William Mason, director-general of the Guernsey Financial Services Commission, said that updates to its regulatory digital framework would support emerging financial technologies, and the commission would encourage the widespread adoption of AI across all sectors of the industry.
The commission launched a Digital Finance Initiative earlier this year.
Mr Mason said it aimed to combat financial crime efficiently, foster industry engagement and create an environment in which firms can launch innovative products and services.
Its plans to support the use of blockchain, tokenisation, stablecoins and digital asset custody and be receptive to new financial technologies.
‘We are never, as a small micro-state, going to be the biggest domicile, but we would like to be known as one of the most hospitable domiciles in Europe for good quality digital finance. We would like to be a place where experimentation is known to be possible,’ he said.
‘We have been encouraged at the digital business already being served in Guernsey. Local trustees are already acting as self-custodians for digital assets, who have made significant money from cryptocurrency.’
He added that the commission was keen that Guernsey’s data regime was seen to be ‘at least as hospitable as that in the UK’.
‘We do not want to arrive at a situation where we are not assured of access to the dominant US tech stack.
'We are kidding ourselves if we think that US headquartered businesses are prepared to entertain restricting EU access to their technology.’
He said that firms reluctant to embrace artificial intelligence in their businesses processes would be at risk of becoming obsolete, inefficient and ‘doomed’ to be out-competed by rivals.
‘We take a positive stance on AI because we think it is essential for firms to consider and to gain experience in adopting what promises to be the next general purpose technology,’ he said, comparing AI to past technologies – such as steam power, electricity, and internet – to highlight how those who resisted adoption then, failed to prosper.
‘While it took time for steam power to transform factories, mines and transport, once it did, horsepower, ox-power and human manual labour became so inefficient as to be more of a hobby than a viable alternative.’
He added that the commission appreciated that some financial services sectors would be able to adopt AI faster than others. But he believed that change would be ‘considerable’ across all sectors over the next few years.
Mr Mason said that the GFSC’s Digital Forum had proved valuable for gathering industry insights and inform policy and proposals, and raised the prospect of rebranding the commission’s innovation ‘soundbox’ as a fully-fledged and supported ‘sandbox’ for firms looking to launch innovative products or services.
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