Entering a new year, the regional banking sector is still an industry under siege. External threats such as de-risking, blacklisting and volatile global financial markets continue to exert pressure on bankers while advances in technology provide both new opportunities and new risks.
Despite the foreboding climate, Wendy Delmar, CEO of the Caribbean Association of Banks (CAB) is optimistic. The veteran banker, a former President of the Bankers Association of Saint Lucia, believes that rigorous training and education, greater collaboration with regulatory bodies and a focus on the future will ensure the sector’s survival and sustainability. She shares her thoughts with STAR Businessweek on last year’s challenges and what lies in store for the sector and the CAB in 2020.
What were CAB’s biggest successes in 2019?
WD: We held our first training day for CEOs and Directors, supported by our partners, Deloitte. We also had our first pre-conference training day, which was facilitated in collaboration with the Florida International Bankers Association, and we signed a number of agreements which will raise the profile of the CAB.
I am proud that our annual conference, which is really a trademark event, is also now an accredited event. We are delighted that we were able to host a number of training sessions. I am a big fan of education and having had those engagements was a huge satisfaction point for me.
What does your role as CEO of the CAB involve?
WD: Identifying issues which will impact the regional financial services sector [and] developing strategic plans to present to the Board of Directors to address those issues. Also, engaging leaders at all levels to assist in bringing awareness to critical factors for the betterment of the membership and growing the membership. I’m also involved in planning and executing training activities for members in line with changing needs and demands on the industry, and creating a platform which encourages sharing of news, information, best practices and successes within the industry and industry leaders through effective networking.
You are a past President of the Bankers Association of Saint Lucia. How is it different running a national body in comparison to a regional group?
WD: The responsibilities of the CAB CEO are far more robust and, as such, one must remain very much aware of what is happening locally, regionally, internationally and globally, as all of these events can have far-reaching implications for our relatively delicate economies. My role now requires that I maintain high involvement with all the Bankers Associations of the region as opposed to having only a bird’s eye view of what obtains locally.
As we move into not just another year but another decade, what were the challenges of the previous decade and what do you predict will shape the sector in the years to come?
WD: The principal challenge of the past decade would have been de-risking, and the loss of correspondent banking relationships. It is critical that we find short-term and long-term solutions to this vexing problem.
Presently, we can say that Caribbean banking is evolving. We are witnessing the departure of Canadian banks, and an interesting landscape is emerging. As we see consolidation among smaller banks, larger Caribbean banks extending their reach and new foreign ownership is coming in with fresh approaches.
A recent roundtable brought the US and Caribbean together to discuss de-risking. How hopeful are you that these discussions will lead to real solutions?
WD: Every engagement with the persons and entities who can shape change will hopefully be met with a level of seriousness and with well-researched discussions being brought to the table.
I am hopeful that as the recognised voice of the banking sector, we can strengthen the relationships with all participants to also become part of the discussion process or, at the least, be in a position to contribute information which we believe to be pertinent discussion points, as part of the preparation process for our regulators and governing bodies.
Despite all efforts to appease the Caribbean Financial Action Task Force and its international counterparts, the threat of blacklisting is still very real in the Caribbean. What must jurisdictions do to reassure international regulators?
WD: Firstly, I think that we must work not only to appease the regulators but most importantly we must work to keep our industry and our economies safe. We must ensure that we revamp and revise regulations as and where necessary, to stay abreast of and, in most instances, ahead of the changes that impact us as a region.
Regulatory updates are a critical part of the ability of the islands to respond swiftly to changes and external shocks which impact the perception of the islands, as well as our ability to trade on the world market. Assessments done in countries with action items must be seen as more than just a form-filling exercise or a check-box exercise and become part of our DNA to show our willingness to keep up with changes impacting our participation on the world stage.
How much has technology impacted banks in the region, and where are you seeing innovation?
WD: Globally, the banking sector is one of the leading investors in artificial intelligence. We have an unparalleled opening to be not just early adopters, but leaders in that sphere, with the right investments, not just in solutions and technology, but in people. It can, of course, be challenging for small organisations – which most Caribbean banks are – to justify spending large amounts on technology. But it is clear that canny spending in that sphere is necessary.
Without a doubt, the Caribbean has the human resource to position ourselves as leaders in financial technology, and we are seeing some of that already emerging with tech start-ups in Barbados, Curacao, Jamaica, Saint Lucia, and Trinidad and Tobago, among others.
Beyond commercial banking, it is exciting to see that central banks across the region, led by the Eastern Caribbean Central Bank (ECCB), have been embracing the concept of digital currency. This will not only place the region in the global vanguard, but also be of significant benefit to our economies. CAB has gone on the record congratulating the ECCB for taking this bold step.
The theme of the 2019 CAB Conference was ‘Shaping a New Era in Caribbean Banking’. What does that mean to you?
WD: The paradigm is changing. Caribbean banking, and how it fits into the global industry, is changing. It was in that regard that we opted to talk about redefining the way we do business, and how we can innovate for success, at our 2019 conference in Sint Maarten.
How banks work with government regulators, what the future holds in terms of fintech, how we mine and use data, how the emergence of data as the world’s leading commodity is revamping the way we think about security, and how we can use technology to enable and enhance compliance – those are all examples of how we must redefine the way we conduct our affairs in the modern era.