In this feature - part of the 2020 Bahamas Special Report - Brian Jones, managing director of Wealth Solutions discusses the changing world of fintech and how The Bahamas has demonstrated the ability to innovate in the investment funds and fiduciary services space.
In the world of travel, there was pre-9/11 and post-9/11. One day we strolled through airports as casually as taking a Sunday walk on the beach. And before we knew it, we were taking off our belts, sweaters, shoes and subjecting ourselves to pat-downs and three-ounce packages of toothpaste. Pilots were separated from passengers and we were separated from our water bottles. To our surprise, or our credit, we got used to the new norm.
We accepted it because deep down, we knew there had been a fundamental change in the way the world operated and it was never going to go back to the way it worked before.
Seismic
Today, we tiptoe on the cusp of another seismic shift. In the world of just about everything, there will be pre-Covid-19 and post Covid-19, modes of operating that will more quickly separate the past from the future than any peacetime event that has come before it.
At this moment we know what the past looked like. We can also surmise as to what the future will be as it relates to our everyday lives or in the always changing world of financial services and international asset management, but here are a few thoughts. Even in the face of unprecedented change The Bahamas remains an ideal location, ideally suited to meet client needs in the post-Covid 19 era.
Innovation will rule. As an international financial centre, The Bahamas has demonstrated its ability to innovate in the investment funds and fiduciary services space. Technological efficiency and effectiveness will drive further development the world of high finance.
Facial recognition
Facial recognition will not only allow the most innovative cruise line to fulfill its promise of 10 minutes from car to bar; it will allow us to slide seamlessly through security lines at airports, check into or out of hotels, and prove we are who we say we are whether charging the purchase of a new vehicle or collecting our retirement benefits, ideally while maintaining our privacy and data security.
The fierce, maybe even voracious, appetite for deep-rooted, broad spectrum technological advances will reap leapfrogging financial rewards, doing for investments what the Intel Core® Processor did to the Atom or Celeron processors, making them yesterday's hot solutions and today's cold toast.
Investments in real estate will remain stable, particularly in highly desirable, safe countries and those perceived as secure, including The Bahamas, but increasingly those investments will be made by means of digital transmission.
The use of digital assets will explode for everything from major purchases and investments to basic goods online. Five years ago, when I first began talking about digital assets, it had an almost futuristic ring to it.
Daring souls showed up at those early conferences, driven as much by curiosity as belief and countries began to consider how to regulate this new sector. To this end, The Digital Assets and Registered Exchanges Bill has been drafted and we expect that it will be passed into Bahamian law before the end of 2020. Gradually, the increasing emergence of types of blockchain and cryptocurrency fascinated the forward-thinking and struck fear in those who continued to feel if they couldn't see it, touch it, easily pay for it and get something tangible in return for the paper handed over, it just wasn't real.
Yet, a number of developers took risks and made sales, accepting digital currencies, such as Bitcoin, to develop futuristic ideas and businesses. Secure peer-to-peer value transfers to and from digital wallets were made possible.While more use cases are still being developed as adoption of digital currencies continues to grow, the primary use case at the moment is as a speculative investment. For those who play the markets, making money trading cryptocurrencies is not as easy as it might sound. Many were attracted to the possibility of quick gains and although a lucky few do generate positive returns, many end up losing money. Nonetheless, anyone who has conducted a digital currency transaction can confirm firsthand that the very nature of money is changing.
But the true widespread adoption of digital wallets came thanks to an unintended consequence of COVID-19 that forced shopkeepers to turn open signs to closed in an effort to contain the spread of the disease, causing more people to rely on the online life. Many learned the ease of ordering what they wanted online or via a mobile app, sitting back awaiting home delivery. Fast forward to the immediate future, storeowners and businesspeople who want to attract foot traffic will need to find ways to appeal to a public that will choose between fighting to find parking, traipsing through aisles hoping to find the exact product in the colour and size they want while trying to maintain social distancing, or stretching out, watching a made-for Amazon Prime movie and waiting for what they want to be delivered to them. Covid-19 has not slayed bricks and mortar, but it has awakened the sleeping giant of online competition and digital payment in places like The Bahamas, which is in the infancy stages of rolling out digital currencies and regulating virtual currencies and assets. The Bahamian Sand Dollar was launched just in time to mitigate against the adverse impact of the Covid-19 pandemic in a country made up of many islands.
