July 15, 2020 Intra-island Cooperation in Turbulent Times

During a time of unprecedented uncertainty, businesses such as Oak are adapting quickly to maintain high-quality client service across their operational jurisdictions. In the latest eprivateclient Guernsey Report, Paul Schreibke, managing director of Oak in Guernsey discuss how operations are reliant on the effective collaboration of risk, compliance and IT functions across the Channel Islands during this difficult period.

Whilst the financial services industry has seen market crashes and economic crises before, the impact of COVID-19 and the consequent government-enforced lockdown in Guernsey and other Crown Dependencies has resulted in industries in the Channel Islands having to rapidly adapt their operations to meet the changing demands of the crisis. In these challenging times businesses need to provide clear and consistent information to internal and external stakeholders as they analyse the extent of the impact of the ‘corona crash’ and potential future market crashes. They need to be able to reassure clients that they are available and it is business as usual, even if that means teams are working remotely. It is also important to ensure that staff feel they are in a safe working environment and have the full support and help they require.

Cooperation from the start

During the pandemic, Channel Island governments have been consistent in providing regular updates and supporting businesses locally with various positive initiatives, recognising the need to work together in these unpredictable times. Oak’s offices in Guernsey and Jersey have responded to this pandemic using different yet equally effective approaches, in the same way that Oak believes every client requires a customised solution. Every situation is different and that’s key to the way we approach things as a group. While each jurisdiction has its unique style, this is tailored to ensure the end result is what’s best for our clients.

Multi-jurisdictional businesses tend to implement varied styles of working in each office. At Oak we ensure that each office has its own approach but also applies the same strategic thinking, especially in this particular case when implementing remote working measures that comply with different government requirements while also supporting our employees across the group. In addition, businesses should be guided by daily updates and guidance from the respective governments and financial services institutions in the locations in which they operate such as the Jersey Association of Trust companies (JATco) and the Guernsey International Business Association (GIBA).

Adopting new technologies

Microsoft recently announced that 2.7 billion minutes were spent on Microsoft Teams on 31 March alone – evidence of the exponential increase in the use of video conferencing tools during this pandemic. One of the most important things we needed to consider as a multi-jurisdictional business in this crisis, was our IT infrastructure.

An organised and intuitive system enables businesses to remain fully operational once the inevitable scenario of working from home presents itself. In the background, whilst day to day business was running smoothly, Oak had already started working on its IT infrastructure. A key objective right from day one of Oak’s formation was to bring teams across our offices in each jurisdiction together, (Oak has offices in Guernsey, Isle of Man, Jersey, Luxembourg, Malta and Mauritius). From the outset, this was the answer to enable us all to work together effectively, no matter where in the world our teams are located.

Whilst we are living through a pandemic the communication and IT situation has changed from liaising weekly to daily. Colleagues from our Guernsey, Isle of Man and Jersey offices have coordinated to form Oak’s COVID-19 crisis management team and have been in contact daily since February to formulate and implement a response to the crisis. Within a timeframe of approximately 10 working days, the pan-island team had organised and executed home working capability for all employees across the group and launched Microsoft Teams and SharePoint to enable greater cooperation across our business. Collaboration between risk, compliance and operational teams across jurisdictions enabled us to maximise the use of new technology to communicate with clients, employees and other key stakeholders to help manage the potential impact of the crisis to our business ahead of going into lockdown.

A highly organised approach and our continued investment in IT infrastructure enabled the crisis management team and employees to focus on mobilising business continuity plans. This has meant that our customers have experienced little or no disruption to our daily dealings with them prior to the pandemic.

Factoring risk and compliance

When implementing changes in infrastructure and introducing a working from home policy, businesses need to be mindful of the potential risks including cyber security risks as a result of the changes. Given that online threats in the UK have risen as much as six times their usual levels since the COVID-19 pandemic arrived, Oak updated the home and mobile device policy, sent reminders on Cyber Security and Data Protection, bolstered our Cyber Security capability and continues to look at tools to further improve our resilience. A positive outcome from the pandemic is the acceleration of IT and Cyber Security projects that were already in the pipeline.

 Despite the allowances made to substance requirements by tax authorities in both islands during the pandemic, Oak did not need to change our standards of practice in corporate governance - we simply worked off the technology implemented by the team and held virtual meetings over Microsoft Teams instead.

Employee wellbeing

Remote working brings with it new challenges, however barriers of communication can be broken down and the challenges of working in a multi-jurisdictional team can be overcome. This is achieved through regular crisis management and management meetings across businesses, by implementing new solutions and adapting processes to maintain high levels of operational effectiveness across the different jurisdictions. Oak’s strategy is focused on the well-being of our employees and we have adopted several measures including a buddy system, to ensure we are supporting them during this crisis. Using the technology recently implemented, we make sure that teams are accounted for and their wellbeing is cared for. We’ve even set up weekly, virtual socials to encourage a sense of community and togetherness.

 Our focus is on creating a family-feel, people-led culture for our employees that ensures our clients continue to receive a quality, personal and cost-effective service. This allows us to grow steadily, placing an emphasis on client service and retention to create value in the business without a need to be overly ‘cost conscious’. Maintaining strong relationships with clients is critical to our business so we firmly believe in a personal approach that is supported by technology.

Futureproofing

Having recently celebrated our first year of trading and operating as Oak Group in multiple jurisdictions, Oak embraces a new way of structuring a fund and fiduciary business rooted in long-term investment from local investors in Jersey and Guernsey. The business has funded its acquisitions through investment from a Guernsey-based local listed fund. This committed capital demonstrates that investors are planning for the long term, expecting a 12-13% internal rate of return (IRR) rather than a quick turnaround and the 25-30% IRR that could be expected with private equity.  With long term investments at the centre of the business model, the challenging climate presents itself as an opportunity of growth and development.

 In the long run, the firms that survive the pandemic will have to master a new environment as the crisis and the response to it accelerate the adoption of new technologies. Change is inevitable, but the shift in technologies presents great opportunities for our industry to be more efficient both in cost and resource. The exit path from lockdowns in the Channel Islands will be precarious, with uneasy clients, a stop-start rhythm that inhibits efficiency, and tricky new health protocols. Here at Oak, we remain confident that by working together as a unified group we will successfully navigate what is sure to be an interesting new normal post COVID-19.