02 July 2018
A 'connected Guernsey' is what we need
Guernsey first emerged as a centre of trade in the late 17th century when St Peter Port became an entrepôt for goods being shipped to and from the continent and Britain.
Trade has remained an important pillar of the island's economy ever since, but today we rely on trade in the digital sense, rather than a maritime one. This is nowhere more evident than in our financial services sector.
However, there is no guarantee that this will remain the case forever. Guernsey, as other financial hubs will have to, has to evolve to ensure it retains a modern finance environment compatible with an increasingly digitised and complex world.
Encouragingly, Guernsey is perfectly placed to meet this challenge. Thanks to geographical fortune, Guernsey's position in the English Channel puts it at the heart of subsea fibre-optic cables which links data and digital traffic between the UK, Europe, the Americas, the Middle East and Africa.
The scale, resilience and efficiency of these state-of-the-art connections have allowed the financial services industry to flourish and allow it to transact business speedily and securely worldwide. Believe it or not, it makes Guernsey one of the most digitally connected places in the world and has allowed eGaming to become a major success story for the island as internet gambling and gaming businesses choose to locate their data servers or indeed their offices in Guernsey. It is also why the island could soon be chosen as a test bed for new 5G mobile technology.
Reassuringly, there is a demonstrable enthusiasm amongst local government, industry and the telecommunication providers to enhance Guernsey's digital infrastructure even further and to capitalise on these opportunities. The digital and telecommunications strategies for the island show that Guernsey is not resting on its laurels in this regard. The promise of fibre links to business districts and even faster broadband connections should be music to the ears of those in the finance industry.
After all, Guernsey has already gone a long way in positioning itself as a go-to jurisdiction for digital innovation in financial services; so needs a digital infrastructure that matches what it is preaching and delivering to clients.
Take blockchain, a type of distributed ledger or decentralised database of digital transactions, as an example. Our lawyers at Carey Olsen advised Northern Trust on the launch of the first commercial deployment of blockchain for the private equity market in 2017 for a Guernsey-based investment fund managed by Unigestion. Guernsey was also home to the first global use of blockchain technology in the issuing of notes in the insurance-linked securities sector.
Make no mistake, blockchain is a game-changer for financial services. Guernsey has been at the forefront of its emergence into the mainstream, but we would not want our involvement to end there. The island's finance industry has an appetite to do more of this type of work and to be part of an even broader fintech revolution that goes beyond just blockchain. Great on-island events like Finvention underline the enthusiasm.
In fact, what helps Guernsey is that we already have in place a fantastic Electronic Transactions Law. Introduced in 2000, the law was ahead of its time and permits the Government to be fleet of foot in introducing specific legislation to deal with smart contracts and bot to bot transactions.
Similarly, Guernsey is one of only a select number of non-EU jurisdictions – 12 at the time of writing – to be compliant with the General Data Protection Regulation (GDPR). The introduction of the Data Protection (Bailiwick of Guernsey) Law, 2017 on the same day that GDPR came into force across Europe, underlines our commitment to remaining at the forefront of international standards safeguarding transmissions of data in a digital setting.
Maintaining these standards is crucial for Guernsey going forward, as will be keeping pace with digital technology and providing the required infrastructure to enable industries, like our finance sector, to flourish while using it.
An original version of this article was published in En Voyage (Issue 11), July 2018.
© Carey Olsen 2018.