Greater investment in financial technologies needed

by Marlon Madden

Barbadian authorities are being urged to incorporate greater use of financial technology to help bridge the digital gap.

This is among recommendations found in the Inter-American Development (IDB) Caribbean quarterly economic bulletin report that was released on Tuesday.

The report – Digital Infrastructure and Development in the Caribbean – noted that Barbados needed an estimated investment of about US$10.6 million to close the digital infrastructure gap.

“The economy of Barbados requires an estimated investment of US$10.6 million to close the digital infrastructure gap, equivalent to 0.24 per cent of GDP.

The gap for mobile broadband amounts to US$10.3 million, while the gap for fixed broadband is less significant at US$286,163. Closing the digital infrastructure gap would bring estimated benefits of 12.1 per cent of GDP and productivity gains of 9.9 per cent,” said the report.

However, the document, which focused on increasing productivity as a key driver of long-term growth and an opportunity for the Caribbean to get to the level of similar economies across the world, said infrastructure in Barbados could be improved by way of more public-private partnerships.

Singling out the area of financial technologies, it said “greater use of financial technologies is crucial to bridging the digital gap”.

“Firms and banks in Barbados report that strict know-your -client and regulatory burdens, including those related to anti-money laundering and combating the financing of terrorism, hinder domestic financial transactions and credit provision,” it said.

The authors noted that “fostering greater use of new and innovative financial technologies and revising relevant regulatory requirements to enhance access could help address some of these barriers to financial access and inclusion”.

The report pointed out that while Barbados’ ranking has improved over the years when it comes to internet use and information and communication technology adoption, there was still a lot of room for improvement.

“The percentage of internet users per the adult population in Barbados is 81.8 per cent and ranks it 35th out of 141 countries on the 2019 Global Competitiveness Report index.

“The country’s information and communications technology (ICT) adoption score is 23rd out of 141 countries on the same Index.

“This is a major contrast to the 2015 ranking of 101st out of 143 countries. Telecommunications infrastructure and ICT service cover age in Barbados is adequate, but there are low levels of ICT development and usage in both the public and private sectors,” it explained.

Pointing out that steps have already been taken within the energy sector with the deployment of electric vehicles and solar water heating, as well as the modernisation of water infrastructure, it said the biggest gaps were in the area of “telecommunications and digital areas”.

“The biggest gaps exist in the telecommunications and digital areas – in access to internet connectivity, in the speed required to improve the telecommunications infrastructure across mobile and broadband platforms, and in providing digital training for teachers to enhance their educational services skills, given the challenges of the COVID-19 environment.

“To close the digital gap, there needs to be greater investment in financial technologies, and the government must continue its current digital transformation agenda,” said the report.

marlonmadden@barbadostoday.bb