NASSAU, BAHAMAS — Scotiabank Bahamas’ top executive yesterday revealed that the commercial bank is hoping to this year pilot a fintech banking solution for the Family Islands.
Roger Archer, Scotiabank Bahamas’ managing director and head of the Clearing Banks Association, noted however that the regulatory environment currently does not support it.
While addressing the Business Outlook conference yesterday, he said that the fintech solution will be the result of a partnership between a foreign and a local fintech company.
“We have been looking at this for maybe the last four years. Last week we invited a partner to The Bahamas, a Fintech company that is going to partner with a local fintech company if this venture is going to be successful. We believe that the way to support the family islands in a sustainable way is through technology. We actually tested the technology last week and it works. We tested the technology on the simplest of phones. It doesn’t have to be a smartphone,” said Archer.
He added: “A part of the journey is how do the regulations support that. The regulatory environment currently doesn’t support it. That means it’s going to take us a while. We are hopeful we can pilot that this year. The technology we are looking at if we are successful in partnering with these two entities will allow us to serve all of the archipelago. We know the technology works it’s just the governance framework that’s needed.”
Archer said that the local banking industry has been significantly impacted by non-performing loans and a high level of loan delinquencies, the cost of which has had to be absorbed by the industry and not passed on to customers due to low industry growth.
Archer also noted that lending to small businesses has long been a challenge and not one that is unique to the Bahamas.
He said: “The reason for that is when we ask for financial statements they are not available. When we ask for records they are not available and transactions are done in cash.”
Archer said that moving to digital and electronic channels will provide the necessary data banks require and create opportunities to lend to small businesses.