Market responsiveness has long been a part of The Bahamas’ DNA as a forward thinking international financial centre (IFC), and has been the basis of legislation creating innovative, client-centric products and services in a modern, compliant regulatory regime. Such innovation can be seen in the country’s evolving and often ground-breaking trust and funds legislation. It led The Bahamas to become the first common law jurisdiction to introduce foundations. It sparked the Bahamas Executive Entity and has thrust The Bahamas into the forefront of the investment funds industry with the introduction of SMART Funds and the Investment Condominium (ICON) fund. And with this innovative spirit it should come as no surprise that the country’s once dormant insurance business is re-emerging as a sought-after destination for captives. As we seek to reposition the sector for long term growth and sustainability a key driver must be innovation.
Fuelled by a progressive investment climate that seeks to place financial services in the context of development innovation can become the hallmark of the sector.
There are untapped opportunities to leverage linkages between investment/business ventures and tourism than can be pursued by the financial services sector. Untapped resources that the sector can draw on for future growth built upon the foundation that we have solidified over the years by creating linkages between real commerce and attracting true international business to The Bahamas; international businesses whose mind and management are resident in this country evidenced by real physical presence and substantial connection. There are companies who are interested in doing exactly this due to our infrastructure and close proximity to the United States of America. This is a work in progress and the dialogue between government and private sector continues today as we seek to re-align our strategic positioning in light of the changing global landscape and international initiatives. It is in this context that we must consider the strategic importance of innovation as it relates not only to financial services but all aspects of The Bahamas.
Innovation in every sphere is required to support growth in the financial services sector. This includes the energy and telecommunications sector, product development and mechanisms for service delivery. Innovation is one of the four attributes defining the Bahamas financial services sector as identified by BFSB in its Bahamas Value Proposition for the sector, with the others being Location, Regulation and Expertise .Everything The Bahamas offers is defined by these four words. Everything that comprises The Bahamas value proposition and continued success as a leading international financial services centre is l be guided by these distinguishing factors.
A recent report on The Bahamas by Hedgeweek, a leading publication covering the investment funds industry noted “Innovation is ingrained in the psychology of the jurisdiction. One could almost think of the BFSB as creating an incubator for ideas and the sharing of ideas through its various working groups that are dedicated to various aspects of financial services”.
The same report quoted BFSB’s CEO Tanya McCartney as saying “There is a desire across industry and government to remain cutting edge, to remain viable and I believe that is what breeds innovation. We have to keep improving and consider new products and opportunities for our long-term survival. We understand what is needed with product innovation to meet the needs of these different markets. Therefore, we want to ensure that whatever new products we offer, going forward, are compliant and transparent. That will continue to be our focus.” Innovation however needs to embraced in more than just products being offered by the country’s financial services industry. It is a mantra that should be directed to everything that affects our development as a country and the financial services industry in both direct and indirect ways, in both the public and private sector. Most crucially it must apply to business innovation; solutions to create a more business-friendly environment where it will be easier for commerce, as a whole, can thrive.
Simply stated, innovation is the process of creating something new or enhancing existing ways of doing things. The last century has witnessed explosive innovation with dramatic results. Innovation makes our lives easier, enhances our productivity, improves our health, entertains us, and broadens our ability to communicate and connect on a global scale. Virtually every improvement in the quality of living in the past century can be traced back to innovation at some level. Innovation should be viewed a positive disruptive force. It’s a catalyst for creative thought, social and business solutions and a pathway for meaningful beneficial growth and maturity for all elements of a country whether it’s for individuals, business sectors or its institutional infrastructure.
An example of the latter is the innovative thinking combined with staunch determination that must be brought to bear on long overdue and much needed immigration policy reform. Immigration has always been a sensitive national issue and with justification, especially in our formative years as an independent country. But we are a more mature country now and Immigration reform needs to be considered in the context of development and creating jobs for The Bahamas rather than as a means to encourage an influx of foreigners which has always been a predictable but understandable fear factor.
Immigration policy and process reform would not only foster stability in the financial services sector which is re-engineering itself but will lead to job creation in other sectors of the economy, investment in education, expand the Bahamian middle class and will increase the financial contribution of the sector to the overall economy.
Short term we need to address the Immigration process. It needs to be predictable and streamlined. At the same time there is an urgency to formulate new policy initiatives that balances the interests and needs of the financial services sector and the Bahamian business community in general with those of other elements of Bahamian society. There is much that we can do buttress the financial services sector, it all begins with the will to take bold new steps, embracing innovative ideas and stepping outside of the traditional boxes that we have confined ourselves to over the years. Collaborating with government, the Bahamas Financial Services Board is committed to leading this charge.