A lot has changed in the past 10 years.
Increased regulation made it increasingly difficult for smaller trust and corporate service providers to be cost effective, leading to a period of consolidation, but I’m happy to say that the customer-focused spirit of the Isle of Man remains strongly at the fore.
Technology was once seen as the Holy Grail for business, but it’s interesting to see how it has settled into being just another business tool. Instead of technological innovations, we saw the backlash from clients who were tired of increasing automation and demanded a return to personal service. No doubt, this has been helped by holo-conferencing, making it much easier to hold “face-to-face” meetings in holo-booths as though you were actually sitting across from the other person, avoiding the awkward lags and pauses that plagued early video conferencing. It’s probably a good thing that this technology exists following the global carbon taxation that made long-haul air travel almost unaffordable, limiting flights to short journeys within the range of electric aircraft.
It seems strange to think how difficult client take-on used to be. Since the introduction of the international KYC database, championed by the Isle of Man, due diligence now means checking the global database, where clients have uploaded their verification information just once for all of their business interactions. A process that used to take weeks can now be completed in minutes.
It’s also interesting to look back at the catalyst for such a useful tool. Rather than it being championed as a commercial opportunity, it was actually the backlash against the commercial exploitation of data by consumer businesses, combined with the public rebelling against governmental erosion of privacy with public information databases. Had governments stopped at beneficial ownership records for regulatory purposes things might have been different, but when this extended into publishing tax returns and earnings information “in the public interest”, the public finally drew the line. Privacy replaced data as the new currency.
With the world on the brink of an uprising against what was seen as exploitation of personal information, it took some brave actions by forward-thinking governments to move things on. It brings a sense of pride to think that the Isle of Man was the first government to move from paper currency to a government issued and controlled cryptocurrency. The initial negativity to this approach, described by the press as an attempt by a “tax haven” to attract dodgy money, soon changed when it became apparent that the blockchain technology, combined with government monitoring and the full support of local regulated business, almost completely eradicated money laundering. Criminals soon realised that it was impossible to hide their digital signatures in the world of government controlled crypto, and instead re-focused their activities on hard currency. Of course, it wasn’t long before other governments followed suit, taking us to where we are now, where almost all financial transactions are undertaken in cryptocurrency.
And with so many historic changes, I hear you ask, what challenges are we facing in 2030? Well I for one am watching with interest to see what happens when the United Kingdom follows the Crown Dependencies in joining the slimmed down EU later this year. After so many departures by European countries in the early ‘20s, it was a positive development when the EU gradually reverted to its original intention of a free trade association, as a result of which most European countries have now become members. In spite of constant change, it’s interesting how history so often repeats itself!