This was stated by Wendy Warren, executive director of the Bahamas Financial Services Board (BFSB).
In a recent interview with The Bahama Journal, Ms. Warren indicated that legislation is one of the key foundations of financial services, but she noted that there have been key bills that have taken years to be passed.
“Legislation has not moved as quickly as we would like…earlier this year we saw the e-commerce bills tabled and work began on those from 1999,” Ms. Warren said. “We saw the Securities Industry Act tabled and passed this year. Work on that began in 2001. So what we would like to see is that time line shortened because our time to market is critical.”
She added, “If the Bahamas is competing with other centres, we have to find a mechanism of decreasing our time to market because to the extent that we are in anyway perceived to be slower to respond to client needs, like any other business, clients will factor that into their decisions…where we’re looking to develop products in the financial services, legislation typically drives the development of new products and legislation is how we respond to changes in the marketplace.”
Ms. Warren said that the BFSB has been working very closely with the Ministry of Financial Services and Investments and the Financial Services Consultative Forum, to find ways of shortening the time it takes for financial legislation to be passed.
Meantime, she said the financial services industry appears to be stabilizing after the country was blacklisted by the Financial Action Task Force (FATF) in 2000 after being considered as non-cooperative in the fight against money laundering.
By December of that year 11 bills were revised, nine of which were directly related to financial legislation. Since then, hundreds of international business companies have left the country.
“From a larger perspective, worldwide financial services have been going through an adjustment, significant consolidations, significant persons losing their jobs in the industry,” she said. “But generally, The Bahamas industry is stabilizing. There are some firms that are still finding some difficulty in their own businesses and other firms are beginning to grow. Some persons say that they have had the best year in many, many years, while others are saying things are still tough, so you will find pockets throughout the industry.
“I think what is important about the 2000 experience is that we must monitor our environment, we must remain engaged, we as a jurisdiction must ensure that we have a very firm sense of the needs of the industry, the needs of the international community, how The Bahamas intends to marry those and a strategy to implement it and I think that’s what the 2000 experience speaks to. If we do that, I think we would have learnt from 2000…the majority of our time has been spent on product development. For example, how do we develop The Bahamas as a financial services jurisdiction.”
Ms. Warren said that it is key to continue working on resolving some of the key issues that the industry faces. She said jurisdiction development is a priority.
“We have to constantly improve our own product which is The Bahamas and that improvement can come in any number of ways and secondly, external communication, ensuring that the international community, institutions, intermediaries understand our business and understand what The Bahamas is doing,” Ms. Warren said. “If we do not communicate that to these external persons, they gather information through other sources like the international media, bits and pieces they hear and sometimes the fact that they’re not hearing anything from The Bahamas makes them question, what’s happening in The Bahamas.”
According to the financial services expert, competition continues to generate from centres close to The Bahamas, including the Cayman Islands, Bermuda and Barbados. However, new competition is emerging from centres that are targeting niche markets like the Middle East and Asia, she pointed out.
“Asia is expected to generate the most growth in high [net-worth] individuals so that is naturally a market for private wealth and we have to determine how do we continue to grow in the Asian marketplace, so the competition comes from our existing and traditional competitors, also new competitors,” Ms. Warren said.
As for the traditional competitors, Ms. Warren pointed out that Bermuda and the Cayman Islands have specific advantages compared to The Bahamas, including the ability to produce product-oriented legislation “extremely efficiently.”
“They really set the standard for the marketplace,” she said. “Secondly, Cayman particularly has an effective marketing strategy. The brand is well known and they approach it in two ways, one in the exporting of their firms into other jurisdictions and secondly, they are at every conference. Sometimes there are up to 60 people from Cayman at a conference. They travel frequently.”
“Also, one of the ways they are able to market the product is they actually use the importing of expatriate labour for a marketing tool for themselves, so if you have a lawyer who comes from Cayman and he likes working in Cayman and the law firm in London now knows that their colleague is in Cayman, it’s an automatic marketing link because our business is about relationships. Cayman really excels and extends its marketing reach through relationships… but as in any business, you’re constantly having to drive and expand your boundaries. In financial services the same will apply,” she noted.
Ms. Warren added that by next week, the BFSB is expected to release an analysis report that sets out what the board feels are some of the key challenges facing the industry and ways in which they could be addressed.
By Hadassah Hall, The Bahama Journal/B>
