Use of Technology in the Due Diligence Process

25th November 2015

​The Commission has issued annexes to the Handbooks for Financial Services Businesses and Prescribed Businesses on Countering Financial Crime and Terrorist Financing ("the Handbooks") on the use of technology in the customer due diligence process.

The changes which have been made to the rules and guidance in the Handbooks provide for the use of technologies such as digital signatures and electronic verification in the client take-on process and when due diligence documentation has to be updated, including where this technology is delivered through the internet or by tablet and smartphone applications.

Each annex encompasses new rules stipulating that a firm must understand this technology if it is to use it and that it has evaluated that its use will result in compliance with the relevant regulatory requirements.  The revisions to existing rules are intended to provide positive affirmation that new technologies have a part in this important process.

The Commission hopes that these changes will give firms the confidence to use new technologies.  The Commission is not requiring firms to notify it that they intend to use new technology but it will monitor take up through the disclosures which firms are asked to make in the annual financial crime risk return.

The changes also include guidance for firms on the use of online utility bills to verify the address of Channel Islands residents.  

This new section has been issued as an annex to each Handbook which includes amendments to three existing rules, the changes of which have been highlighted.  The annexes are available through these links:

The Handbook for Financial Services Businesses

The Handbook for Prescribed Businesses

The Commission would like to express its gratitude to those industry members of the “Handbook working group” who assisted in the development of the consultation paper published earlier this year and to all those who responded to the paper’s proposals.

The annexes are issued pursuant to sections 49(7) and 49A(7) of the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999.