Financial Services Should Find Ways To Expand
NASSAU, The Bahamas – Minister of Financial Services Ryan Pinder said, on September 12, that as the financial services industry at large seeks to evolve and grow, it would suit stakeholders to explore expansion of the industry.
“This would not only continue to provide opportunities for all, it would also, in my opinion, take some of the global pressure off our jurisdiction and industry; but more importantly, will position us in a way where all can thrive, not just survive,” Minister Pinder said.
Minister Pinder was speaking on the topic “The Future of the Bahamas’ Financial Services Industry”, at the Bahamas Association of Compliance Officers’ (BACO) Money Laundering Reporting Officer (MLRO) Day 2012 at the British Colonial Hilton. The theme for the event was “Complying in Challenging Times Whilst Facing a New Compliance Era – Getting it Right!”
“Given the obvious evolution over the last decade in the financial services industry globally, we have to – and I am certain that we are – distancing ourselves from the perception as a jurisdiction of tax cheats and a place to hide wealth, but demonstrate that we actually are a jurisdiction with a highly skilled workforce, a long history of integrity, a well regulated industry where wealth is managed and, in turn, positioned for international business and investment globally,” Minister Pinder added.
He said, in this vein, stakeholders would remain committed to the philosophy of confidentiality and look to work hand in hand with the regulators to ensure that The Bahamas is a jurisdiction sensitive to the operation of the private sector and an inviting jurisdiction to the international financial services participants.
“We are a global business hub,” Minister Pinder said. “We are positioned to be the gateway to the Americas. We should work to be known as an International Business Centre.
“To accomplish this, we require an expanded commercial Financial Services Industry and significant economic policy reform.”
Minister Pinder said that in his Budget Communication, he presented to the Bahamian people a detailed plan for the Ministry of Financial Services and how the Ministry would work to enhance and grow the industry, focusing in key areas where it believes results can be achieved.
He added that The Bahamas is currently experiencing a market shift.
“We have traditionally experienced market growth in Europe,” Minister Pinder said. “However, I think it fair to say that much of the private sector is seeing potential for significant expansion into Latin America, some institutions who are in the process of reforming the internal operations here in The Bahamas to be a hub for their global operation’s market access to Latin America.”
“This is a very encouraging sign as we in the Ministry of Financial Services, and me as the Minister, see this market shift as well.”
Minister Pinder said at as industry stakeholders experience that shift, it is important that The Bahamas positions itself to not only possess a first mover advantage, but also have the necessary expertise to be dominant in this new market. The needs and advice that clients of Latin America might need are likely different than those in other jurisdictions, such as Europe and the United States, he added.
“To this end, the Ministry of Financial Services has identified the Latin American markets and that they offer significant untapped opportunities for the financial services sector of the Bahamian economy,” Minister Pinder said.
“We will initiate a strategic plan where existing information is gathered on scope of market, cultural attitudes, high net worth individuals within the region, financial services currently used, how is the market currently covered, which are the major competitors dominating the market,” he stated.
In performing the review, Minister Pinder added, his Ministry will seek to identify the perception of The Bahamas in the market place and then create a marketing plan for the particular region from such information. Latin America – and especially countries like Brazil, Mexico and Panama – is high on our agenda as key markets.
“We are approaching this geographic expansion in a deliberate and collaborative fashion,” he said. “We travel to Brazil next week to explore opportunities for The Bahamas and the financial services industry, and then at the end of the month I travel to Panama to speak at the STEP conference, exploring ways where Panama and The Bahamas can work together, in parallel, for the mutual evolution of our financial services industry.
“These new clientele for The Bahamas will cause you to likewise be nimble and evolve your exposure and knowledge base. To this end we in the Ministry of Financial Services are committed to assist in this regard.”
Minister Pinder said that his Ministry is committed to developing continuing education initiatives, like BACO has done so well with, to prepare local industry stakeholders for the shift in the market.
“We propose professional continuing education courses for professionals, inclusive of access to language courses so each and every one of you have the opportunities to take advantage of our shift, be the most prepared, be able advance your individual careers,” Minister Pinder said.
He pointed out that there are also internal sector shifts occurring in financials services as the global industry reacts to the changing landscape. An example of this, he said, is the independent asset manager.
“Both private sector and we, as Government, recognise this evolving industry, and it is evolving for a number of reasons. Independent asset managers identify The Bahamas as an ideal jurisdiction to be for their operations,” Minister Pinder said. “We as a private sector, Government and Regulators must recognise this and prepare ourselves to be that attractive jurisdiction.”
He commended the Securities Commission of The Bahamas in that regard and said that his Ministry will be having a meeting with the Securities Commission of The Bahamas to understand the regulatory process for licensing independent asset managers, so the Ministry can facilitate business while also satisfying the regulators with all of their requirements.
The evolution of that sector of the industry has significant impact on compliance officers, even creating an opportunity for entrepreneurial opportunities in compliance, Minister Pinder added. Most independent asset managers, he pointed out, are smaller operations, sometimes not requiring dedicated compliance officers.
“Subject to the discretion of the Securities Commission of The Bahamas, this can create opportunities for professional compliance institution to service this new and evolving market,” Minister Pinder said. “It is our collective responsibility to be in a position to identify these opportunities, create policies to promote them, and then you as the private sector to partner and take advantage of this opportunity for your benefit.””
“In all instances we, as a Government, recognise that new opportunities in sectors will evolve, sometimes based on evolution of the international financial services industry, some as a result of domestic policymaking,” Minister Pinder said.
“In all instances we want to ensure the financial services sector of The Bahamas, and you as young Bahamian compliance officers are in the best opportunities to identify these shifts, and take advantage of them.”
By ERIC ROSE
Bahamas Information Services