Despite the challenges facing the financial services industry, the sector faces some of its greatest opportunities to grow, according to Wendy Warren, executive director of the Financial Services Board.
In an interview with the Bahama Journal, Ms. Warren, said that although the financial services industry is a "very difficult" market, the country's sound democratic environment gives it leverage as the financial services centre of choice.
"Tax neutrality continues and the Bahamas continues to have a very strong fiscal approach to managing its affairs…with many other countries having far greater difficulty than the Bahamas is, we continue to represent an ideal opportunity for (potential clients) to place their assets here, to plan their long term future. We certainly have the opportunity to grow in the long term over the next few years but it will continue to be a bit difficult," Ms. Warren said.
The uncertain global economic forecast means that economic prospects locally are also very dim, she reminded.
"Our financial services industry relies on delivering our services externally, so we are not exempt from these trends," she said.
According to Ms. Warren, financial services firms around the world are addressing these challenges by way of consolidation.
"Businesses are either focusing on fewer product areas or they're looking at focusing on fewer geographic regions and so this naturally results in consolidations and the Bahamas will continue to be a part of this.
"Many of our institutions are part of global companies and as their head offices make these adjustments, the Bahamas will really become involved in some of these decisions and it is likely that consolidations will continue," Ms. Warren pointed out. In the interim, the financial services executive stated that the Bahamas still has a very strong presence in the financial services business, particularly in private wealth.
"The private wealth business has been our mainstay for many years," she said. "We're very fortunate that industry has survived many of the challenges over the past few years – although not without our losses – but it has survived and I think it really speaks to the quality of the businesses and clients who were in the Bahamas. We remain a premier centre."
The Bahamas has held its position as a top-ranking financial services center, even after it was blacklisted by The Financial Action Task Force in June, 2000. This was followed by the departure of numerous international banking companies from the country, while the licenses for others were not renewed.
In December of that year, parliamentarians passed a package of 11 bills in response to pressure from FATF and Organization for Economic Corporation and Development.
Ms. Warren said that there needs to be continued refinement of the country's regulatory environment to ensure that the financial services sector is customer friendly.
"We have to make ourselves attractive for people to do business with and that requires the role of government, regulators and institutions to have a very strong focus on quality service," Ms. Warren said.
And with other countries taking steps to ensure that they remain competitive in the financial services industry, Ms. Warren is cautioning that the Bahamas must continue to do likewise.
By Hadassah Hall, The Bahama Journal
