Recent years have been extraordinarily challenging for international financial services, an industry which serves as the second pillar to the Bahamian economy and in which we have a long established and distinguished history. New competitive threats have emerged, large traditional onshore players bare their teeth to protect their turf and international bodies whose constituents consist primarily of the world's largest economies successfully seek to impose tighter control over their tax bases. The future of the industry is at stake. It is with this backdrop that we must now chart a new course to buttress our economy, secure the future of those who work directly in the sector or benefit indirectly from financial services.
Competition in any industry is a healthy market condition and the threat of competition has never been a challenge that The Bahamas has been unwilling or fearful to face. In fact, The Bahamas insistence on a level playing field regardless of the size of the country or its economy has served the country well and preserved its status as a responsible international financial centre. However, as pressures mount many question the long term viability of the financial services as a critical plank in our economic architecture. While the threat of competition is one thing even more formidable is the relentless pressure that will continue to be applied by various international bodies in the areas of transparency of financial affairs, cooperation in the application of international standards and compliance on tax related issues.
In short, The Way Forward for The Bahamas Financial Services Sector is littered with obstacles and challenges that cannot be ignored. Some such as international initiatives are beyond our control yet must be regarded and acted upon in the same even-handed way that the Government, with input from organizations such as BFSB, has responded in the past. Others are of our own making and must be addressed with the same level of commitment.
By way of background, it should be noted that post the 2000 legislative changes, industry recognized that there was a need for a holistic strategy for the sector in order to remain competitive. Initially the IDB was consulted with respect to funding of a strategic review of the sector. Eventually, industry determined to engage Deloitte and Touche to prepare a strategy for the sector in collaboration with industry. The project work commenced in 2008 and the strategy was eventually rolled out in 2010 at the International Business and Finance Summit (IBFS) hosted by BFSB.
The 2010 strategy focused on market opportunities and the enablers that had to be in place to realise the identified prospects for growth for the sector. In 2010 BFSB identified several market opportunities that focused on Brazil and broader Latin America, Hong Kong and the wider Asian Market, US Trust & Fiduciary Services, Funds, Insurance and Shipping. Although it is generally recognized that success has been achieved in some of the opportunities, limited tracking of progress against targets/action plans has been performed, therefore no definite judgment can be made on overall success.
Earlier this year BFSB, with the technical support of EY (Ernst & Young), undertook research to update the 2010 strategy and develop a Future State Roadmap for Financial Services, to facilitate the strategic positioning of the financial services sector having regard to the systemic challenges affecting growth and long term sustainability of the industry. The updated 2016 strategy consolidated existing market opportunities into the following five areas; Latin America, Asia, US Trust & Fiduciary, Funds, and Innovation and will serve to guide us as we run while changing course. It specifies the source of the data required to measure each individual target, in addition all action plans will be assigned an owner and target completion date. A governance structure for the revised strategy has also been established to track actions and targets.
Emerging from the Roadmap is an evolving Bahamas Value Proposition based on four vital features at the heart of what distinguishes The Bahamas as an international financial centre of significance: Regulation, Expertise, Innovation and Location. The Bahamas Brand for financial services is defined by these distinguishing features. And everything that comprises The Bahamas value proposition and continued success as a leading international financial services centre is to be guided by these distinguishing factors.
As a country heavily engaged in financial services, The Bahamas bears the responsibility and a commitment to the international community of which it is intricately involved, the financial institutions operating within our borders, the clients which it serves and the Bahamian people which rely on the sustainability of the industry for continued economic development.

The Bahamas has always sought to provide superior financial products and services and a world class client experience. It has proven itself to be nimble and responsive to global changes - always mindful of the need to adhere to international standards with respect to compliance, cooperation and transparency. Solving the lingering systemic challenges impeding The Way Forward for the Bahamas Financial Services Sector will require same nimbleness and resolve.
Some of the obstacles and challenges that the sector faces today are within our control to mitigate the impact of global changes and reposition our course. BFSB is advocating for and collaborating with The Minister of Financial Services on a balanced and considered approach to strategically positioning the sector based on our defined value proposition. Growing the financial services sector cannot be achieved by being reactionary. It is critical, therefore, that we address those things that are within our control in a focused manner. These include being more responsive to global change, enhancing our immigration policy to leverage our expertise and location, improving ease of doing business to create a business friendly environment that allows us to create linkages between commercial investments and financial services. We must also do all within our power to reduce the risk profile of the Bahamas as an IFC so as to lessen the threat of de-risking initiatives. These systemic challenges are well known by both government and the private sector who must now work together in earnest for the well-being of the sector.
Future columns will focus on each aspect of our value proposition and what must be done to reposition the sector for long term growth and survival.

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