Clear path forward: Anya Schnoor, Managing Director, Scotiabank; and President, Bankers Association of Trinidad and Tobago, on embracing modernisation and managing demand imbalances

In what ways can the banking sector encourage greater adoption of technology?

SCHNOOR: T&T is still a cash and cheque focused society, and adoption of digital solutions remains relatively low. There has to be a real focus on the benefits that technology can bring to government services, whether it is improving efficiency, customer experience, or tax collection. Most banks have the capability to offer a full suite of e-commerce services but there needs to be an institutional and societal willingness to change. There are certainly some changes that need to be made to legislation, one being the Electronic Transactions Act. Indeed, due to the lack of a modern legislative framework, customers cannot, for example, take a photo of their cheque and send it to the bank to be deposited. It is 2017, and yet all banks still need to convene twice a day to exchange cheques for clearing.

We need to be more forward thinking on the benefits of becoming part of the global financial framework, just as we need to be in our approach towards technology, otherwise, we will be left behind. Banks are now technology companies in the financial services business, and that requires a whole different mindset that needs to be embraced.

How can banks address foreign exchange challenges and imbalances in supply and demand?

SCHNOOR: Despite the oil shock resulting in a 30% decline in forex inflows to the market over the past two years, we have not seen a parallel decline in demand. So we have this overhang of demand from various sources, whether it is importers, purchase of raw materials or payment of dividends. There are different ways to deal with this supply and demand imbalance, whether it is increasing the Central Bank of Trinidad and Tobago interventions of US dollars into the system, raising local interest rates to make T&T investments more attractive, or devaluing the currency and making it more expensive to purchase imports. There is no single answer. Rather, the solution will incorporate a combination of the above. The government also has to look at their fiscal policy and ways to cut expenditure to meet our revenues. There must also be a concerted effort to address waste and corruption, in order to get the country to the point where it is living within its means.

To what extent is T&T’s banking sector prepared for Basel II and III implementation?

SCHNOOR: We have been in discussions with the Central Bank for over two years working on implementation. T&T’s financial system is sound, and the banks are well capitalised. Most commercial banks far exceed the current capital requirements, putting them in good standing to meet Basel II and III requirements. The focus now is on operationalising implementation, and that is what we are working on.

Which sectors do you think will be driving loan growth over the next year to 18 months?

SCHNOOR: A large part of T&T’s economy depends on government expenditure. Construction and related industries rely on major government infrastructure projects that were previously put on hold, such as the Point Fortin Highway or affordable housing projects. Now that the current government has been in office for 18 months, we hope to see a clear path forward on these projects. The manufacturing sector should also be a growth driver, as players continue pursuing expansion and growth opportunities both locally and regionally. Some good examples include Agostini Group purchase of Pepsi here, Massy Group is expanding in Colombia, Republic Bank is looking to Africa, while ANSA McAL purchased a brewery in the US. International expansion will be particularly helpful for T&T’s forex needs. Excluding the public sector, manufacturing is the main employer in T&T. Expansion of the sector and hospitality in Tobago could be potential growth opportunities as we look to the future.