Being resilient in 2020: Director General's statement

We began 2020 with an ambitious plan for capital investment and a demanding programme of supervisory engagement. We did not anticipate the events to come, although in our 2020-2023 strategy we did identify the importance of both our own resilience and the resilience of the Jersey financial services sector in the face of unidentified threats.

When the Covid-19 pandemic became evident in early March, we were deeply engaged in our challenging work programme to deliver our 2020 business plan. The pandemic added two new demanding tasks:

• protecting our staff and their families by moving to remote working; and
• supporting Government to oversee the compliance of the finance industry with the various public health requirements, which were essential to shield the Island.

Aiming to turn a challenge into an opportunity, we added a third important task. We launched an extended series of webinars to boost our communication with Industry, not only about Covid-19 but also on our various regulatory initiatives.

We committed as much as possible to delivering on the objectives we set out in our 2020 business plan. To this end, we devised a new way of conducting examinations: remotely. It might have seemed like a contradiction in terms but, with Industry’s cooperation, we made it work. It meant that we did not conduct quite as many examinations in 2020 as we would have wished, but we did achieve a very substantial portion of our targets. Equally, we did not quite accomplish all our capital programme goals, but we pushed most of them close to the year-end target.

Registry

We remained operational throughout the pandemic. Our Registry never closed its (virtual) doors. Our team worked remotely throughout the year and, as a result, large parts of Jersey’s finance industry, which rely on our services, were able to work from home. The benefits to the Island, both in terms of its international reputation for reliability and the income generated for local businesses and families, were enormous.

The plan for a new Registry system had been in development for many years. The ambition was to have a new online customer account and workflow management system for staff to increase efficiency, provide new ways to bolster the accuracy of data, and a better user experience for our many Registry users. Once we committed ourselves to the build, we were determined to deliver in 2020, despite the pandemic.

As it happened, at the last minute we had to let the delivery date slip into early 2021. But the system is now launched; all the work has been worth it. The opportunities for trust companies to build out their digital systems are enhanced. The accuracy of the data we hold will be enhanced. Our agility and capacity to deal with future market and regulatory developments are greatly strengthened.

Regulator

For some time the regulatory side of our work has been made less efficient than it should be by having an inflexible platform for communications with Industry. We have listened to concerns that, in particular, the filling out of personal questionnaires was too time-consuming. This is, in practical terms, a critical process both for us and Industry. In 2020, we launched and did much of the work on building a new regulatory portal. We prioritised the user experience in relation to personal questionnaires. We also wanted to lay the groundwork for improving other aspects of our interaction with industry. Once again, we got most of what we wanted to do done in 2020 and the launch of the much-improved portal in early 2021 has illustrated, if it were needed, how inadequate the earlier portal had been. It was our ongoing engagement with industry and listening to their experiences which led us to prioritise this work and I’m very pleased that we did.

At the same time, we engaged in a fundamental restructuring of parts of our IT architecture to prepare for more detailed workflow management development work in 2021. That work is essential for us to be able to, in future, test and assess the effectiveness of the supervisory work that we do. Unfortunately, such workflow management systems can’t be bought off the shelf by regulators; we need to build our own. That is a daunting task, but as I write we are deeply engaged, building on the work we completed in 2020.

2020 was also the year in which our supervisors benefitted from having a well-developed, automated risk assessment system to collate and assess the data we hold. Once again, this is something we have had to build ourselves. Our work to design and develop this system continues. We move onto the next phase of this work in 2021. As it develops, it makes us an increasingly sophisticated supervisor - it is the sophistication of our supervisory approach which is the essential bulwark of Jersey’s reputation.

Regulation has become an increasingly challenging activity. The degree of challenge reflects the intensifying complexity of the financial sector. Market fragmentation, political change, financial sector innovation and the changing face of financial crime all contribute to that challenge. At the JFSC, we have a skilled and ambitious team who have worked incredibly hard in 2020 to deliver the kind of development, supervisory and registry work that fulfil Jersey’s unique ambitions to be among the most responsible international finance centres in the world.

In my opinion, our staff deserve all our gratitude for the way in which they supported each other and delivered for Jersey in 2020. We continue in 2021 to build on what was achieved in 2020.

Martin Moloney
Director General