Encouraging compliance results for small number of businesses using electronic identification

In March 2021, we asked 25 businesses about whether they were using applications, smartphones, tablets and other technologies for their customer due diligence processes to collect information about an individual or evidence a customer’s identity electronically (E-ID).

The businesses spanned fund services business, investment business, trust company business (TCB), lawyers, accountancy firms and lenders.

Reasons for not using E-ID

Of the 25 businesses examined, only two TCBS are currently using E-ID solutions.

The reasons businesses gave for not using E-ID included it not suiting the business’ current business model, not being suitable for how they handle customer due diligence or the business not having adequate systems in place to support it.

Current use of E-ID

Both of the businesses that have adopted E-ID are using a third party product to collect information from individuals and carry out screening. We were encouraged that these two businesses indicated they have implemented policies and procedures that adhere to the guidance outlined in the relevant Handbooks for the Prevention and Detection of Money Laundering and Countering the Financing of Terrorism.

Useful resources

We are committed to working with Industry in the adoption of technology solutions and recognise that E-ID usage is gaining momentum globally. In 2020, we published an assessment of the options for developing a shared KYC utility for the Jersey financial services sector. We also hosted two webinars on E-ID; Covid-19 implications for customer due diligence and Follow-up session on customer due diligence.

We are currently engaged with representatives from Industry with a view to publishing more guidance later this year on the use of E-ID.

You can find more information in our feedback from the examination.