De­spite Min­is­ter of Fi­nance Colm Im­bert set­ting a tar­get of De­cem­ber 2022 for this coun­try to be­come a cash­less so­ci­ety, the pub­lic has been slow to ride the wave of dig­i­tal fi­nan­cial trans­ac­tions on of­fer in the coun­try.

Dur­ing a pan­el dis­cus­sion ti­tled “Har­ness­ing the Evo­lu­tion of Dig­i­tal As­sets in Re­shap­ing the Fu­ture of the Cap­i­tal Mar­kets for In­vestors” at the T&T Stock Ex­change’s 40th an­niver­sary con­fer­ence at the Hy­att Re­gency on Fri­day, sev­er­al stake­hold­ers in the bank­ing sec­tor re­vealed while there had been in­vest­ment in dig­i­tal ser­vices by tra­di­tion­al banks, the habit of pay­ing with cash and card re­mained preva­lent.

Chief ex­ec­u­tive of­fi­cer of Re­pub­lic Fi­nan­cial Hold­ings Ltd Nigel Bap­tiste said the bank’s End­cash fea­ture was slow­ly gain­ing mo­men­tum.

“The End­cash ex­pe­ri­ence for Re­pub­lic Bank has been quite an in­ter­est­ing one and it speaks to, I be­lieve, some of the chal­lenges that even the evo­lu­tion of dig­i­tal as­sets in terms of re­shap­ing the cap­i­tal mar­ket will en­counter and that is fa­mil­iar­i­ty and that is ac­cep­tance. That is peo­ple break­ing from the norm,” he said.

“Peo­ple have be­come so ac­cus­tomed to us­ing ei­ther cash or a card that the idea of us­ing nei­ther has kind of tak­en a lit­tle while. It is gath­er­ing some mo­men­tum, it does fa­cil­i­tate per­son-to-per­son, per­son-to-busi­ness, busi­ness-to-busi­ness with­out cash ex­chang­ing hands at any point. And we see it as just one as­pect of what the fu­ture will hold from a tech­nol­o­gy per­spec­tive but in­creas­ing­ly as we look around the world an in­creas­ing­ly im­por­tant one,” Bap­tiste said.

Mod­er­a­tor for the dis­cus­sion, T&T In­ter­na­tion­al Fi­nan­cial Cen­tre CEO John Out­ridge not­ed that last year more than two-thirds of re­tail pay­ments in the coun­try were con­duct­ed via cash.

“In 2021 cash with­drawn over-the-counter com­mer­cial banks was about $3.5 bil­lion US. Cash with­drawn from ATMs with about $4.1 bil­lion US. So that num­ber is $7.6 (bil­lion). Deb­it and cred­it card pay­ments with about $3.6(bil­lion). So all of our to­tal re­tail pay­ments mon­ey go­ing through T&T was $11.2 bil­lion, we see that ba­si­cal­ly 68% of that was done in cash,” Out­ridge said,

Oth­er rep­re­sen­ta­tives from the bank­ing and fi­nan­cial sec­tor al­so not­ed that there were some nec­es­sary grow­ing pains as they at­tempt­ed to co­ex­ist with fin­tech start-ups as the banks ac­knowl­edged that their in­no­va­tions would be here to stay.

Deputy CEO of the First Cit­i­zens Group Ja­son Julien said, “We are lega­cy in­sti­tu­tions, we have large skills we have a large pres­ence, but are some­times slow to move in some ar­eas.

“We are very good at some things and slow­er to learn oth­er things. We have recog­nised this, and in a sense, fin­techs as the name sug­gests are al­most fren­e­mies to us. We have al­liances with fin­techs. We join forces with them in some spaces term fi­nance is an ex­am­ple of that and in some spaces, we com­pete head on.”

He said how­ev­er this cur­rent pe­ri­od was a nec­es­sary learn­ing curve for these in­sti­tu­tions.

“We recog­nise the fact that these al­liances are nec­es­sary and re­quired for us to con­tin­ue to evolve and com­pete and con­tin­ue to be rel­e­vant and to find more ef­fi­cient ways to de­liv­er ser­vice to our cus­tomers,” said Julien.

But it is an evo­lu­tion that the sec­tor has ac­cept­ed that will hap­pen soon­er rather than lat­er, with all in­volved mak­ing moves to in­te­grate dig­i­tal op­tions, if not em­brace the dig­i­tal ap­proach al­to­geth­er.

