By: the Bankers Association of Trinidad & Tobago
The Banking Sector In Trinidad And Tobago
As an indispensable facilitator of commerce, the local banking sector ranks at a sound 34 out of 137 countries surveyed in the World Economic Forum’s 2017-2018 Global Competitiveness Report. Recently, the International Monetary Fund (IMF), attested to the strength of the sector, indicating that it is well-capitalised with healthy balance sheets which enabled it to be profitable notwithstanding the fall in energy prices since 2014 and the associated economic shocks. The sector’s capital adequacy ratio, in 2017, stood at a solid 21.0%, while Return on Assets was a sound 2.4% with Return on Equity at 18.5%. Commercial banks continue to be the leading source of credit for firms and households as confirmed by the Central Bank of Trinidad and Tobago which reported a 4.6% rise in private sector credit granted by the consolidated financial system in 2017 of which 91.5% came from commercial banks.
Staying Ahead of the Game
ABM/CARD FRAUDWith fraudsters becoming more sophisticated, the commercial banks have had to enhance their fraud-fighting capabilities as they related to ATM and credit card scams as well as to a constant barrage of cybersecurity attacks. In addressing this issue collectively, The Bankers Association of Trinidad and Tobago (BAT)T has adopted a multi-pronged approach which includes training events on fraud prevention strategies for organizations, and information to customers on cyber crime, credit card and ATM fraud. At an individual level, the banks have taken concrete steps to improve its cyber vigilance and IT security infrastructure.
MONEY LAUNDERINGA significant concern for the sector is the effectiveness of Trinidad and Tobago’s anti-money laundering framework. Any deficiencies in the country’s legislative framework for anti-money laundering and counter- terrorism financing expose the financial sector to international censure, including significant penalties and the loss of international banking services for our customers. To mitigate vulnerability to money laundering, commercial banks continue to invest heavily in their compliance departments and IT infrastructure while working closely with the local anti-fraud agencies.
Empowering our Stakeholders
- Financial Literacy: BATT has for many years implemented, and or supported, a number of programmes that contribute to raising the level of financial literacy among our citizens. For 2018/2019, BATT has embarked on a heightened financial education drive for its stakeholders in both Trinidad and Tobago. As a key partner on the National Financial Education Committee, BATT will coordinate with other members of the financial sector to develop and deliver a national strategy on financial education. The National Strategy on Financial Education will serve to empower Trinidad and Tobago consumers and businesses to understand the significance of financial planning, credit and cash flow management, retirement savings and budgeting. As a sector, we have initiatives planned, aimed at reaching out to members of the public, through engagement in print and electronic media, workshops with SMEs, presentations to public and private sector groups, sensitization awareness activities in communities, as well as continued stakeholder engagement at various levels.
- Leveraging Blockchain Technology Blockchain technology is on the banking sector’s radar. While it recognizes that blockchain has thus far been primarily associated with cryptocurrency transactions, the sector has recognized the potential that blockchain technology can offer to banking and other sectors. For instance, the blockchain protocol can be incorporated into our banks’ Know Your Customer (KYC) infrastructure to digitize records or as a base for our financial services. While BATT promotes the stability of the banking sector, it also supports innovation consistent with elevating the sector and the country’s competitiveness thrust.
- Driving Cultural Change In its role as change leader, commercial banks are laying the groundwork for the Cheque Imaging and Truncation System which will activate real-time processing of cheques. At the same time, banks will accelerate their outreach to consumers on the ease and efficacy of banking. The end-game is to have greater migration of most routine transactions to electronic platforms while banking halls are used for value-added services.
- The Sector’s Outlook The banking sector is sound, flexible, resilient, proactive and it’s expected that all of the sector’s key performance indicators to remain in solid terrain. In short, Trinidad and Tobago will continue to have a banking sector that is built on delivering superior value for its customers and the wider economy.