Barbados’ International Business and Financial Services (IBFS) sector needs an injection of innovative ideas which will lead to the creation of new products and services. In comparison to other sectors on the island, innovation has not been embraced, but admittedly this could be due to legislative and legal restrictions. However, the rewards for creating new products and services are high and could lead to a strong revival of the sector, thus generating significant revenues.
The IBFS sector consists of businesses which offer asset management, banking, captive management, company management, corporate, family office, insurance, investment management and trust services. But there is a void which can only be filled with the introduction of new products and services which can appeal to new customers and strengthen the offerings of the industry. The challenge for businesses in this industry is to create a product that appeals to the customer experience and the customer’s specific needs for their money.
Barbados’ IBFS Sector
Barbados possesses several competitive and operative strengths which have made it an important investment partner regionally and internationally. The island has an established infrastructure, a relatively low crime rate, robust banking and financial regulations and reputable businesses and companies. Businesses in the sector benefit from concessions, favourable exchange controls and low tax rates, have access to a highly educated and skilled workforce and state-of-the-art service providers.
The sector has benefitted from several developments which were implemented by successive governments to create and grow the industry. Legislation was enacted to attract international investments to the sector which employs approximately four thousand Barbadians and managed seventy-five billion dollars in assets in 2015. This is a positive signal for a sector which was severely impacted by the global economic recession of 2008 and resulted in business closures and financial losses.
But recent global events such as Brexit and the Panama Papers have served as reminders of how vulnerable the sector could be, especially for business who do not adhere to international rules and regulations. Additional challenges facing the sector include keeping up to date with changing legislation and following legal protocol when conducting business.
The Road to Innovation
It is no secret that technology will play an integral role in how new products and services are created and marketed. Financial institutions that have already incorporated innovative banking solutions such as e-banking, mobile banking and mobile applications must be commended, but they should not be comfortable with this feat alone. In a world where technological advances are rapid and life changing, there is always the challenge and pressure to “do better.”
The customer profile may vary due to different factors such as geographic location and financial status and companies in the international business and financial services sector, may find it difficult to create tailored innovative products and services. Whilst the approach of businesses should be tailored around the “target customer”, all products and services that are created will operate on a playing field that is defined by certain trends.
One of the most important trends is the need for heightened security and authentication when conducting transactions. Several businesses have lost millions of dollars due to lax internal controls. Another trend is the increased focus on social media and digital marketing. It is now the norm for businesses to operate a website, develop social media campaigns and engage with potential clients through online initiatives such as webinars, seminars and courses. Business analysis has also been a worthy tool which has developed into a must-have for businesses committed to growth and strategy development and is sure to be the medium through which leverage in the sector can be achieved.
The road to innovation requires extensive research and development which will result in the compilation of precious intelligence on the international business marketplace. This intelligence and data gathering should be analysed to see what the next step should be. For the research activity to be successful there must be a keen focus on legislation, local, regional and global trends, stakeholders which include competitors as well as customers and employees. It may be seen as a large, costly task, but in a sector where risks are inherent, research and development should be seen as a welcomed risk management activity.
In order to be innovative, companies in the IBFS sector must be willing to engage in research and development activities. These activities will produce helpful data, from which conclusions on the existing market, future trends and the customer profile will be made. In this sector, innovation and technology are intertwined, and businesses must embrace new developments with open arms and manipulate them to their advantage. When faced with increased competition from the global market, players in the sector do not have a choice, but to take a competitive approach to ensure success in their operations.