FinTech in its broadest sense simply means using technology to offer improved financial services. Most readers will have apps on their phone to access their online banking, credit cards and perhaps other financial services. This is a basic example of what FinTech is and ultimately, the goal of any new technology should be to improve the service offered. In a financial services context this tends to mean higher speed, higher security, higher certainty and (I appreciate some may be sceptical!) lower prices for the end consumer.
Jersey is looking to expand its offering in the digital sector more broadly as well as financial technologies. If we can play a part in improving the financial services offering for customers globally this can only be a good thing.
2018 was an excellent year for the advancement and development of the digital sector in Jersey and 2019 already looks set to continue on the same trajectory. We are only 6 weeks into the new year and the Island has already seen a number of exciting events and developments.
Launch of the Global Financial Innovation Network and Cybercrime Law
The Global Financial Innovation Network (GFIN) is an international network of 29 financial regulators and related organisations committed to supporting financial innovation. The GFIN seeks to provide a single conduit for innovative firms to interact with regulators in multiple jurisdictions, helping them scale new ideas on the world stage whilst more easily navigating the regulatory landscape.
As a launch member, the Jersey Financial Services Commission (JFSC) will be taking part in a pilot scheme for firms wishing to test innovative products, services or business models across more than one jurisdiction. Pilot tests are expected to run for a 6 month period starting from Q2 2019, unless the relevant regulators agree to extend them.
Whilst this pilot scheme obviously benefits firms looking to test innovative products, it is also an excellent opportunity for different regulators to collaborate and share experience of innovation in respective markets which is a core function of the GFIN. It is excellent news for Jersey and demonstrates to the world that our regulator is fully supportive of FinTech initiatives.
The States of Jersey have also adopted the Cybercrime (Jersey) Law. This is designed to implement a series of amendments to other legislation to provide local authorities with sufficient powers to deal with increasingly sophisticated technological crime and ensures Jersey compliance with international standards and treaties in this area.
While compliance may be seen as boring compared to the exciting opportunities to change the world which some promise from FinTech, being able to demonstrate that Jersey is a well-run and regulated jurisdiction is core to our ability to attract serious FinTech players.
Launch of the Digital Jersey Xchange
As was made clear at last year’s Jersey Tech Week, the digital sector in Jersey is not limited to financial services and there are an increasing number of opportunities in other areas where the Island offers a great testbed. Building on this, the Digital Jersey Xchange, known as DJX, opened in late January and will serve as sanctuary for those looking to research, develop, test and launch their digital products and services, particularly in the area of the Internet of Things.
Jersey Data Protection Week
The increased use of technology inevitably leads to innovative businesses using and storing an increased amount of user data. Jersey has long recognised the importance of effective data management and compliance with international standards on data protection.
To support this aim, and to mark International Data Protection Day on 28 January, the Jersey Office of the Information Commissioner put on a full week of events with a number of high profile speakers covering topics from cyber-security, breach reporting and individuals’ access rights.
A recurring theme of conversation amongst those present was the concern over the impact of a “no deal Brexit” on the ability of local businesses to freely exchange data with clients, suppliers and group companies in the UK. Like all things Brexit, the way forward remains unclear but a number of steps businesses can take were identified to ensure the continued free flow of data should the worst come to pass.
With all this in just the first few weeks, and much more still to come, 2019 is well on its way to being the best year for the growth of the digital sector in Jersey in many years. We are looking forward to working with our contacts in Jersey and further afield in order to assist in these exciting developments. We have launched a Global Technology and Innovation Guide covering all our jurisdictions (including Jersey) and we do see global opportunities for Jersey and other international finance centres to play a core role in FinTech and improved financial services more widely.