Offshore Internet Banking There are a number of issues which have hampered the industry’s total embrace of the internet. Investec’s Pleasant warns offshore institutions not to lose sight of ‘due diligence’ considerations in the rush to go online. To take into account these considerations, know your customer guidelines and avoid embroilment in a money-laundering scam, offshore institutions usually ask prospective clients to produce a copy of their passport before opening an account. Currently, there is no universally accepted digital equivalent to hard copies of identification documents, a factor which prevents banking relationships from being conducted entirely online. “In online business there is the problem of whether you know who you are transacting with, so, particularly when somebody is opening an account, you have to be more careful,” Pleasant says. Offshore Internet Banking & Stephen Jones Stephen Jones, managing director of Woolwich Guernsey, is a well-known internet enthusiast and sits on Guernsey’s IT Committee which addresses the island’s e-commerce issues. He argues internet-based transactions are no more vulnerable to fraudulent activities than conventional means of communication, such as telephones and faxes. “It is possible to ensure a certain degree of security by using the internet because a customer has to use a series of passwords and pin numbers to access his account,” he says. Transactions conducted by fax on the other hand, are authorised with client signatures, which are often unreadable, Jones says. “Someone using their mother’s maiden name over the phone (as a password) is not completely secure either,” he says. Offshore Internet Banking - Jones Believes Jones believes, however, that due diligence procedures will continue to use hard copies of identification documents to fulfil due diligence procedures, for the foreseeable future at any rate. “People can fill in forms online, but they still have to send their passport. At the moment, an electronic replacement for this is still a long way away, but people are working on it,” he says. However, not everybody in the offshore finance industry shares this view. Rob Maxwell, international marketing manager at Friends Provident International, says a research and development team at the firm is seeking a means to identify clients over the internet. “We are investigating how IFAs might transact business online and our research and development team are looking into the viability and cost of certain products that can identify people,” he says. Maxwell says such equipment as devices to scan a client’s retina or fingerprints for identification purposes are already available. FPI intends to expand its internet service to brokers so they can access policy valuations and conduct administrative functions such as registering a change of address online. Offshore Internet Banking - Maxwell Maxwell also believes that many firms have acted too hastily in the rush to jump on the internet bandwagon and, as a consequence, a significant proportion of financial sites lack purpose. “A lot of people set up websites with no real objective. They just did it because everybody else was doing it,” he says. In the wake of the internet stampede, however, there are some quarters of the international financial services which remain more reserved about the impact of the so called e-revolution. 
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