Jersey’s success as an international finance centre (IFC) is not accidental and the industry continues to adapt to the changing landscape and demands of the industry.
Looking forward, we see challenges on the horizon, not limited to the financial services sector but for the wider economy. As a government, we have established a future economy programme, with the vision of Jersey being a consistently high-performing, environmentally sustainable and technologically advanced small island economy by 2040. The future economy programme will set out the framework for sustainable growth to 2040 in an economic strategy, to be published later this year.
Government has a role to play in improving digital skills and knowledge. In 2022 the Government of Jersey launched the Digital Education Strategy. Delivery of this work will be key for the financial services industry as the strategy focusses on ensuring the skills of our young people are relevant, to firmly embedding the need for development of digital skills within education providers, so that our future workforce is appropriately fit for purpose. The financial services industry can only learn and benefit from this initiative.
Adoption of technological solutions will remain a key focus for the financial services sector. Emerging technologies will help the industry combat some of the challenges they are facing. In July 2023 the Assistant Chief Minister with Responsibility for Financial Services made an amendment to the Money Laundering Order to clarify, amongst other things, that a digital identification system that complies with FATF Guidance on Digital Identity (published 6th March 2020) is an acceptable means of complying with identification obligations. We hope that this change – effective since 1st September 2023 – provides industry with clarity and confidence to embrace emerging technologies which in turn will streamline processes and positively impact the end user.
Government is supportive of wider initiatives developed in response to emerging trends. In addressing Jersey Finance’s recent publication on the tokenisation of digital assets, Government is working closely with industry partners at the Jersey Funds Association (JFA) to explore how Jersey might embrace this opportunity, while maintaining its position as a well-regulated and respected jurisdiction.
Supporting digitisation is also an area of focus for the Jersey Financial Services Commission (JFSC). The JFSC’s strategic framework 2021-2024 identifies harnessing technology and influencing the digitalisation of financial services as a priority. We welcome the opportunity to work closely with the JFSC to be an enabler of digitalisation for the benefit of the financial services industry and the clients we service.
Another area in which the Government sees both challenges and opportunities for the finance sector relates to sustainable finance. Government recognises that green skills will be necessary to allow Jersey to maintain its leading position as a premier IFC with a reputation for delivering expert and bespoke services to its clients.
Jersey Finance is supporting the industry’s own upskilling in green and sustainable finance. Earlier this year Jersey Finance launched a sustainable finance resource hub (Sustainable Finance In Jersey | ESG | Jersey Finance). This shares industry knowhow, details of relevant sustainable finance educational courses and seminars. Jersey Finance has also partnered with the Chartered Institute for Securities and Investment to allow its members to access the sustainable finance course on a discounted basis.
In addition to this, Jersey Finance has become a member of the UN Financial Centre for Green which provides educational material and access to shared expertise. These are all important ways in which the industry can upskill and adapt to change to enable it to maintain its leading position as a well-respected IFC.
Industry itself continues to embrace the changing landscape by engaging with courses on offer. Within local industry an increasing number of individuals have undertaken the Cambridge University Sustainable Leaders course or the equivalent. We have also seen in the last year our finance industry creating new environmental, social and governance (ESG) roles and appointments, as well as adopting ESG into their operational and risk models and board constitutions and governance. This is bringing practical understanding and experience to these businesses and helping upskill their staff and reflects the industry’s understanding of the importance of this subject.
Government is also working to ensure its employees have the skills needed for the future. It has created an educational and awareness programme for its staff, including a decarbonisation newsletter and carbon literacy training course. While this remains a pilot scheme at this time, uptake has been positive and Government will look to roll this out across the wider organisation. In June 2023, the Carbon Literacy Project also approved the delivery of the carbon literacy course for the wider business network, extending the scope of this educational piece beyond Government to support the wider community.
The importance of the emerging sustainable finance agenda is equally recognised by the JFSC, as the regulator. In 2021, the JFSC was accepted as a member of the Network for Greening the Financial System, allowing it to convene with other regulators to learn and share regulatory practices and issues, in turn, building on its knowledge and skills as a regulator.
The need to provide up to date and accurate reporting surrounding ESG presents an opportunity for digital technology and sustainable finance to combine. We are seeing industry rapidly adopt regtech tools and digital platforms to assess and report ESG performance. The industry continues to adapt, with the emergence of new businesses establishing in the Island to deliver these new tools.
As an industry, we continue to weather the storms and adapt to the changing market and as a jurisdiction, we are proud of our nimble approach and collaborative working relationship between Government, regulator and industry. Government welcomes the opportunity to continue to work closely with our partners across the industry and regulators to learn, embrace and adapt to change to be able to maintain our leading position as a well-regulated and attractive international finance centre.