Published: Thursday May 19, 2016
A blog post by Max Excell, Global Sales Manager at GBG.
In part one of this blog series, I explored just how a tiny island like Cyprus came to be at the cutting edge of financial services. If you missed it, you can read the post here. Now however, it seems as though its position may well be in jeopardy.
During my last visit to Cyprus in April, I had the valuable opportunity to meet with a selection of customers, prospects, and data providers. All of them were convinced of one thing: that change in the financial services sector is not only happening, it’s happening right now.
For far too long Cyprus’ regulator has imposed outdated methods when seeking to meet ‘Know You Customer’ (KYC) and Customer Due Diligence procedures. The current position in Cyprus relies on the collection of physical documents, an archaic, time consuming, and costly process that interrupts the customer journey and can prohibit online activity.
The fear factor for an island like Cyprus is that major financial services firms could look to move their operations to other jurisdictions – jurisdictions where regulation has changed to meet the growing technological advancement which enables online activity. The impact on both tax revenues and employment levels within Cyprus would be significant, and the many benefits of their previous regulatory foresight lost.
Whilst global internet consumption may currently only be at 40%, the figure is predicted to increase dramatically by 2020 – with 7.6 billion due to achieve internet access via phones and tablets. With every year that passes merchants have more potential to reach a global audience, but with the opportunity grows the need to remain compliant with relevant laws and procedures.
For many online brokers in Cyprus, collecting physical evidence of ID and residence really isn’t competitive when compared to regulations in countries such as the UK; where electronic ID verification is seen as a compliant, secure, and trusted means of on boarding individuals to conform to KYC.
As I mentioned earlier however, change does seem to be in the air - and it is thought the Cyprus Securities and Exchange Commission (CySEC) are looking to adapt regulation to enable companies to use electronic verification (in one way or another), and to allow Cypriot based investment firms to compete more effectively in this ever growing modern era.
If you read my last blog (or already plan on attending yourself) you’ll know that Cyprus will soon be throwing open its doors to over 2,500 attendees and more than 95 companies for the island’s largest conference.
Running from the 24th – 26th May, the iFX EXPO International 2016 will also feature over eighty guest speakers, many of whom will give invaluable insight into what the future holds for the industry – including changing AML frameworks.
We’ll be exhibiting, so come to booth 68 to discover how we enable over 6,000 international organisations to operate globally and automate the safe and profitable on-boarding of customers from all over the world.