Minister in the Ministry of Finance, Ryan Straughn, is calling for a closer working relationship with the credit union movement to assist in enhancing their safety net to protect members from risks posed by online transactions and actions.
Mr. Straughn made this appeal today as he addressed participants attending the Barbados Deposit Insurance Corporation’s (BDIC) Bank Intervention Simulation at Courtyard by Marriott Hotel.
He reasoned that the inclusion of credit unions as “part of the ecosystem” was necessary since they “were now systemically important financial institutions”.
“In the same way that they are important systemically, then obviously, we now need to ensure that there is a level of coverage and participation, recognising.the potential risks that they may be exposed to, to properly ensure that we safeguard our citizens accordingly,” Minister Straughn stated.
The “evolution and revolution” within the financial sector, along with the emergence of technology, he pointed out, has made it easier for fraudulent activity to occur.
“Our security systems have to be ‘beefed up’ because online phishing is one of those things that could undermine the integrity of any financial institution in Barbados…. Therefore, collectively, our financial participants must work collaboratively to ensure that we mount a very strong robust response to cyber security, in order to give our citizens the comfort that when we do our business, whether…at home or…as we travel, do things and interface publicly, that we know that we have the infrastructure in place working collaboratively with regulators outside of Barbados to protect the stability and integrity of our financial system,” Mr. Straughn said.
He continued: “These issues today are front and centre of our policy considerations because when BDIC started in 2007, we didn’t have online payments in the way that we have today. E-mobile apps and payment services ecosystem have revolutionised in the last 17 years and will continue to evolve. Therefore, we must be cognisant of the need not just from a legislative perspective…, we also have to consider the IT infrastructure that we are setting up with respect to our financial institutions.”
The Minister queried whether in the event of a failure there was sufficient operational oversight by the regulators – the Central Bank of Barbados, the Financial Services Commission, Ministry of Finance and the BDIC – to take “action overnight” to contain the situation.
“I believe that this workshop is particularly important, and I want to say to Barbadians that this is nothing sinister that is happening here this week…. This is real life work that regulators have to do every single day on your behalf, and therefore, I welcome the opportunity to engage, understand, and learn from the experiences of what is happening outside of Barbados.
“This is important and to ensure that we work collaboratively as regulators…to say to Barbadians that we are doing the work that is necessary not just for today, but to ensure that we set in motion, the set of processes that will allow us to keep pace with what is happening globally…”, Mr. Straughn emphasised.
The Minister also spoke about the importance of communication in the event of a failure to clear up any misinformation, and to keep the public abreast of any action that was triggered by the BDIC.
Mr. Straughn noted that Barbados had one main asset, which is stability, be it at the political, financial, and social levels, and if a bank failure had to occur, it would have a significant impact on the country.
“In a small country like Barbados, bank failure or the notion of a bank failure will have a significant impact on all of our lives. Therefore, as we go through these exercises and understanding not just from the operational side what needs to happen, but from our perspective, the Central Bank as well as the Financial Services Commission, working collaboratively with BDIC, is important for us to see the signals well in advance, in order to ensure that BDIC never has to implement anything that we may simulate this week. And I think that is the basis on which I preface my remarks because stability is the only thing that can keep Barbados above board,” he said.