When EY moved into 62 Forum Lane in Camana Bay in November 2007, the Cayman Islands economy and its financial services industry was booming. One year later saw the onset of the global financial crisis. During the firm’s decade at Camana Bay, it has experienced a complete economic cycle.
“There’s no question that there was a retrenching,” says EY Regional Managing Partner Dan Scott of the effects of the financial crisis on the business and the country. “But I think as we look at it today, we are in a really good position as a result of having done that. As we look around the globe, the role Cayman plays in the global capital market continues to be significant.”
Cayman provides a neutral platform to bring together investors from different geographies, different legal structures and different tax regimes to allow for onward investment of capital and ultimately the return back, Scott says.
“And we do so in a manner that is transparent from a regulatory standpoint and that also provides tax transparency,” he says. “For example, investors are tracking and reporting their earnings back in their home countries, the companies that are receiving the capital are doing the same in their home countries and the investment manager, who is providing the advice, is also doing the same thing.”
Scott thinks Cayman is one of just a few international financial centre jurisdictions that, coming out of the financial crisis, has truly embraced best practices in global standards.
In many cases, he believes Cayman leads those efforts from a tax transparency and regulatory standpoint.
People may not always appreciate the role Cayman plays in bringing together global investors, investment managers and companies that need the capital for a wide range of important ventures, Scott says.“The good news is the professional services firms like ours have stayed focused and understand that what we do is critically important to the confidence in the global capital markets,” he says. “What we are operating here in Cayman is absolutely world class. Ultimately, if I had to reflect on where we were pre-financial crisis as compared with where we sit today, we are certainly stronger and more broad-based as a firm, with a wide array of offerings delivered by a group of outstanding, talented professionals.”
Ultimately, if I had to reflect on where we were pre-financial crisis as compared with where we sit today, we are certainly stronger and more broad-based as a firm.EY Regional Managing Partner Dan Scott
Lessons were learned through the financial crisis and one of those lessons was that change is inevitable, Scott says. “There’s no question as we look forward, change is going to continue to happen. What has really provided EY with a great foundation is our ability to adapt to change, not only after the fact, but also in many cases on the forefront of that change to understand what the next big challenge will be, and how to address the issues it brings.”
Brexit and the election of Donald Trump as the president of the United States will undoubtedly bring about changes to the financial services industry, Scott says.
“For us, it is really just about staying focused and understanding what’s happening and how we can support our clients,” he says. “We do so continuing with the fundamental principles we’ve always had, including transparency, a focus on regulations and applying strong systems to provide proper data.”
Another big change Scott sees coming revolves around financial technology, also known as FinTech. These innovations, which include applications like Blockchain and Bitcoin, also involve processes, products and business models in the financial services industry that will allow for multiple financial services providers to offer end-to-end transactions through the internet.
“That is going to be quite a differentiator and disruptor,” he says. “It’s something Cayman has to start focusing in on in a very real way. When you’re talking about banking relationships or about things like peer-to-peer lending, how do you make sure that you provide the right platform, provide the right advice and provide the right legislation around FinTech?” Scott says Cayman needs to build the right “ecosystem” around FinTech so that regulators can be confident there is sufficient oversight.
“We need to ensure people are complying with the know-your-client and the anti-money laundering regimes, but how do you do that when these transactions are happening in a millisecond across platforms that operate from various parts around the globe? That’s the next big challenge EY is focused on and I think the jurisdiction is starting to focus on.” Although there will always be challenges, Scott continues to believe the future for Cayman’s financial services industry is bright.
“When you see things such as the World Bank using Cayman financial services products in order to facilitate their investments to help develop certain very poor countries, you know that you’ve done something right and that you’ve built a platform where there’s confidence in what’s happening,” he says. “You have a legal system and a court system which supports that and so for us, as I look at Cayman, I continue to be very bullish about the opportunities in the future.”
One of the benefits of EY’s move to Camana Bay nearly a decade ago has been adding to the quality of life of employees, Scott says.
“In order to be able to do what we do, we have to attract world-class talent,” he says. “World-class talent looks for a place where they’re going to be able to live, work, play – dare I use the phrase that Camana Bay uses? There’s an author by the name of Thomas Friedman, who wrote a book called “The World is Flat,” and what he contends is that the country that is able to attract the best talent is the country that will continue to thrive – I firmly believe that.”
Having offices at Camana Bay helps attract and retain talent, Scott says. “When we think about what our assets are, it’s the people who sit in our office,” he says. “That’s all we have. Every night they leave to go home and they have to decide if they want to come back the next day. In order to attract and retain talent, you need to offer quality of life.”
Scott thinks back to his initial meeting with Dart representatives, who were offering just a vision. “They had a vision to make a difference, make an impact in a very positive way, and do something that’s high quality and meaningful. That is aligned with what we stand for as a firm – that’s what really attracted us to move to Camana Bay.
“And as we look back, I’m very pleased that we did it.”