FinTech’s rise will require capacity building in other areas

With financial technology (FinTech) on the rise, there is a need to build capacity with respect to the regulatory and law enforcement capabilities regarding that sector, so as to safeguard the country’s reputation.

So says Chief Executive Officer of the Financial Services Commission (FSC), Kester Guy. He explained that such is necessary to ensure that the businesses operating within that space are above board, transparent and in line with the standard regulatory frameworks. He was speaking during the recently held final edition of the Central Bank of Barbados and Financial Services Commission’s Domestic Financial Institutions Conference seminar series entitled ‘Financial Fraud in Barbados’. His comments came as he said there has been a “signal” from the policymakers that FinTech is an area that they are interested in developing.

“So in essence, while we acknowledge that things are developing, systems are developing, we already know that FinTechs are here and operating, and in a sense, I think there is need for even greater collaboration and dialogue to ensure that the operation of these entities doesn’t not put Barbados as a whole in a negative light, when we hear global reports coming out, and see Barbados’ name being recorded among the jurisdictions at fault,” the FSC head said.

Meanwhile, asked whether regulators can keep pace with the advances in that sector, Jennifer Clark-Murrell, Deputy Director, Bank Supervision at the Central Bank of Barbados (CBB) said systems were already in place that can assist with ensuring they fully understand what is taking place in the sector. She spoke for example of the regulatory sandbox, which she explained allows the Bank and the FSC to observe players operating in that area as they test their products and services, and allows them to keep up with advances being made.

“So we use that space to observe any of the players, especially the FinTechs that want to get involved in things that might not necessarily fall under the Central Bank or the FSC particularly in terms of what they do. But it helps us to determine if we need to have additional regulations, new regulations or new regulators to deal with those particular players. We also are part of a joint supervisory group that have discussions on the international standards to understand what is evolving, what we can do collaboratively, if there’s any training that we need to provide to our licensees to ensure that they understand what is coming down the pipeline,” she said.

Clark-Murrell went further, explaining that they have also been having conversations with licensees to hear first-hand what developments they are noticing in that space.

“[To hear] how are they interacting with the FinTechs, how are they interacting with the cryptocurrencies, to understand if there is a concern and how we should address that concern from a regulatory perspective if need be,” she said. (JRT)