The financial services sector in Barbados and globally has developed tremendously over the decades, from the early years of persons stashing money in a ‘safe’ place within their homes to savvy investors trusting their hard-earned income to financial institutions such as commercial banks and credit unions. Fast forward to the modern-day financial services, with the introduction of offshore banking, insurance, accounting, wealth management, mutual funds, trusts, stock brokerage firms and more – all businesses that currently comprise financial services.
Barbados, in particular, has a well- developed financial services industry and has been regarded as a financial services hub for several years. This industry accounts for approximately 10% of Barbados’ Gross Domestic Product and is an integral component of the country’s business sector. Barbados is home to a number of globally recognized brands such as CIBC, RBC and Scotiabank. The country is known for the soundness of its banking system within Latin America and the Caribbean. Barbados also boasts top accounting firms such as BDO, Deloitte, EY, KPMG and PwC. In addition, the jurisdiction continues to maintain its position within the Top 10 captive domiciles globally.
In the same way that financial services have developed, so too has technology. Technology plays a significant and, some may argue, a transformational role in the facilitation and delivery of these services, providing a more effective, secure, innovative and automated way to conduct financial transactions. Financial technology, also referred to as fintech, is therefore vital in this modern-day, technological business environment. Blockchain, cryptocurrencies, mobile payments, financial apps, which are all components of the value chain of the new era of finance, seek to make our lives simpler, faster and more convenient.
The Government of Barbados, being cognisant of this, is moving the country’s public service towards a paperless, digital platform, via its national digitisation programme. Government already has in place a payment platform where citizens can pay for select government services online. It is anticipated that continuing upgrades and expansion of this process will significantly enhance the ease of doing business in Barbados for locals and investors alike. So critical an aspect is this, as part of the wider vision of the Barbados government and other stakeholders, that the initial process towards further development of the fintech industry was to launch an mMoney pilot in 2018, which facilitated electronic and digital payments at certain establishments across the island. Quite notably too, Barbados is emerging as a leader in blockchain technology within the Caribbean, having thrown its support behind the first fintech start-up in the region, Bitt Inc.
The Barbados Stock Exchange has also embraced the blockchain based, distributed ledger technology and digital asset trading as a part of its operations and is confident that this technological revolution will further enhance business facilitation in Barbados.
Why Barbados for Fintech
Co-founder of Bitt Inc., Gabriel Abed, has endorsed Barbados as the place to do business generally, and specifically as it relates to the financial services sector: “Barbados is one of the most beautiful paradise islands with the right mix of sun, crystal clear blue seas and business culture. Blockchain and relevant technologies are well understood and supported by the government and regulators, making Barbados a great place to establish a company, especially in light of a competitive corporate tax structure and superior island lifestyle. Barbados is extremely welcoming of foreigners, it’s very safe with low crime and there is a growing community of blockchain companies onshore. Year round warm sun, calm oceans, beautiful people, with an action-oriented government and blockchain development… what more do you want.”
In addition to Bitt, the country has attracted five other fintech companies to its shores, including Shyft, Polymath, AION, Nuco Global Inc. and One Ledger. This is due in part to Barbados’ enabling business environment and its signal that the country is open for business. In efforts to further attract similar companies in the fintech industry, Barbados seeks to capitalise on its value proposition and other attributes which include:
• Knowledgeable human resources – access to a pool of business professionals and an educated workforce.
• Business friendly– a competitive tax regime including the right regulatory environment to encourage innovation.
• Sound infrastructure – excellent IC infrastructure with island-wide 4G LTE and Fibre Optic high-speed internet.
• Solid reputation – apart from having a mature financial services industry, Barbados is known as a trusted jurisdiction with good economic, political and social stability.
• Quality of Life – Barbados boasts a safe and welcoming environment to live, work and play.
Similarly, fintech-friendly countries such as Dubai, Switzerland, Estonia, Singapore and, closer to home, Bermuda and the Cayman Islands, have already ramped up their fintech sector and are making great strides as early adopters of cryptocurrency and blockchain technology. Some of these countries have seen increased business as a result.
Charting the Course
Barbados too is making steady strides. The country has remained on a positive trajectory while it continues to further stabilise and transform its economy and business sector, and has revised certain pieces of legislation that are attractive to both local and foreign investors. Barbados also has an appropriate regulatory framework in place. It is noteworthy that in mid-2019, Bitt Digital Inc. became the first company to successfully complete and exit the regulatory sandbox regime under the supervision of the Central Bank of Barbados and the Financial Services Commission. The sandbox provides the opportunity for fintech firms to test their products in a controlled environment, while affording consumers, stakeholders and the financial system the requisite protection from undue financial risk.
Barbados’ financial services industry stands on a firm foundation. Given the opportunities that are emerging locally and globally, the country is poised for accelerated growth. Barbados is ready to engage the world… come grow with us!