The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor has urged financial institutions to “accelerate their thinking” on using agency banking to offer services in the Family Islands amid efforts to roll-out the necessary regulations in 2024.

John Rolle, speaking at Friday’s opening of Fidelity Bank (Bahamas) new Exuma branch, reiterated that the expansion of digital and electronic banking - combined with reduced reliance on cash - remain critical components in the regulator’s strategy as it seeks to “guarantee access to basic banking” for Family Island residents.

“I would therefore like to stress several points as regard the approach that the Central Bank is taking to promote access to banking and financial inclusion for all of our communities, many of which still have less than what is available in Exuma,” Mr Rolle said.

“The first is that financial institutions are encouraged to accelerate their thinking around agency banking, meaning relying on outsourced arrangements to connect with - and provide services to - persons in the Family Islands. The Central Bank is developing a regulatory framework to facilitate and encourage such arrangements, which we would like to have concluded in 2024.”

Fidelity Bank (Bahamas) has teamed with Cash N’Go in its Exuma venture, with the latter set to act as its “cash partner”. Gowon Bowe, the BISX-listed bank’s chief executive, last week said it aims to create a new business model that it hopes will enable it to “penetrate” other Family Islands.

“We have the new business concept and new equipment, and cash partners. We’re certainly excited to see if this business model works, and if it does we should be able to penetrate a number of the islands with a suitable model for a cashless bank but with a cash partner,” he added.

Explaining that Exuma was targeted for the first branch in part because of its extensive population growth, Mr Bowe said Eleuthera, Long Island and Bimini are the next locations being eyed for the new Fidelity Bank (Bahamas) Family Island model. This is because of similar or anticipated population growth

Mr Rolle, meanwhile, reiterated that there is no escaping the role digital and electronic banking will play in ensuring Family Island residents have access to an acceptable standard of financial services that allows them to conduct routine transactions and payments.

“A second point is that Exuma still typifies financial inclusion challenges, which will have a digital component to resolution. Fidelity, and all of our licensed financial institutions, will have a role to play in this process,” Mr Rolle added.

“It means also having the capacity to provide the onboarding leg for services through digital channels; taking P2B (platform to business) payments capability beyond credit and debit cards, to safe and interoperable mobile phone applications; and equipping all businesses and individuals with the options to send and receive payments digitally.

“This financial inclusion vision, in which we foresee the Government also playing a role, also requires an entrenched push to improve the quality, access and reach of the wireless telecommunications infrastructure,” the Governor added, in a nod to both the Bahamas Telecommunications Company (BTC) and Aliv.

“It has to consider treating data as an essential consumer item from which no one is denied access when it comes to the ability to complete financial transactions and it should, from the contribution that the Central Bank expects to make, guarantee access to basic banking or payments accounts for all persons in our community.

“Where the Central Bank’s impact can be felt, we will be rolling out further regulations and policies as early as 2024, in consultation with our financial institutions.” Bahamas Power & Light (BPL) will also have a critical role to play in digital banking’s evolution by ensuring a reliable, consistent and affordable supply of electricity that allows such services to function.

“My third point of emphasis is about cash,” Mr Rolle affirmed. “Cash is not going to disappear from use. We accept that. However, it is costly to store and transport, is administratively less efficient for businesses to keep track of, aggravates security and money laundering concerns and, in all of these respects, is costliest to maintain on the Family Islands.

“Therefore, it is in our national development interest to reduce our reliance on physical cash. Again, for financial inclusion to be positively impacted, all persons in The Bahamas must have the right of access to digital money and other alternatives to cash.

“This is also the direction we are continuing to push at the Central Bank. Also, we are commissioning work in the area of the Sand Dollar on how peer-to-peer and P2B payments can still be safely and securely completed when persons lose data connections.”

Mr Rolle said inclusion was inextricably linked to resiliency in a tourist-dependent, international business economy. “How do we ensure, after a hurricane, that commerce is swiftly restarted, financial services are quickly resumed, and the ability to provide critical social assistance promptly enabled?” he added.

“The experiences of Abaco and Grand Bahama after Hurricane Dorian gave us a good baseline for where the improvements can be centred. Again this underscores the work that we must continue to advance to ensure digital payment services and digital financial inclusion.”

The Governor hailed Fidelity Bank (Bahamas) business model as an example of “the innovative approaches which are necessary to extend banking, and especially modern payment services, to the Family Islands”.