More due diligence
Banks under pressure to place accounts under more scrutiny
Commercial banks in Barbados have to answer to more than their shareholders and local regulators and this is placing client accounts under heightened scrutiny and increased due diligence.
This was explained by Mark St Hill, Managing Director for Retail, Business and International Banking at CIBC FirstCaribbean International Bank when he addressed the first Barbados International Business Association (BIBA) luncheon for 2015 at the Barbados Hilton.
The luncheon, which was a joint effort between BIBA and the Barbados Bankers’ Association, addressed the topic Banking in 2015 and Beyond: Managing Risks, Meeting Expectations.
St Hill explained that correspondent banks – which are the intermediary banking institutions situated in large financial centres such as New York and London and which facilitated local commercial banks conducting business in other markets – were bringing to bear their international regulatory standards on how banks in Barbados operated.
Noting that correspondent banks were critical to the survival of the commercial banking system in Barbados, St Hill said that to ignore their wishes would be a significant threat to the industry.
During the presentation, contributions also came from a panel of experienced bankers inluding Debbie Browne, Manager for Legal and Compliance at First Citizens Bank, who acknowledged that banks needed to communicate to their clients that enhanced due diligence was now the order of the day.
Director of Business Support at Scotiabank (Eastern Caribbean) Roger Archer said that compliance was one thing that banks could not compete on and that when clients were considering banking fees, they needed to take into the account the administrative costs, opportunity costs and compliance costs associated with setting up and servicing accounts considered high risk.
St Hill opined that the heightened regulatory compliance being undertaken by the banking sector, along with Barbados signing on to information exchange agreements and the United States Foreign Account Tax Compliance Act (FATCA) intergovernmental agreement, would all bolster Barbados’s international reputation and contribute to the island achieving the status of a premier wealth management centre.