Categorized | National News

Innovation Needed For Financial Services Sector

For years the Financial Services Sector has been on the decline, with hard and fast facts to support this, according to President of The Bahamas Institute of Chartered Accountants, Gowon Bowe, who said that to turn things around calls for innovation.

Appearing as a guest on Love 97’s show “On Point”, Mr. Bowe said that with the number of banks that have made transitions in recent years, there is a need for creativity.

“I think you can look at hard and fast numbers to see the decline in terms of those employed in the Financial Services Sector.

“We’ve seen a tremendous withdrawal of the private banks. So if you look at all the major names in the private banking industry, they have either downsized or they have consolidated with other institutions or they have completely left the Bahamas,” Mr. Bowe said.

“What we have to be innovative. Think about the phone card industry that went from street vendors, to booths, to now franchise stores,” he said.

Mr. Bowe specified a number of small businesses that started out as a one-person job but are now expanded operations.

“Then we look at the car wash industry that again was a person with a bucket and sponge, now with huts and expanded operations.

“We haven’t taken that same creativity into Financial Services and say the wealthy are still being wealthy and getting wealthier

“They still need very specialized and very confidential treatment, they just are no longer anonymous. And what is the product that we as The Bahamas want to present to them to be that new innovative, but necessary instrument that we are selling?” Mr. Bowe asked.

When asked by the show’s host what could be done to loosen the grip on money in the domestic market, reducing dependency on foreign direct investment, Mr. Bowe said that pooling resources in the key.

“One basic word we fail to do is pooling.

“Persons look at the banking excess liquidity and forget that only way a bank has excess liquidity is by virtue of deposits that have been placed.

“Who are those deposits from? Bahamians.

“So, when you place your money into a banking institution and you are unwilling to get together, the three of us are here, [each with $100,000], none of us are getting interest on our investments.

“Would it not make greater sense for us to say that in order to start an enterprise it would be easier if we had $300,000 where would then actually be eligible to borrow money because we have a greater deposit towards the enterprise that we want to start?

“We have three entrepreneurial minds that have ideas and can then formulate, each using his expertise, in terms of putting a business plan together, and then simply going to the bank and saying I would like to withdraw my money in order to do something,” Mr. Bowe explained.

As to how things are shaping up for the country overall on the economic front, Mr. Bowe said he thinks the problem is sensationalism.

“I believe our problem is that we have lived by sensationalism. For so many years when bad news hits it becomes front news and when good news hits we over emphasize it like we have cured all ills.

“I think when we look at our economy, there are a few things we have to take into consideration. Our tourism product based on our natural asset has provided us a tremendous benefit over the years and our financial services of the past created some very talented individuals.

“What we have allowed is our complacency unfortunately to creep in,” Mr. Bowe said.



Written by Jones Bahamas

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