The Channel Islands have long been recognised as premier hubs for financial services, offering an appealingly competitive jurisdiction for global businesses. Jersey in particular, is known as one of the world’s leading jurisdictions for trust and company administration, supporting high-net-worth individuals and multinational corporations in structuring wealth and corporate operations efficiently.
Jersey, a strategic location
Jersey boasts a thriving fund management industry, with over £450 billion in fund assets as of recent figures. It is particularly strong in alternative investment funds, such as private equity, real estate, hedge funds, making it a go-to location for sophisticated investors. And Brexit presented new opportunities for the region rather than challenges as it was first considered.
Renowned for aligning with fast changing international standards set by organisations like the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF), it was one of the first jurisdictions to introduce economic substance laws, demonstrating its proactive approach to compliance.
Finally, Jersey’s strategic location and close ties with the UK and EU make it an ideal place for businesses accessing global markets while benefiting from its independent legal and regulatory system.
However, with evolving international regulatory frameworks, staying ahead of regulatory obligations has become increasingly complex. As a hub for financial services, Jersey is under constant scrutiny by international regulators, which means its compliance framework must adapt to shifting global expectations, such as those involving tax transparency, anti-money laundering (AML), and sustainability (ESG) reporting.
Reshaping compliance for financial institutions
Last year, Jersey introduced a transformative policy aimed at accelerating adoption of regulatory technology, or RegTech – in simple words – tools that reshape the way financial institutions manage risk and compliance.
The beneficial scheme for RegTech investments in Jersey means that businesses that invest in technology to help them meet their regulatory obligations are eligible for a 150% ‘RegTech Super-Deduction’ under ministers’ proposed spending plans.
This actually makes for a hat-trick win for Jersey: the region already with tax benefits, receiving optimisation from Regtech tools and at the same time returning the funds spent on technology winning some benefits from super deductions.
Released in September 2023, the Government Plan contains a package of tax break measures for 2024 to 2027 worth around £450,000.
This initiative is not simply a tax incentive. In fact, it is a call to action for businesses to modernise their compliance frameworks while reaping significant financial advantages. By optimising the use of limited human resources, it aims to enhance Jersey’s productivity and international competitiveness.
Fostering change
The government is currently assessing the pilot’s success with the possibility of extending the incentive if it proves beneficial. And the recent partnership with the UK Government to trial RegTech solutions in areas like regulatory reporting demonstrates the island’s commitment to fostering transformational change.
Jersey’s government has presented businesses with an unparalleled opportunity to align compliance with innovation. Businesses can overcome the challenges of regulation, achieving resilience and long-term growth by adopting state-of-the-art RegTech solutions.
This is where technology serves as a critical enabler – delivering real-time actionable regulatory intelligence and predictive insights to help financial institutions stay ahead of regulatory changes and reduce compliance risks. By adopting effective solutions, organisations can address regulatory requirements efficiently, early on, whilst supporting their broader operational and strategic goals.
Whether you’re a financial institution or a fintech innovator, the question now isn’t whether to invest in RegTech – it is how quickly you can make it happen.
Anna Antimiichuk, Global Head of Communications, Corlytics