NASSAU, BAHAMAS — The Bahamian financial services industry must be more ‘homegrown’ with a greater domestic and regional focus, a well-known industry executive said yesterday.
While addressing a CFA Society of The Bahamas webinar, Kevin Burrows, Founder & CIO, Diomedea Capital Advisors Co Ltd said that in ten years the Bahamian financial services industry will likely be much smaller.
“It will be a smaller industry, certainly less European in terms of the banks, clients and senior management personnel,” said Burrows.
“We have to make our industry more homegrown and make our industry more regionally and domestically focused. We have to apply our skill set to the management of our own savings and investment eco-system. I think that’s really the future.
He said: “I’m talking about the whole Caribbean not just the Bahamas. We have to develop that domestic pension management industry, we have to get involved in venture capital, private equity and infrastructure in our own home.”
Burrows noted that in years past, there was greater local control over the Bahamian financial services industry.
“Back then we really had discretion over what we were doing,” he continued.
‘We had management here and the senior Bahamians in industry played a critical role in the delivery of that service. Fast forward to today and what’s happened from then to now is that changes have been imposed on us. The EU and OECD began their, I would call it, racist assault on the offshore centres.
Burrows said: “We know it’s more than just taxes and money laundering. I think the bigger impact on our industry was the consolidation in our banking system which led I think to the more interesting and skillful parts of our industry being moved back to the various head offices.”
“It left us with an industry that is on average less skilled than our onshore colleagues, and not for a lack of ability but there has been a lack of that opportunity and training from that early stage to get you up to a level where you should be to put that knowledge in action.
He added: “I think it is has also put our cost structure out of whack compared to the value added that we are giving in the industry. We are exposed to the cycle of downsizing and automation because the value added versus the cost of hiring us just isn’t balanced.”