19 May 2022
How Jersey is Adapting for Fintech-Driven Future
Jersey can boast a good track record when it comes to digital innovation and fintech. We were home to the world’s first regulated bitcoin fund; one of the first jurisdictions to adopt a regulatory regime for virtual currencies; and we were one of the first jurisdictions in the world to make fibre-to-home available to 100% of broadband users.
It’s thanks to hard work and forward-thinking across the industry and indeed the island that Jersey is so well placed in the fintech space – the 4th annual Digital Jersey TechAwards held in March provided a showcase for the wealth of digital and technological expertise on the island, whilst the fact that the island continues to have the fastest broadband connectivity in the world, means we have the infrastructure in place to back up our digital aspirations.
But if the past few years have taught us anything, it’s that our industry is one defined by change – and that change is being driven by digital progress.
In the midst of the pandemic, McKinsey found, for example, that digital adoption amongst businesses had accelerated forward around five years in the space of a few weeks, through remote sales channels, enhanced client interfaces and digital payment systems for instance.
The rise of sustainable finance is also changing the playing field, bringing with it a raft of new digital requirements, opportunities and synergies, as we discussed in an interview with FinTech magazine earlier this year – “Fintech plays a substantial role in the growth of sustainable finance while sustainable finance is accelerating innovation in Fintech.”
The pace of change is relentless and sustained, and as a jurisdiction that values progress and the role digital plays in delivering top quality service, it’s vital that we maintain our role at the cutting-edge of the fintech revolution.
It’s why, having initially launched a fintech strategy in 2016, we have sought over the past year to evolve that strategy in response to a rapidly changing environment. The strategy recognises how fintech, backed up by a sustained and robust regulatory framework, can support our financial services industry and put us in a strong position for the future.
Our ambition remains for Jersey to be ‘the easiest IFC to do business with remotely in a digital world’.
However, our new strategy takes a more flexible approach, prioritises being adaptable to the needs of the future of the financial services industry and recognises that technology moves quickly. It reflects the changes that have occurred at both an industry and a global level and acknowledges the Government of Jersey’s refreshed Financial Services Framework, which puts the opportunities created by fintech and technologies as a key strategic priority.
One of the main updates is that we are now working to two overarching strategic ‘drivers’ as we evolve our proposition: ‘enhancing client experience’ and ‘driving efficiency’. These drivers have been put in place to guide the way that we look at fintech going forward, ensuring that Jersey’s finance industry can deliver world class service to international clients in an increasingly virtual world, and empower firms to support greater productivity and satisfy growing regulatory and reporting requirements.
Underneath these drivers, the new strategy introduces three new strategic ‘pillars’: Compliance & Risk, Productivity, and Interaction. These pillars are focused on being adaptable to the needs of the future of the industry and the ultimate outcome and application of technologies, rather than focusing on specific technologies themselves.
Over the coming months, we will roll out an action plan in accordance with these drivers and pillars – including through our events, research and skills workstreams. We’ve already made good headway, such as through our FinTech Demo Day, our Digital Matchmaking initiative and our new Maturity Ladder review, and there is more on the way.
Crucially, though, whilst this is Jersey Finance’s Fintech Strategy, it exists in the context of the island’s community, and there are other players working collaboratively to maintain Jersey’s status as an attractive location for fintech firms. For instance, under the umbrella ‘Jersey for Fintech’, we continue as an industry to work closely and collaboratively with Government, Digital Jersey and Locate Jersey to promote Jersey as the ideal location for fintech firms to establish, grow and flourish.
Of course, we need to remain alive to the fact that fintech will continue to evolve rapidly. At the recent Fintech Update, for instance, Dr Sian Lewin, co-founder of RegTech Associates, provided insights into the huge growth anticipated in the regtech space, including the predicted growth of areas like Cyber Risk Quantification. When you consider there are 257 regulatory updates published globally every single day on average, it’s clear that regtech solutions will not only be useful in the future financial services landscape – they will be essential.
Our new strategy enables us to take a flexible approach, ready to respond to future digital opportunities, such as those in the regtech space. With the 3,000 professionals employed in the digital sector in Jersey, and 100 digital jobs created each year, we have the expertise on the island to take advantage of innovation and ensure that we remain at the forefront of integrating fintech to our overall financial services proposition.
Over the past five years, financial services firms in Jersey have made good progress in pushing themselves up the maturity ladder in terms of technology adoption. However, continued movement up that ladder is absolutely crucial, now more than ever – and our new fintech strategy provides the guiding parameters to ensure we can achieve our aspirations, without compromising at all on our foundation of regulatory excellence, and retain our position as a leading, fintech-driven IFC.