As we spend more of our money and more of our lives online whether for purchases, entertainment or information, data analytics will become increasingly important. Sellers need to understand buyers. Who is watching what? For how long? What colours and sounds appeal to six-year-olds who influence parents' cereal purchasing behaviour? The need for data analytics combined with design thinking is becoming urgent and The Bahamas is perfectly suited to become the capital of hemispheric databases.
Why? Because The Bahamas has the strongest bandwidth in the region. The country is right on the edge with the fastest data connections through fiber optics cables. Hosting companies are running their operations and data collection from a data center right here in Nassau.
Ironically, while we are at the forefront of the new invisible reality, we are still stuck as a society in the age of paper. We conduct so many transactions manually, including title searches. Legal practitioners pour through old deeds and thick registers that could double as weights, search stamped pages of time-worn record books that need to be digitalized and then promptly placed in a historical museum as fascinating artifacts.
As people spin out of a certain skill, like stamping a deed to show it is recorded, then registering it in the record book, they can be moved into a more important and valuable job, helping to vet input data for fully digitalised public registry for quality control purposes, or learning how to read property appraisals accurately and know what to question should something seem amiss for enhanced risk management. Human capital is wasted daily on tasks automation can do when it would be better utilised on responsibilities for which there is neither time nor talent available to handle, leaving the most important work undone. As we move forward with the necessary digital transformations, any failure to truly advance our human capital resources could very well be our undoing.
When talking about data infrastructure and the need in The Bahamas for a proper land registry, key elements for a path to success post Covid-19, the interruption in business as usual also demonstrated our interdependence on the world as whole.
In introducing the first digital currency, the Sand Dollar, the Central Bank of The Bahamas looked at what others had done around the world. No one had to invent the wheel twice, nor refuse to take advantage of it because someone else designed it. The digital economy requires openness and cross-border collaboration so we must break the status quo and integrate deeper into the global community. We must embrace an open worldview knowing that the new business models that thrive in this environment are undergirded by flat, permissionless, decentralised, distributed global networks. The Bahamas is perfectly positioned lead in technology, innovation, virtual assets and digital age operations. [TM1]
Equally disruptive as it is exciting, this new digital world is already expanding here in The Bahamas and its impact is being felt in various ways. While on one hand, the current industrial revolution has implications for financial services firms, many of which must seek to modify their business models just to continue to operate. On the other hand, we are seeing opportunities emerge as a response to the Covid-19 crisis.
We have seen very promising innovation with the introduction of digital wallets in anticipation of the launch of the Sand Dollar, which will foster greater financial inclusion. Once we achieve mass adoption within the digital economy, we will begin to benefit from the network effects in capital markets, which will be driven by a fully digitalized regional junior stock exchange and crowdfunding platform. Then we will see the knock-on effect in other sectors with the creation and increased demand of hi-tech businesses and new high-paying jobs in areas such as data protection, cyber security and digital marketing. Technology also facilitates solutions that let us re-tool, innovate, avoid waste and scale up much faster even in more conventional industries, such as agriculture and fisheries, than was possible just a few years ago.
In this digital world, it has never been easier for people to access knowledge and to learn, unlearn and relearn skills that are needed to thrive. Therefore, as we deal with the disruptions caused by COVID-19, we should keep in mind a timely quote from Rahm Emanuel, former mayor of the city of Chicago and former White House Chief of Staff: "Never let a serious crisis go to waste. And what I mean by that is it's an opportunity to do things you think you could not do before."
by Logan at http://www.ifa-jobs.com
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