Interview: Nigel Baptiste

In what ways have new financial banking instruments impacted growth in 2019?

NIGEL BAPTISTE: For most sector players, the impact of new financial instruments is only becoming evident now. Moreover, 2019 has been a year of consolidation, as clients grow more comfortable with different technologies. However, there have not yet been any serious shifts in terms of how banking is done. This has been a transition year for financial systems globally. It will be interesting to observe the impact of Brexit and what developments will arise from recent conversations between the US and China. The Caribbean and many other countries will continue to be affected by ongoing worldwide social and economic developments.

What concrete actions should be taken to boost the number of cashless transactions?

BAPTISTE: The major providers of cash-based services are governments. When they decide to change their operations to cashless and digitalise operations, Caribbean countries will naturally follow suit.

In Trinidad’s case, the government has made some legislative changes towards direct payment into accounts, which will eliminate mailing, cheques and cheque accounts. The government must also consider providing electronic payments to service providers, motivating people to create accounts and making it easier for the financial system to move customers deeper into digital channels. There are many different vehicles available to make transactions cashless, but the most important development will be how governments choose to transform their approach to doing business.

How is the sector preparing for a combination of low growth and high household debt?

BAPTISTE: The banking sector in T&T has been preparing itself for this type of challenge for many years. One way of addressing the problem is digitalisation, which uses a dual approach that is driven by both customers and efficiency.

Currently, banks are readily prepared to restructure relationships and look at cash flows, making sure that all dealings with clients can withstand high levels of household debt and slow economic growth. That way, both client and bank finances are more sustainable. Low growth is not necessarily a bad thing, and may enable an overall re-evaluation of what we, as a country, are doing.

In an environment with high growth, there can be little time to stop and reflect, while in low-growth environments we must focus on the essentials. Banks and clients alike have been optimising operations, and when Trinidad emerges from this period our institutions will be stronger.

Where is the banking sector positioning itself with regard to the rollout of e-money solutions?

BAPTISTE: Providers such as WiPay have developed technology and identified a need that the banking sector has not been providing. While we could try to replicate what they are doing, it is easier to establish mutually beneficial partnerships with them.

There have always been clients who are less comfortable with newer technologies and rely on in-person and relationship-based banking services. We do not expect this to change. However, we also have a new generation of customers who do not want to come to the bank and who would rather do their business on their own schedules.

Banks, therefore, have no choice but to bridge the two types of clients. Some have tried to push people into digital channels, and in some cases this has led to negative fallout and lost clients. The smartest approach is to offer a variety of different channels, so that when users change and evolve, banks can work with them as opposed to coercing them.