Cayman is being positioned to take advantage of emerging new digital trends in the financial and other sectors.
Experts assembled online for the 2021 fourth annual Cayman Islands Digital Economy Conference (CYDEC) have been looking at how the jurisdiction can 'more fully immerse itself into the digital revolution', especially in banking and finance.
The event was held under the theme 'Cayman Islands 3.0 - Putting Cayman on the digitisation track'.
Giving the keynote address remotely, Hon. Minister for Financial Services, Investment, Innovation and Social Development, Andre Ebanks, said the future for Cayman “in this space is very bright” and that the necessary legislative framework is being developed.
“This will be an area that the Cayman Islands really wants to keep up to speed with,” Min. Ebanks told the delegates from Cayman and overseas assembled virtually this year for the event.
Looking at the broad picture of the benefits of digitisation, Min. Ebanks outlined several opportunities for the Cayman Islands.
“I think we will be looking ahead and welcoming more industries in terms of digital banks, green finance-related blockchain transactions that will financially support initiatives to counteract climate change, smart contracts verification protocols which balance computation with privacy preservation to offer blockchain solutions to the financial markets.”
He said, "The overall vision of this government is to ensure that investment in innovation not only assists those who are well-off, but also the most vulnerable in society."
A priority area for the government is the proposed digital national ID project.
“What we want to be able to do as part of the government initiatives is ensure that there is a seamless transfer of data observing proper data protection protocols, so you don't have to have clients or applicants, running from one department to the next to supply information to one government entity when the information is already held by another technology can help with that,” Mr Ebanks explained.
Spelling out the details of the digital ID system, Director of eGovernment, Ian Tibbetts, said data confidentiality, security, and convenience will be key principles.
“The register is founded on the principle of data minimization,” he said listing “convenience, transparency, control of your own data, and improved access to government services.”
Making the case for Cayman from a more global perspective, Caribbean economist and consultant Marla Dukharan, one of the expert panellists for CYDEC 2021, noted that Cayman already has the foundation in place to lead in this area both within government and the private sector, especially in digital currency services.
“Digitising government services means fiscal savings, increased collections of government, new and improved efficiency in the deployment of public spending,” she said.
“Increased productivity, and therefore increased and better wellbeing by digitising payments, government payments, it becomes much easier to increase the number of government services that can be delivered completely online.”
From a technological standpoint, Cayman has an ecosystem ripe for research,” Ms Dukharan pointed out, noting that “the penetration of cell phones and internet means that a large part of the battle is already won.”
She mentioned the technology hub Cayman Enterprise City as an example but urged that more emphasis needs to be placed on implementation and streamlining, while pointing to an existing paradox.
Ms Dukharan pointed out that the Cayman Islands is the largest source of outbound remittances in the entire Caribbean sending “1.4 times more remittances than Colombia, which is a country of 50 million people.”
“However,” she said, “we haven't made it easy for these workers to send money home.” Referring to the current 13 per cent rate for every CI$100 - she said “that is just too much for the lowest income earners to be paying.”
Ms Dukharan suggested instead that lowering the rate and sending remittances in digital payment dollars which she argues will pay off in “keeping Cayman competitive and attracting the world's best talent.”
The high-profile regional economist also questioned Cayman’s slow response to changes in digital finance.
“We can look to other markets and see some of those technologies and solutions have been deployed by their banks. Why haven't the banks in Cayman deployed these types of technologically-enabled solutions?”
“We need to remember that we should not expect the Cayman domestic banking sector to be in the business of nation-building if they are not indigenous, the same phenomenon has been witnessed here in Barbados,” she concluded.
The forum also delved into the possibilities for Cayman in the field of digital and cryptocurrencies, with contributors noting that governments and central banks around the world are now being forced to look at how they could embrace the technology.
As one panellist put it “Initially a lot of people are sceptical, but I think we've sort of crossed that initial phase now.You have to ensure that you're adopting it, or you will eventually be left behind.”
CYDEC conference founder and organiser Paul Byles has stated: “The purpose is on how digitisation can help to improve the various aspects of our lives. It's also about putting the Cayman Islands on track; most developed countries have had formal institutional structures in place to foster technological innovation and awareness in this area for years.”