Redwood Compliance Jersey managing director Will Paine tells Emily Moore how compliance can be just as important as technology and product innovation in driving growth
THINK about business growth and it is quite likely that conversations will focus on product innovation, new service lines and how technology can help to maximise productivity.
But sitting behind this, says Will Paine, is a function which can help not just individual companies, but also the Island as a whole, to become more competitive.
“When implemented well, compliance can become an enabler for a well-run business, allowing it to proceed with its strategy with clarity and confidence, while building a sustainable business that not only delivers for its clients today but also gives clients confidence in the future,” said the managing director of Redwood Compliance, Jersey.
“Good compliance can definitely boost competitiveness. Having an effective compliance function enables a business to focus on its strategic objectives without worrying about whether it is meeting its regulatory obligations, putting clients at risk or opening Jersey up to financial crime.”
Indeed, as Will explains, strong compliance, linked to regulatory developments, is key to “protecting Jersey’s reputation as a leading international finance centre”.
“Ahead of the Island’s latest Moneyval inspection in 2023, we saw a number of regulatory changes and, since the inspection, we have seen a real drive from industry and government to retain our competitive edge as an international finance centre,” he expanded.
“That drive prompted the launch of the government’s Time to Win initiative and, at the heart of that, are further changes designed to modernise certain aspects of our regulatory framework to boost that competitiveness and make Jersey an easy and attractive jurisdiction in which clients can operate.”
While welcoming the changes, Will adds that such developments have propelled compliance teams into the spotlight.
“There is a key role for compliance within Time to Win because professionals in this area need not only to understand the regulatory changes themselves but also to be able to work with people across their organisations to ensure that employees also understand the changes and are able to implement them in an effective way which aligns with the business strategy and makes the business attractive to clients.”
This, he acknowledges, can be challenging, particularly given some of the recruitment struggles which the Island is facing.
“We live in an island where around half of all working adults are employed in financial services,” he said. “This means that we have a large number of jobs and a limited pool of talent, which can make it difficult for organisations to attract and retain talent.”
And this, he adds, has created a demand for businesses such as Redwood Group, which was originally founded in Guernsey ten years ago by James Wood, who is also the chief executive.
“James saw that there was a gap in the market to provide compliance services predominantly to financial services businesses but also to law firms, accountants, estate agents and not-for-profit organisations which are covered by anti-money-laundering regulations,” Will explained.
Over the past ten years, Redwood has continued to address that gap, evolving its services in Guernsey to include company secretarial and HR support as well as compliance, and also opening offices in Jersey and, most recently, Ireland.
“In each case, there is a common theme of providing services to the industry, offering specialist expertise either over the long term or to support with a particular project or to provide cover where there is a resource gap,” explained Will, who joined Redwood a year ago after working for many years at a large, multinational bank during which he gained experience in everything from client-facing roles and operations to risk and compliance.
“While many companies offer compliance services, we pride ourselves on being able to offer expertise gained from practical experience working in the industry,” he said.
“That enables us to not just offer advice, but also deliver the practical solutions that align with a client’s business objectives, allowing them to proceed with their strategy, knowing that they are complying with the regulatory expectations.
“As regulations continue to evolve and become more complex, firms value having specific expertise in specific areas, and it isn’t always practical for them to employ someone full-time in each area.
“This is where our team of consultants, who have experience in industry, in working for a regulator and in audit, can come in, providing resource at any level – from an administrator to a key-person role – which is appropriate to the client.”
The support offered by Redwood is, he adds, particularly sought after when firms are responding to regulatory changes or implementing new technology, something which he believes has particular potential to evolve the compliance function.
“Technology is a massive enabler for compliance,” he said. “By digitising some services, you can greatly enhance both your efficiency and accuracy. However, there are some challenges associated with implementing technology and, in particular, organisations need to make sure that they have the right governance and oversight in place to ensure that the outcomes delivered by the technology are aligned to both regulatory and client expectations.”
There is also, he recognises, a “disruptive” element to implementing technology.
“Changes of this nature often impact the individuals serving the clients as well as the clients themselves, so firms have to consider when the right time is to implement the technology,” he said.
“Critically, whenever you do it, you have to understand what the tool is doing and how it is operating. You also have to make sure the right controls are in place, so that if the technology does not work as intended, the issue would be identified straight away.”
Despite the challenges, Will has no doubt that over the next 12 months, technology will impact many areas of compliance.
“In order to remain competitive, to attract and retain clients, I have no doubt that more firms will adopt artificial intelligence to remove some of the more straightforward administrative sides of the compliance function,” he said. “And that will have an impact on the skills required, as the people working with it will need to have oversight of that technology.”
While technology may shape some areas of the role, there are other aspects, he says, that will not change.
“An understanding of the regulations, including AML, sanctions, terrorist and proliferation financing risks, and how to apply judgment within the ‘grey areas’ of the regulations, remains critical,” he said, “as does good governance and an understanding that compliance is not just about complying with the law.
“If you get it right and embed compliance effectively within your processes, it can inform effective decision-making, give directors and board members confidence that they are exercising their duties and not creating any undue risk through their operations, and enable that.
Sustainable, long-term growth which will support both individual organisations and Jersey’s reputation as an attractive and reliable IFC.”
