RegTech in Jersey Closing the Gap Between Ambition and Reality
During lockdown I had a Teams call with RegTech Associates CEO Jason Boud, where we spoke of their upcoming work ‘2021: A critical year for RegTech’.
I asked Jason if we could explore the report by hosting a roundtable where we could discuss, ‘Is what is said in the report true of Jersey, and if not, why not?.’
Whether this question planted a seed is for others to answer but in the ‘RegTech in Jersey: Closing the Gap Between Ambition and Reality’ report we have something better – dedicated analysis for the Island.
Tonally, the report hits the right spot. It provides fair feedback which aligns to the experiences of the Vaiie team and our clients. Constructive feedback is provided of the role the JFSC plays and the way in which the regulator needs to evolve in order to enable growth in RegTech adoption .
The report sets the scene and tells the story of Jersey as a highly regulated International Finance Centre. The report found that 42% of the firms that supported the work are not Jersey headquartered, making the insights crucial in amplifying the Jersey message and providing important collateral for those in Jersey seeking investment from within their global non-Jersey headquartered firm.
The report centres itself around five key areas of analysis:
Prioritisation – Financial Crime, Cyber Risk (including Identity and Privacy), Compliance Management and Conduct are the biggest priorities for regulated firms in Jersey, although one could argue whether Cyber Risk is a subset of RegTech (and Vaiie plan on exploring this area as part of October’s Cyber Security Awareness Month). 84.3% of the replies cited ‘Cyber, Identity, and Privacy’ as a high priority. As a provider of electronic identity verification through our Vaiie Identify product we have solutions that meet today’s industry demand
Adoption – ‘Cyber, Identity, and Privacy’ is once again a leading adoption area, it is interesting to note the link to and dependency on data management and cloud as a RegTech enabler. Of course, it is important to note that non or low adoption does not mean that the regulatory activity is not taking place, it is that it is a more manual exercise
Awareness & Access to Information – ‘Financial Crime’ and ‘Cyber, Identity, and Privacy’ lead the way when it comes to Medium or High levels of awareness, there are some surprising low levels of awareness around information and compliance management, with workflow-based approaches to capturing key information Vaiie Onboard can certainly help firms improve in these areas
Understanding & Future Outlook – 46% of survey respondents ‘somewhat agreed’ with having a good understanding of what RegTech is and a further 31% declined to answer or were neutral in their response. Taken alone and out of context these figures could be a concern, but the report goes on to explain that the vast majority somewhat or strongly agree that RegTech is the future of compliance and that it is increasingly necessary for achieving compliance
Barriers & Remedies – Integration, regulation, costs, and talent are the top four barriers to RegTech adoption, these match the feedback from our clients. The report helpfully splits out barriers that are internal and external to firms, at Vaiie we collaborate with our clients to help them optimise processes and efficiencies gained from our solutions and are committed to participating in strategic working groups aimed collectively solving external pain points
The report identifies that significant investment is going into KYC and eIDV solutions. At Vaiie we understand the real world problems faced by our clients and provide solutions that automate journeys and reduce points of client friction. We have consulted with Jersey’s compliance community and built compelling processes based around the type of activity undertaken in highly complex international finance centres.
Awareness of RegTech and its capabilities is a mixed picture. Clearly the more advanced use cases are well understood, but the emerging areas and emerging technologies have some way to go before they reach wider understanding and engagement. With some firms citing their own limited awareness; the leading facilitator of information on RegTech solution providers being word of mouth, there is an opportunity for a RegTech community to be built, and for RegTech providers to be more active in the market.
I disagree with some of the views of the finance industry expressed in the report, when a few participants said that they cannot find solutions that meet the needs of a Jersey based firm. This is exactly what Vaiie seek to do, it is why we align ourselves to where the onboarding journey and client experience happens.
The report concludes with multiple recommendations. A number of these sit with the JFSC to act upon and deliver. The next steps, when combined, will reduce the fear of industry making the wrong choices and will highlight the art of the possible.
For Vaiie as a leading RegTech provider, the shift from technology neutral to tech positive is welcome. I do however have to disagree with Jason, with the publication of this report, Government consulting on Digital ID Systems, and MONEYVAL around the corner, it is the year ahead that is Jersey’s critical year for RegTech.
If you would like to discuss your thoughts on the report ‘RegTech in Jersey: Closing the Gap Between Ambition and Reality’ or hear more from Vaiie on the solutions we provide please get in touch.