SENIOR figures from Guernsey’s funds and technology sectors have welcomed the announcement of the ground-breaking first commercial deployment of blockchain technology in the private equity market.
Northern Trust has worked with tech giant IBM, the States of Guernsey and the Guernsey Financial Services Commission to enable the market-leading technology locally.
‘This is just another demonstration of Guernsey innovation and ability to use latest technology and is something that Gifa is really positive about,’ said Paul Smith, a member of the Guernsey Investment Fund Association’s executive committee and an independent non-executive director in the industry.
He particularly welcomed the flexibility and support shown by the States and the regulator in enabling the use of the technology – ‘this shows that Guernsey is the place to do this sort of business’, he said.
Mr Smith said his industry was expecting some similar moves to be developed at some point.
He said that it was positive for the international transparency agenda and the challenge for the local industry would be to build on the development through promotion.
‘It is significant that two global organisations have chosen Guernsey to do this,’ he said.
‘This will encourage other firms to look at this kind of technology and possibly make use of it themselves as the ground has already been broken – and this makes us an ideal choice for this.
‘Personally I envisage Northern Trust capitalising on this transformative move.
‘It could lead to funds redomiciling, or the company attracting new mandates, while how soon before others start to take advantage depends how far down the road they are with this technology.’
Mr Smith said that just as the island was recognised as a centre of excellence for private equity funds and administration, this would be seen in the industry as another step forward for Guernsey.
‘This is now a crucial moment. Potentially there are a lot of other uses – you might get people looking to use this for other funds, perhaps specialist, niche funds – and it is nice that all the talk about fintech in Guernsey has come to something real and practical.
‘We need to build on this, particularly at events like the [London] Funds Forum.
‘This will help portray Guernsey as an innovative place for funds business and the timing is opportune.’
Marc Laine, former States member and managing director of technology consultancy C5 Alliance in Guernsey, said the development was a ‘game-changing move for Guernsey’.
‘This highlights that real opportunities exist in our financial services sector to take advantage of disruptive fintech innovation,’ he said.
‘This fund, domiciled locally, I expect will attract international attention and encourage other businesses to deploy similar technology.
‘New financial services business models are emerging and this is evidence of the real progress of fintech as it drives the positive disruption of traditional financial services.
‘The development of this pioneering solution is testament to the States of Guernsey’s hard work and commitment to financial services technology and the progressive approach by the regulator.’