills base.

SB: I think Digital Jersey is doing a great job with its code schools and mentoring. All the schools on the island are playing their part too. The main problem the islands have is recruiting and keeping talent. Highly skilled IT specialists are obviously in great demand all over the world and the variety of work is limited in a small island – we don’t have a large gaming industry or high-level scientific research. Specialists in those areas and others will obviously have to work abroad.

AF: I’m afraid that, in my opinion, we’re absolutely not developing the right skill sets. We don’t have a great story for school leavers. At C5, we’ve taken on a range of young, enthusiastic recruits from school to graduate level and this has been extremely successful. However, as an island, there aren’t enough education options after school that are relevant to the increasing global technology demands. 

It’s also essential for learning to be aligned with industry trends rather than pure academia in order for our future workforce to be better prepared. I’m excited to support the Beaulieu Institute of Technology in whatever way I can – more of this type of approach, where there’s a blend of education and practical learning, will help those wanting a career in technology to develop relevant skills without having to go off island (and not come back). 

Whilst the attitude for a generation of school leavers unsure of their career options may have been “I’ll just get a job in finance”, I would love this to be “I’d love to get a job in technology”. Fostering entrepreneurship and awareness of technology roles (not just coders) in schools will help attract more people to a growing and very exciting industry.

The City of London is calling for a digital skills visa – given the clampdown on immigration, should the islands be doing the same?

AF: Yes!

TM: Earlier this year, Digital Jersey worked successfully with the Community & Constitutional Affairs Department to amend our immigration policy for non-EEA workers to include technical skills for the first time in the criteria for the issuance of visas. We’re continuing to work with the Population Office to improve the process for issuing licences for digitally skilled off-island workers to take up roles here and are already seeing excellent results.

SB: Jersey’s population is already large, so it’s a difficult problem to solve. It would be better to train and recruit locally, if possible. Also, we live in an age where remote working is becoming the norm for IT. Nearly all of the large IT companies allow remote working, and some very successful companies only have remote workers. People don’t need to physically relocate to the islands to work here.

RM: I believe that the islands should fund people to come here and stay here and create new industries. If we don’t aggressively do this, we will suffer in the future. We’re living in a highly competitive space, and finance has a short life left, so we need to pivot and adapt.

Finally, what in your view is the biggest opportunity in technology in the Channel Islands?

RM: We’re a small, focused market, with the capability to reinvent ourselves. I think robotics, automation and analytics is something we could learn and offer to others globally as a service. The cyber wave is mid-swing, so almost past us. The future is in healthcare, blockchain, robotics, automation and things that are smart, like IoT. If we engaged vendors such as Tesla and attracted them to invest in this closed ecosystem, and we became the ‘smarts’, we could achieve a lot.

SB: I’d say modern trust and corporate services administration software [presents the big opportunities] – a great example of this, and admittedly a shameful plug, is PlainSail Wealth. That said, it’s difficult to predict – there are lots of opportunities in the Channel Islands and people with good ideas. Businesses need to take more risks and encourage entrepreneurialism.

AF: Top of my list would be artificial intelligence, machine learning and automation, leading to better security, customer experience, service and efficiency.

TM: I don’t think anyone can predict one area of success. Although emulating a focus on a few specialisms in finance, Digital Jersey is specifically focusing on digital health, fintech and IoT. But regtech – the use of technology to improve our regulatory processes – should be a key focus for the whole industry.


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