​​Speech by Mr. Kevin Peter Turnquest, Deputy Prime Minister and Minister of Finance of the Commonwealth of The Bahamas​

Opening Remarks: Global Symposium of Regulators "​Living in a World of Digital Opportunities"​

11 July 2017, Nassau, Bahamas   

Good morning ladies and gentlemen,​ 

It is an honor for me to bring remarks to you, at this Global Symposium of Regulators.  The timing of this conference is impeccable and is aligned with the core of this Government's strategy to use innovation and technology to improve productivity in The Bahamas.  Indeed, we have embraced this new digital world and continue to see the many possibilities and opportunities that exist. 

Let me begin by saying that like many countries in our region, The Bahamas is extremely well connected.  In 2016 The Bahamas boasted the following key statistics[1]:

• Mobile voice penetration rate of 95 subscribers per 100 inhabitants;
• Mobile data penetration of 53 subscribers per 100 inhabitants; and
• Residential fixed broadband penetration of 74 subscribers per 100 inhabitants.

With such an abundance of technology available, the opportunities are endless. 

In my brief overview today, I wish to touch on three areas of opportunity that stem from this increasing digital world:

• The Opportunity for ingenuity and innovation;
• The Opportunity for abuse; and
• The Opportunity for regulatory innovation.

Opportunities for Ingenuity and Innovation 

Ladies and Gentlemen, 

I recall the days when if you wished to pay a bill, you would have to drive to the location and stand in a long line to access the service.  To send money to a loved one required driving to the bank and standing in a long line.  In many instances the drive alone was daunting requiring a commute of more than an hour to get to the nearest bank.  Now, with the advancements in technology such as mobile banking and e-transactions this can all be done from the comfort of your chair while in your office or simply by using your mobile phone.  

Ladies and Gentlemen, 

The reality of e-commerce provides tremendous opportunity for business.  As a government, we must ensure that our educational systems tool our people (young and old) to be able to take advantage of these opportunities.  

As an entrepreneur myself, I am always pleased to see businesses embracing technology to reinvent themselves.  In The Bahamas, I have witnessed the courier industry move from simple face to face interactions to integrated e-commerce systems which utilize technology to track packages, send notifications, interact with customers and receive payments.  This is progress. 

Opportunities for Abuse 

Ladies and Gentlemen, 

The second issue that I wish to address is the opportunity for abuse, as we fully embrace a digital world.  While the new advances in technology are important and can provide tremendous opportunities for growth and development, we should also be aware of and address potential threats.  Just a few years ago in The Bahamas, a local business establishment reported that its website was hacked.  The perpetrators held the business' online portal for ransom in an attempt to the extort funding.  Throughout the globe we have seen similar attacks and hackings at institutions which form the backbone of any economy such as Financial Institutions, Central Banks and electricity companies.  In some cases information is lost, potentially forever, or stolen and publicly released.  

In the G7s 2017 Communique from Finance Ministers, paragraphs 14 and 15 highlight the importance of the mitigation of Cyber Attacks.  I quote, 

"In light of the increasing digitalisation of financial services and the evolving cyber threats landscape, it is important to pursue effective approaches for assessment of cyber security at the financial firm and sector level as well…. 

…We recognise that cyber incidents represent a growing threat for our economies and that appropriate economy-wide policy responses are needed. No point of cyberspace can be absolutely secure as long as cyber threats persist in the surrounding environment…."[2]

End quote 

As these attacks become more frequent, they severely damage the level of trust placed on our institutions, industry and even the technology itself; resulting in losses to our economies.  No investor is interested in trading with a country or depositing funds in a financial institution prone to cyber threats.  We must jealously protect our digital footprint and ensure the highest level of data protection available. 

Opportunities for Innovative Regulation 

Ladies and Gentlemen,

This brings me to the issue of appropriate regulation and also internal controls. 

I am happy to report that almost two months ago the Central Bank of The Bahamas held public consultation on the framework for oversight of e-money framework.  This includes regulations for payment instructions, electronic retail payment instruments and electronic money products. 

This is an important move for The Bahamas, with over 20 populated islands, separated by miles of water, with some persons living in remote and inaccessible areas, many of which with no nearby banking facilities.  Indeed, digital financial inclusion is a priority.  Further, with approximately 20 percent of the Bahamian GDP being derived from financial services, particularly offshore banking, the potential economic impact to The Bahamas cannot be understated.  To reap the benefits, however, we must ensure that these new products are managed and consumers are protected. 

Indeed, then, as countries embracing the digital road, we must set standards and regulations which protect consumers and protect the very nature of a digital economy – trust.  Without trust that systems work and that they will be fair to us as consumers, the digital economy will fail to operate.  We will revert to face to face, transactions.  That is an unacceptable state of affairs. 

As the G7 points out, we must share our best practices and approaches.  We should develop model legislation and cooperate on technical assistance so that there are no "weak links" in our system.  In an integrated world, we are as strong as our weakest link.  We must cooperate in investigations and share information, as appropriate to detect and bring to justice those involved with cybercrimes. 

Conclusion

Ladies and Gentlemen,

I conclude by re-emphasizing the importance of this conference and the dialogues, deliberations and discussions to be had over the next three days.  Truly we are "Living in a World of Digital Opportunities" and it is reshaping the way we live and how we do business.  There are opportunities for innovation, opportunities for mischief and threats and as regulators – there are opportunities for building and ensuring trust in a system through prudent regulation. 

Thank you.

[1] See URCA Annual Report http://www.urcabahamas.bs/download/094821600.pdf

[2] See http://www.g8.utoronto.ca/finance/170513-communique.html