With the Financial Services Commission (FSC) currently conducting a comprehensive review of all FSC enabling legislation, to ensure a risk-based supervisory framework for the non-bank financial sector, credit unions are being urged to maintain established standards.
This appeal came last Saturday night as Small Business Minister, Dwight Sutherland, addressed the Barbados Cooperative & Credit Union League Ltd.’s 60th Anniversary Dinner and Awards Gala, at Hilton Barbados.
The Minister said: “Credit unions will be required to maintain practices consistent with established standards. They must ensure that appropriate risk management systems, scaled to size and complexity, are implemented and adhered to. There must be constant monitoring, reporting, measurement and management of risk.”
Acknowledging that the sector was important to the domestic financial industry, he said it was necessary to ensure that the framework for the regulation of credit unions evolved to ensure prudence, and that each entity was adequately resourced to administer and monitor the types of risks being undertaken.
“The Financial Services Commission is currently taking necessary steps to finalize the implementation of a fully risk-based approach to regulating all registrants including the credit union sector,” he added.
Stating that there were several benefits to be derived from the FSC framework, Mr. Sutherland stressed that this would enable credit unions to more efficiently and effectively focus resources on their major areas of risk, identify the risks in their current activities and services, and seek ways to effectively manage those risks.
He noted that a review of operations among financial institutions, over the last decade, showed a commonality of weak areas. These he listed as corporate governance; liquidity management; investment management; asset/liability management; capital management and operational management. “Many of these areas have been adequately addressed by some of our credit unions over time, but today some have not been able to demonstrate full competence in all areas,” he said.
The Barbados Cooperative & Credit Union League Ltd. was urged to note these key areas of vulnerability and work with its members on developing and strengthening their operational capacities. The credit unions were also told to be “acutely mindful of the benefits of business continuity planning, cyber security and the impact of man-made and natural disasters”.
Cooperatives also heard it was necessary to provide support to members through improving service standards and the quality of engagement. While the Minister pointed out that many industries, including credit unions, had embarked on enhancing their services though onboarding technology, he said financial technology, also known as Fintech, was a growing phenomenon, which could provide many solutions and improvements to their current operations.
The Awards Gala was held under the theme Your League: 60 years of Providing Advocacy and Developmental Services. Four employees received long service awards. These were Marisa Marshall, Wesley Bowen, Marguerita McClean and Anthony Pilgrim.
A number of past presidents were also recipients of awards, including Muriel Parris, the first female President, and Paul Maxwell, one of the youngest to have held the title.