By Jonathan Channing
TRUSTS have been Jersey’s bread and butter since the post-war GVA transition away from agriculture and tourism; in the 60s–70s Jersey graduated its financial services from its infancy and following the introduction of the Trusts Jersey Law in 1984 Jersey was increasingly becoming a main player in offshore finance.
This law provided the Island with a robust legal framework that built confidence in its fiduciary services and heightened interest in broader wealth management offerings. This trend led to the golden days of finance for Jersey, with banks such as the Royal Bank of Canada at the forefront of the champagne supernova that was Jersey in the 1990s – an era of prosperity for the Island.
Although this trajectory has continued, it remains anaemic in comparison to the heyday, with the exception of most recent statistics that show promise but no sign of continued yields in GVA growth of this magnitude in the long term. Trusts and broader financial services have carved out a special place in the Island’s economic well-being and success.
Today, approximately £1.1 trillion is managed by Jersey businesses, and family office activity has significantly increased, as reported by Jersey Finance CEO Joe Moynihan. At the Jersey Finance Global Horizons event, Joe cautioned: “We can’t be complacent, and we have to remember that we don’t have any divine right to have this industry.”
Jersey has successfully maintained confidence in its status as an international finance centre (IFC). Praise must be given to Carey Olsen and Mourant for their roles in building this confidence within the external world, while Jersey Finance has also played its part, albeit often hindered by political “short-sightedness”. A significant contribution has been the 2013 introduction of strategic fund categories such as private funds (geared for private equity efficiency) and expert funds (geared for experienced institutional investor efficiency). However, it’s important to remember that no single segment of the economy holds the crown.
The data age is upon us, and we must either ensure we are players in the data game or hope for the return of the heyday of the 1990s. Data trusts have the potential to open up a whole new avenue of business for the Island, leveraging its robust, tried-and-tested “legal rails”. Additional care must be taken regarding the privacy mechanisms employed and data classification to ensure compliance with AI ethics and privacy disciplines. There is an opportunity for Jersey to redefine itself as an innovative finance and data custodian jurisdiction, utilising the efficiency of tokenisation and smart contracts to enable seamless benefits for beneficiaries.
Digital Jersey has conducted a proof of concept for a “data trust” pilot focused on cycling data, which handles less commercially valuable data. This initiative creates a data pool for a select group of stakeholders. While it doesn’t fit the traditional model of robust data trust and leans more towards data sharing, it lays the foundational groundwork for future developments.
This is particularly significant if Jersey considers collaborating with a UK university to engage in the sale of anonymised health data or other valuable datasets that could inform larger jurisdictions and or commercial entities. I was fortunate enough to attend a Digital Jersey event on Data Trusts: The Healthcare Opportunity from speaker Dr Wen Hwa Lee PhD, a prominent scientist and leader in the field of biomedical research, with a particular focus on AI, data science and drug discovery. Wen had an advanced understanding of data trusts and the applications of both commercial and net societal good they can bring.
But what exactly are data trusts? Data trusts are a form of trust that, instead of managing assets, manage data, which can then be licensed or sold with the permission of beneficiaries. The idea is that data held by an organisation or a group of companies can be pooled into a valuable dataset, creating value for the beneficiaries. Examples of this data could include medical information to aid big pharma research and shorten timelines, behavioural data to understand consumer preferences, and infrastructure data to analyse and plan for future infrastructure projects, ensuring optimal usage and satisfaction based on usage patterns.
With top tech companies locked in a race for dominance in artificial intelligence, SoftBank’s CEO, Masayoshi Son, is heavily betting on AI, and giants like Blackstone are investing £10 billion into data centres in the UK, underscoring the growing digital economy. Two critical factors are emerging for AI’s success: first, the need for scalable data centres capable of handling vast computational tasks, especially with advancements in quantum computing; second, the necessity of high-quality, verifiable datasets to train AI learning models, as the efficacy of AI is not determined by the technology itself but by the quality of the data used. There are no inherently “bad” AIs, only ones trained with inadequate data. In the words of Coldplay, “Hear Jerusalem bells a-ringing”.
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Jonathan Channing works with businesses to better understand neurodiversity and bridge the communication gap that is often present in organisations. In addition to this, Jonathan has a keen interest in stoicism, broader philosophy and Jungian psychology. Jonathan also stood for election as Deputy of St Saviour in 2022.
