What is Finance for Guernsey?
Finance for Guernsey was established in early 2016 with the aim of understanding the funding issues impacting local people and local businesses. The motivation was from hearing more about these issues including islanders being unable to get onto or progress up the property ladder, entrepreneurs and SMEs struggling to get the necessary finance to establish and grow business ventures as well as the challenges facing local corporates and businesses in the finance sector when setting up and maintaining banking relationships.
Finance for Guernsey was established to investigate the issues further and then identify solutions based on real evidence obtained through extensive market research.
How is it being financed?
Funding has come from leading, locally-based entrepreneurs and businessmen from a wide cross-section of industries. All are committed to the island and are willing to invest to ensure the future success of Guernsey. The initial fundraise has been used to commission independent, specialist market research and seek professional advice on the potential options. No-one investor holds more than 10%. A second round of fundraising will then allow key personnel to be appointed to move the project forward from an idea to concept and through to fruition.
What are you doing to better understand the financial needs of islanders and local businesses?
Extensive market research was undertaken using an independent market research company, which specialises in financial research. Three online questionnaires were created to identify the issues facing individuals, businesses and the fiduciary sector.
More than 400 islanders completed the surveys providing valuable insight into their experiences of banking services in Guernsey.
The survey found that 73% of personal respondents felt banking services in Guernsey could be improved; this view was echoed by 87% of business banking respondents and 81% of fiduciary respondents.
Without the experiences of islanders, it would have been impossible for Finance for Guernsey to truly understand the concerns and frustrations and identify a potential solution. Highlights of the results are available on this website.
However, the research is ongoing and we welcome any feedback through our contacts page. In addition, Finance for Guernsey will continue speaking to the business community to gain further qualitative insight into their financing issues and concerns.
What are the possible outcomes?
The results have been used to back up the anecdotal evidence that a lack of access to funding is having a detrimental impact on islanders and local businesses. Prior to the research being completed, Finance for Guernsey believed there were four possibilities:
A bank – locally owned and universally accessible to anyone resident in the Bailiwick, whether they are looking for a current account, needing a mortgage or wanting capital investment to establish or grow a business.
A fund – locally managed and funded by local investors. What type will depend on the research results but it could be used to invest in start-ups or help first time buyers.
A broker – to facilitate lending between a third party financier (either individual or institutional) and islanders. As with a fund, what type of lending will be determined by the identified need.
Nothing – should the research conclude that there are no funding issues and that the finance options currently available are sufficient.
It is clear from the research that a Guernsey bank is the preferred solution and Finance for Guernsey is now working on a business plan and a formal application for a banking licence.
Who will you help?
There is demand from both individuals and corporates and so our plans are for a locally owned and universally accessible bank open to anyone resident in the Bailiwick.
A bank has previously been suggested by the States of Guernsey – what is their involvement?
A bank is not a new concept with the first one, known as Guernsey Savings Bank, being established in 1822. It was suggested in 2015 by Treasury & Resources minister Gavin St Pier and was also included in a number of manifestos ahead of the 2016 deputies’ election.
However, in November 2016, the States of Guernsey confirmed that it had no intention to progress plans to establish a local retail bank. This was clarification was welcomed by Finance for Guernsey as which believes that the private sector is best placed to deliver an effective solution to islanders needs for transactional banking and the availability of credit.
However, Finance for Guernsey will continue to engage with the States of Guernsey as plans evolve. A new retail bank is a critical part of the island’s economic development for the longer term, so it is essential that an open dialogue with the States is maintained.
How do you establish a bank in Guernsey?
A banking licence would need to be issued by the Guernsey Financial Services Commission, however as it is not the lead regulator on any other banks, it is anticipated that new legislation may have to be drafted.
A business plan is being created and Finance for Guernsey has already held a number of meetings with the GFSC to understand in more detail the regulatory requirements and the process of applying for a banking licence.
What timeframe are you working to?
Work is currently underway on the business plan for the bank. It is hoped that a formal application for a banking licence will be submitted in the first quarter of 2017. Based on the experiences of challenger banks in the UK, approval can take up to 12 months and so it is unlikely that the bank will be open for business until 2018. You can be added to the mailing list through the contacts page and follow Finance for Guernsey on social media for regular updates.