FINANCIAL SERVICES SECTOR EVEN MORE ECONOMICALLY IMPORTANT, NEW STUDY SHOWS

By Staff Writer

The Cayman Islands’ financial services industry is even more important to the economy and government finances than earlier figures suggested, according to Cayman Finance, a non-profit membership organisation that promotes and lobbies on behalf of the territory’s financial services sector. 

It’s widely accepted that the financial services sector is a key pillar of the economy, but new research commissioned by Cayman Finance underlines the extent to which the territory relies on its continued success.

In a press release, it states that the study reveals that the sector generated CI$2.5 billion in gross value added (GVA) in 2023, accounting for 44% of all domestic economic activity.”

It further points out that once indirect and induced impacts are included, the industry supports 62 per cent of Cayman’s total economy, up from earlier estimates of around 50 per cent.

That means that the financial services sector alone now accounts for more than half of the economy.

According to the report, the sector is also the source of almost two-thirds (65 per cent) of all government revenues, making it the single most important pillar of public finances.

It also shows that for every additional dollar spent in the financial services industry, another 91 cents is generated through suppliers and local consumption, amplifying the sector’s impact.

An underlying message appears to suggest that any disruptions to it could be counter-productive to both the sector and the wider economy and society.

“Despite its outsized economic and fiscal contribution, the industry relies on a comparatively small number of expatriate workers, with just 2,800 work permit holders in 2023, far fewer than, for example, in construction and tourism.”

The report comes at a time of renewed government focus on getting Caymanians further directly involved in the economy via business ownership, jobs, education, and other areas.

Significantly, the report reflects that over half of the sector’s 6,724 jobs are held by Caymanians, and 60 per cent of its workforce are female. It also shows that the industry relies on a comparatively small number of expatriate workers, with just 2,800 estimated work permit holders in 2023.

“The report also highlights the financial services industry’s strong local employment, as about 54 per cent of the 6,724 financial services jobs are held by Caymanians, compared to just 29% in construction and 17% in tourism. The sector is the Islands’ largest employer of women, with nearly 60% of its workforce female. Around one in five women in the workforce is employed in the sector,” the release said.

Steve McIntosh, CEO of Cayman Finance, which commissioned the research, stated: “These findings show that financial services do even more for Cayman than many realised. The financial services industry is not just the largest driver of government revenue and economic output, but also an engine of opportunity for Caymanians, especially women.”

Mr McIntosh also said: “Financial services deliver extraordinary value for Cayman and are central to the Islands’ prosperity. Our industry delivers more with fewer expatriate workers than any other sector, while remaining deeply committed to developing Caymanian talent.”

The study was done by Capital Economics for Cayman Finance. The full report will be published at the end of this month