ANSA Mer­chant Bank man­ag­ing di­rec­tor Gre­go­ry Hill ex­plained the bank moved to a cloud-based plat­form in 2019, which al­lowed the bank to quick­ly re­vamp its op­er­a­tions dur­ing the COVID-19 pan­dem­ic.

He said, “We are build­ing for the long-term growth of our bank­ing ac­tiv­i­ties. I think it’s com­mon­ly known that we pur­chased a com­mer­cial bank and re­brand­ed it ANSA Bank, and I’m hap­py to say that lat­er this year, we plan to launch a dig­i­tal bank­ing ap­pli­ca­tion that will al­low cus­tomers to have hope­ful­ly pain-free bank­ing ser­vices.”

Unit Trust Cor­po­ra­tion ex­ec­u­tive di­rec­tor Nigel Ed­wards ex­plained that the com­pa­ny had learnt from its ini­tial en­try in­to the mar­ket as the sole op­tion for mu­tu­al funds where it learnt that it could not ex­pect to hold that po­si­tion in­def­i­nite­ly. Ed­wards not­ed that UTC had to em­brace ex­pan­sion as well as dig­i­tal evo­lu­tion to main­tain its pres­ence in the sec­tor.

“The on­ly way that you can do that and do that suc­cess­ful­ly in to­day’s world is to lever­age dig­i­tal tech­nol­o­gy and dig­i­tal as­sets avail­abil­i­ty. So not un­like Gre­go­ry and his team with ANSA Bank.

“We’ve gone with an en­tire­ly cloud-based sys­tem,” he said, “I won’t say much about the fu­ture, but it’s not dis­sim­i­lar to Nigel (Bap­tiste) talk­ing about End­cash. Be­cause there is no rea­son why peo­ple need to car­ry around cash in the fu­ture. And the way we think about it, there’s every rea­son to al­low unit hold­ers to be able to set­tle with­out the need for cash. And that’s what this tech­nol­o­gy is al­low­ing us to do.”

The pan­el unan­i­mous­ly agreed that the dig­i­tal ap­proach would play a sig­nif­i­cant role go­ing for­ward in the in­dus­try, how the RFHL CEO be­lieved while fin­techs were in de­mand now, he ex­pect­ed the tra­di­tion­al banks to out­last them.

Bap­tiste said, “I think it’s in­evitable. Whether it will be dig­i­tal on­ly might be open to de­bate. I think the chal­lenges with dig­i­tal-on­ly would prob­a­bly be be­cause of the bar­ri­ers to en­try oth­er­wise, but they will face a ma­jor chal­lenge be­cause I be­lieve most of the fi­nan­cial in­sti­tu­tions who are around at the mo­ment can al­so even­tu­al­ly of­fer dig­i­tal so­lu­tions to their clients.

“So you will have the op­tion be­tween a com­bi­na­tion of dig­i­tal-on­ly if you want­ed from your ex­ist­ing fi­nan­cial in­sti­tu­tion, dig­i­tal and in per­son or in per­son. So even­tu­al­ly we’ll have a buf­fet but dig­i­tal-on­ly bank­ing ser­vices are in­evitable. If some­one choos­es it”

He said, “There will be many cat­e­gories of fin­techs. The ma­jor­i­ty of whom will not make it right over time.”

He ex­plained that their sur­vival would be tied to their over­all use­ful­ness to the busi­ness and fi­nan­cial sec­tor, “ I do be­lieve that the fin­tech sec­tor has a num­ber of chal­lenges to over­come and in my own view, there are re­al­ly three cat­e­gories of fin­techs that have some kind of a long-term fu­ture. I think the first cat­e­go­ry of fin­tech are go­ing to be peo­ple who will help busi­ness­es whether it be a fi­nan­cial in­sti­tu­tion or any oth­er busi­ness, be­come a bit more ef­fi­cient as they go for­ward. And you can pick whichev­er cat­e­go­ry you want to go in­to.

“I think the oth­er cat­e­go­ry of fin­tech that has some kind of a long-term fu­ture are the ones who will help busi­ness­es maybe gen­er­ate ad­di­tion­al rev­enue lines, what­ev­er that might be. And the third cat­e­go­ry of fin­tech is go­ing to be the ones who ac­tu­al­ly helped with the plumb­ing, which is where peo­ple like the pay­ment ser­vice providers can come in­to it.”

The pan­el al­so ex­plained that oth­er dig­i­tal cash al­ter­na­tives such as cryp­tocur­ren­cy and NFTs were al­so be­ing con­sid­ered, but reg­u­la­to­ry ad­just­ments from the Cen­tral Bank would be re­quired to ac­com­mo­date such an in­te­gra­tion.