Digitalisation

In Trinidad in particular, we are investing very heavily in new technologies, whether it be robotics [or] blockchain technology, to see how we can enhance the options that are available to our clients. The banking sector does not view it as being competition; we actually view it as being an enhancement for the society, because it will also help us in reducing the cost of many of the transactions that we currently engage in and provide the added benefit of the security. We view mobile money’s being digital fiat currency as being a plus; we view the cryptocurrencies as having no future. When it comes to blockchain, upon which the cryptocurrencies, we see this as having a significant future for the banking sector and for the wider economies, because there are so many transactions. 

Enhanced cashlessness in the banking and the financial system has numerous benefits for all of the players, but there are also some risks. If you look at the benefits for the users of the cashless services: security, speed of doing transactions and transparency. However, transparency is a double-edged sword, because the more transparent the transactions are, the more individuals who desire avoiding regulatory oversight, but find themselves challenged. And for that reason, cashlessness has not advanced in the Caribbean at the same pace that it has advanced in other jurisdictions.

E-commerce

So e-commerce will revolutionise how people do business in the future, and banks either find a way to be a proactive player in it, or we are going to be sidelined in the process. Many e-commerce platforms right now do not need banks in order for customers to complete their transactions. People are able actually to open their own e-wallets and do their transaction without any bank having to be involved. 

What can we do about it? Our balance sheets are not large enough for us to hope that we can be competitive with an Alibaba or an Amazon, so we are trying to facilitate e-commerce by local businesses. And so every commercial bank in the Caribbean is developing an e-commerce platform that its respective clients can utilise, for those clients to compete with the Amazon and the Alibaba, and for those clients to offer consumers either a lower price or quicker access to the particular product that they would like to acquire, using one of the bank's e-commerce platforms. So we have to get involved, we are trying to be proactive with it.

Diversification

Diversification in Trinidad and Tobago is the most misunderstood topic. Trinidad and Tobago is a dual economy society. We have an oil and gas economy and then we have another economy. The financial system operates primarily in the other economy. Our production levels have also been declining in both gas and oil. But the other economy of Trinidad and Tobago, which has always been a small contributor to our overall GDP performance, that continues to operate at a different pace to the oil and gas sector. 

The financial community in Trinidad and Tobago does not really operate very heavily in the oil and gas half of the dual economy. The local financial system provides financing to support businesses who are providing support to these friendly producers, and those businesses, many of them operate in the SME sector. If you look at the statistics for that, you will see that Trinidad and Tobago, as of April of 2018, the year-on-year growth in financing that was provided to those other sectors was 6%. So the local financial sector in Trinidad is doing quite a bit to fund what is happening in the other economy. And if you look at the balance sheet, at the distribution of those loans, you will see that those loans are actually evenly distributed across various sectors, after you take out the retail. Retail loans, as of April 2018, accounted for just around 41% of total loans in the financial system, but the other 60% being evenly distributed across manufacturing, distributive trade, construction, real estate. 

Trinidad and Tobago is probably best placed to be the financial hub. The financial hub really depends on people wanting to do business in Trinidad and Tobago and then whether they use Trinidad and Tobago to spread their riches outside of this country. So we are on the cusp of a challenging situation. We believe that how it is, is manageable, but it will be a different game, a different environment, from July 2018 going forward.