The Financial Services Commission (FSC) on Monday served notice that it is on course to bolster its regulation of the financial service system with the setting up of a new Fintech Advisory Committee to ensure Barbados can capitalise on the lucrative Fintech sector.
FSC Chairman Oliver Jordan told the official opening of the second Barbados Risk and Insurance Management Conference hosted by BIBA, the Association for Global Business, that regulation is at the centre of protecting the island’s financial sector and consumers.
“The objective is to ensure that Barbados remains an attractive jurisdiction with an appropriately nimble and effective regulatory environment,” he told the gathering.
Noting that Fintech – the use of technology to facilitate financial services – was driving innovation in financial services and changing the nature of commerce, he said regulators must understand the benefits and risks in order to encourage its healthy development.
“However, regulators have always faced an escapable dilemma of timing. We can seek to regulate too early and possibly kill off or freeze innovative business models with potential for the public good or we can take too long to regulate which can lead consumers exposed to harm,” Jordan said.
He said this dilemma was being addressed by a new regulatory approach known as anticipatory regulation.
“This approach assists with the emergence of new technological tools while also allowing faster regulatory responses to ensure that the public isn’t exploited and any dangers are averted,” the FSC chairman said.
“The purpose of this Fintech Advisory Committee is to one, be a platform for exchanging ideas for innovative fintech initiatives among key stakeholders; to be an opportunity for Fintech firms to present specific regulatory problems they are experiencing; and, finally, to become an interface between market participants and regulators to help improve the industry’s understanding of the parts of the regulation.”
Jordan added that the FSC will seek to strike the right balance between retaining appropriate flexibility for Fintech development and innovation while ensuring consumer protections for those that are most vulnerable.
“On this point, it should be clearly stated that while we are keen to listen and hear, we will not be asking the Fintech industry to write our regulations as regulations cannot and should not be driven by those who are regulated.
“In essence, what we want to achieve is an independent public perspective while facilitating Barbados becoming a leading Fintech and blockchain hub,” he said.
The FSC chairman also disclosed that the commission will be issuing corporate governance guidelines for all sectors in the coming year.
Jordan said to ensure that regulations are transparent, there will be robust consultation with industry players, and the FSC will establish stakeholder advisory committees to serve as consultative bodies to its board of commissioners and management.
“The advisory committees initially cover the international business sector, the insurance industry, insurance brokers and credit union sector and will provide input and advice on FSC priorities, principles and regulations and other matters as deemed appropriate,” he said.
This initiative will be led by a subcommittee headed by former executive director of BIBA, Henderson Holmes.
Jordan said the FSC has so far met with BIBA, general insurance and the credit union league to discuss these advisory committees and they have received widespread support.
The FSC is also hoping to establish a consumer advisory committee. (SD)
