Barbados must review its business model if the financial services sector must effectively respond to the “disruptive challenges” it faces, the Governor of the Central Bank, Cleviston Haynes, has suggested.
He said the Central Bank has recognised the need for more emphasis to be placed on constantly developing new ideas and solutions for challenges facing the sector.
Stressing the importance of maintaining a liquid, robust and resilient financial system that supported economic growth, Haynes said the central bank remained committed to help in the transformation and repositioning of the locals in financial services industry.
Haynes was addressing the 10th Domestic Financial Institutions Conference (DFIC) at the Central Bank on Thursday under the theme Repositioning Barbados’ Financial Sector.
He said: “While our why has not changed, our what and our how are facing disruptive challenges including the internationalisation of services; technological advances and disruptions; consumer pressure for cheaper financial products; convenience and caring service; tough competition; the demand for simplicity in a world of complexity and stricter international rules and standards.
“How can and must we respond to these circumstances? What must we do to reposition the sector? It is my belief that we must reexamine our business model. We need a model that reinforces and supports our purpose or why and addresses our how and what, a model that is customer centric and technology driven, but which also accommodates the not so tech savvy among us, a model that promotes economic and social transformation while strengthening financial stability, a model that helps us to manage our risks both traditional and non-traditional,” he said.
Experts in the financial services and representatives from commercial banks, credit unions, the Barbados Stock Exchange, investment firms joined with other financial services representatives to discuss a range of issues and come up with solutions.
While welcoming Government’s ongoing efforts to use an electronic method of payments, Haynes pointed out that Government has already started to make necessary changes including ongoing efforts to eliminate cheque payments and the implementation of the regulatory sandbox.
But Haynes said issues such as derisking remained a bugbear, with a lot of the focus being on the loss by regional banks to the access of correspondent banking.
“We want to access the implication of this phenomenon in the context of the national and regional discussion about things like legalising cannabis for medical purposes, the expansion of gaming services and even the emergence of the new fintech sector.
“After Government’s recent debt restructuring, we must reform the securities market,” added Haynes.
Chief Executive Officer of the Financial Services Commission Kester Guy said as institutions move to incorporate more and better technology in an effort to make their operations more efficient, the regulator was also doing what it could to help advanced that cause and build out the sector.
“We are also, at the FSC, considering and reviewing a digital asset framework, including the rules and operations, to determine applicability and the appropriateness for operations within our market.”
“We are continuing to strengthen and aggressively fine-tuning our legislation to enhance our service standard so that we can meet our growing and ever demanding stakeholders concerns and demands before us,” Guy said.