The Jersey Financial Services Commission (JFSC) has announced its commitment to supporting the financial services industry with the development of a shared ‘know your customer’ (KYC) utility.
The purpose of a KYC utility would be to provide a shared tool for verifying customers’ identity. This in theory could result in reduced costs when taking on new clients, whilst introducing an enhanced degree of assurance for the JFSC as to the quality of these client processes.
The JFSC set up a working group in 2019 with representatives of Jersey’s financial services sector, in order to understand appetite for a utility of this kind and to provide a platform to understand any challenges for implementation. The JFSC also had further discussions with individual firms, trade associations and technology providers. The main findings from the working group are:
- There appears to be scope for a shared KYC utility based in Jersey which will underpin effective island-wide combatting of financial crime, while helping the sector to control costs, provided the utility is designed to meet the complex global client base of Jersey’s international financial sector;
- A successful utility will need a strong financial, governance and resource commitment from a core group in the finance sector. This group should preferably cover multiple sectors, for example a bank, a major trust company and a major funds services provider;
- The opportunity for such a core group to form and be successful is optimised if the JFSC commits up front to participate in the design of the utility;
- A period of reflection before the Government of Jersey initiates a further forum or bilateral discussion would be helpful. This will allow the rapid changes in technology to be assessed by the financial sector and for businesses to conduct informal discussions.
JFSC Director General, Martin Moloney commented:
“I have to express my gratitude to a broad range of Industry representatives who gave their time and ideas to contribute to this work. We are very enthusiastic about working with Industry to help them develop any potential utility, while remaining – as you would expect – committed to high standards of compliance outcomes to support Jersey’s strong international reputation. Jersey is well-placed to respond quickly to innovation in financial services and we look forward to watching this sector evolve.”
JFSC Press Release