It has quietly revolutionised the customer experience whilst further enhancing the high standards that the Island is known for. Of all the financial sectors operating in Jersey – such as banking, trusts and funds – it was banks who first ventured into the digital realm.
CHANGING THE WAY WE BANK
This quiet revolution in banking means customers no longer have to go to their bank – it literally comes to them via their chosen device. If you ask people how they currently undertake their day to day banking, chances are the majority would answer via their device, an evolution entirely made possible thanks to the adoption of new digital technologies.
Banks are continuing to lead the way in terms of enabling customers to bank anytime, anywhere and this has changed what customers want from their banks. Their focus is increasingly less on how to make a payment or open an account but more around how we can help them do more with their money. For example, we are seeing that Financial Health Checks are increasingly popular with specialists advising customers on how to manage their household or business budgets, skills which are hugely important with the current cost-of-living challenges.
As customers embrace this new way of banking, how branches are used is also changing. The finance industry partners with the communities where they operate and given the shift online, we are seeing a natural evolution of branch design. They are now becoming much more of a community space or hub, that local businesses and people can use for activities, including meetings and hybrid working.
The development of Straight-Through-Processing has brought significant efficiencies as well. Some industry players have as many as 95% of payments going straight through the system, without the need for human verification. This is either through online banking apps that customers access, or from a front office, going through automatically with auto approvals.
TECHNOLOGY AND REGULATION
Jersey embraces the highest regulatory standards to underpin the continuation of its reputation as a leading finance centre. It is one of the things that makes us stand out as a leader amongst international finance centres in today’s industry. Jersey has high standards of regulation across all of its finance sectors including investment business, trust and company providers. These high standards are recognised internationally and give added peace of mind to investors when they choose where to do business.
The amount of regulation has increased exponentially in the last 20 years. Without the automation and technology that we have been able to deploy, we would never have been able to keep up with the pace of regulatory changes. Although the amount of regulation has increased, innovation has allowed the industry to adapt to these changes and adopt new trends such as ESG, with relative ease. Of course, these technologies are not always perfect and the industry has definitely faced challenges during their implementation but it continues to learn, find solutions and improve.
The Jersey Bankers Association, a trade body I am proud to be President of, plays a vital role in supporting some 20 banks on the Island. It acts as the voice of the banking industry when engaging with regulators, government policymakers and wider community stakeholders to foster new initiatives and innovation to help us retain the competitive edge over other financial centres.
We are currently focusing our work on sustainable finance and how the industry best supports the green transition. Although we have some way to go to become world leading in this area, Jersey is rapidly catching up and has learnt a lot from others’ successes and pitfalls. Banks can really help in driving the shift required and technology may play a big role in implementing these sustainable initiatives.
Although the pandemic was an extremely challenging time, it spurred the banking industry to accelerate much of the digitisation journey that the industry had tentatively embarked on before the emergence of COVID-19.
The pandemic forced the industry to work remotely for the first time. It proved concepts and ideas we never thought would have been achievable – or would take many more years to implement – could in fact be achieved today. We surprised ourselves with our remote working capabilities. Many people, myself included, would have been sceptical had we been asked three years ago about how we work remotely as an industry today.
In the first few weeks of the pandemic, we had the challenge of getting equipment to everyone and supporting working from home. In the end, it worked out well for the majority of our people. It has also imbued a step change in mindset across finance and banking professionals. We showed we can work in different, often agile ways and identify creative solutions to the most pressing of problems. The contemporary challenge is to make sure we do not lose this mindset of flexibility and creativity post-pandemic.
This global health emergency not only changed the way we work but also in how customers interact with their bank. From their perspective everything has become easier thanks to the digitisation that has taken place. Banking is, for the first time, available instantaneously everywhere, for commercial as well as personal banking customers. Not only is this a superior customer experience but is more efficient for banks and we are evolving our capabilities in the institutional banking arena also.
LOOKING TO THE FUTURE
There are many opportunities on the horizon for Jersey with perhaps the biggest challenge being keeping pace with our customers’ expectations. Jersey has always thrived as a small jurisdiction because it is nimble and flexible enough to adjust to new trends. Now is a great opportunity for it to build on this heritage with the implementation of new technologies. In the next decade, we will need to rethink what banking means in a digital age and explore how technologies such as artificial intelligence (AI), big data, automation, and cloud computing can be embraced, to ensure we remain relevant to our customers and communities in the future.
The last 60 years have seen the Jersey finance industry change drastically for the better. I am confident it will only continue to grow and be a leading finance centre as the evolution of digitisation throughout the industry continues.