JFSC Money laundering and terrorist financing risk data 2019 - 2023 analysis - BANKING

In December 2024, the JFSC published some Money laundering and terrorist financing risk data [2019 – 2023], for the following sectors for the first time.

1. BANKING [see below]
2. TRUST COMPANY BUSINESS.
3. LEGAL and
4. INVESTMENT BUSINESS,  
5. https://www.jerseyfsc.org/industry/risk/supervisory-risk-data-collection-exercise/sector-based-aggregated-data/#Sector-based-aggregated-data

The data in the reports covers 2019 - 2023 and provides.

1. A general overview of each sector along with trends on inherent risk factors such as customers from higher risk jurisdictions and politically exposed persons (PEP) connections. 
2. An explanation has been provided to support the aggregated data presented through a combination of graphs and tables.

KEY AIMS AND OBJECTIVES

1. The aim of publishing these reports is to improve the understanding of money laundering and terrorist financing risk within each sector and enable a comparison across different sectors and activities.
2. Key risk indicators are included for each sector to provide useful benchmarking for supervised persons looking to assess their own money laundering and terrorist financing risks.
3. The JFSC will be engaging with industry through trade bodies and associations during Q1 2025 to gather feedback and inform future publications.

WARNINGS

1. The reports are not risk assessments.
2. Whilst some data quality and integrity checks are performed on receipt of the data, the JFSC rely on the accuracy and completeness of data provided by industry.

Banking sector

• The banking sector in Jersey is relatively stable in terms of the number of licenced entities, employees, and the total number of customer relationships. Total deposits have steadily increased from £113bn in 2016 to £156bn at the end of 2023.  
• The data collected relates to both deposit-taking and bank lending. It highlights the global reach of the sector with customers or beneficial owners of customers reported in
• 206 jurisdictions and
• 62% of deposit customers being resident outside of Jersey.
• Over the period analysed, exposure to higher risk jurisdictions has been impacted by changes to the FATF list of jurisdictions identified as having strategic deficiencies.
• In particular, South Africa was added to the FATF “grey list” in February 2023 - a jurisdiction which ranks 6th in terms of the residency of deposit customers.  
• The number of banking customers who are, or are connected to, a politically exposed person (PEP) has steadily grown since 2019.
• In September 2023, the Money Laundering (Jersey) Order 2008 was amended to allow for the declassification of PEPs.
• In 2023, 5 of the 19 banks which provided data had declassified one or more PEPs. 
• The key risk indicators have been split between banks
• With a high street presence in Jersey (retail banks) and
• Banks which primarily provide corporate banking solutions (corporate banks).
• This split acknowledges that these banks may have different risk profiles due to their customer focus.
• The data demonstrates that customers of corporate banks are
• More concentrated in higher risk jurisdictions,
• Are more likely to be connected to a PEP and
• Are rated as higher risk by the banks compared to retail bank customers.

Read the JFSC data report for the banking sector. https://www.jerseyfsc.org/media/7979/sector-data-banking.pdf

ALL SECTORS https://www.jerseyfsc.org/industry/risk/supervisory-risk-data-collection-exercise/sector-based-aggregated-data/#Sector-based-aggregated-data