The COVID-19 pandemic has exposed the inherent vulnerabilities and longstanding structural weaknesses of all Small Island Developing States (SIDS), including those in the Caribbean. These hurdles are loosely coupled to a lack of diversification with a heavy reliance on tourism, high levels of unemployment, significant levels of skills-job mismatch, low digital literacy, low citizen developer density, and external competitiveness gaps. Economic growth in the Eastern Caribbean has been uneven, averaging 1.2% over the past two decades. Before the pandemic, external shocks, including hurricanes and the global financial crisis (GFC) of 2007-2009, undermined growth, development progress, and poverty reduction efforts.
The GFC had prolonged negative consequences as economic growth has failed to recover to pre-GFC levels of 3.5% per annum. With ‘more of nothing’, the BVI, the Bahamas and Barbados have made significant progress in the digital transformation of many government services, having escaped the paradox of plenty. With ‘nothing in place’, others struggle. In the Eastern Caribbean, the pace of digital transformation and the enhancement of citizen experiences remain low despite numerous public sector modernization attempts. Recent efforts in St. Lucia and Grenada have shown some degree of success. However, cross-cutting platforms and registries are still in infancy, with projects like digital identification systems still being conceptualized.
Significant work is pending to ensure interoperability and integration between new and existing systems, across line ministries, departments, and agencies and across Caribbean countries where necessary. Digital transformation is a changeover from archaic architectures towards entirely new ecosystems. Ecosystems and architectures that support transport technologies like Uber, FinTech innovations like the digital Bahamian ‘Sand Dollar’, Neobanks like GreenSky, and just walk out shops like Amazon Go. In the BVI and Barbados, regulatory sandboxes permit the integration of FinTech into all areas of commerce. The end game is in vital adjustments to how businesses deliver value, increase efficiencies, reduce costs and build resilient supply chains. Caribbean enterprises unhurried to embrace automation will find themselves increasingly competing within a shrinking minority of the market.
Sandboxes bring together entities to do live testing of their products and services. This allows them to test the feasibility of innovations in real-world settings inside controlled environments. For the Regulator, it provides an opportunity to better understand the nature of the product or service and, by extension, to determine whether the existing regulatory framework is sufficient, or if a new type of legislation is needed. It is the case that rapid advances in FinTech innovations might not be captured under heirloom legislation.
The ultimate aim is to ensure that innovative technologies are not stymied, while at the same time protecting the financial system. The BVI has passed a suite of ‘e-Bills’ aimed to buttress the digital environment of the BVI and provide a cradle for all e-government services. The e-Bills are awaiting assent and will include, when they become law, the Electronic Transactions Act, 2019, the Electronic Transfer of Funds Act, 2019 and the Electronic Filing Act, 2019. These Acts will enhance the BVI legal system to legally recognise the filing, creation or retention of official documents with or by a government body using digital methods.
The BVI Financial Services Commission opened a ‘regulatory sandbox’ to applications since October 2020. The sandbox aligns regulation and innovation inside a delimited test environment and a bespoke supervisory framework, while shielding market participants. The outcome is new FinTech-related business models for the BVI. The 2019 amendment to the Financing and Money Services Act, 2009, extended the meaning of “money services business” beyond money transmission to encompass “electronic money”, “mobile money”, “payments of money” and other contemporary methods of money and payment transmission. The 2019 amendment also introduced a new licence (Class F), which permits the holder to carry on the business of international financing and lending in the peer-to-peer (P2P) FinTech market, including peer-to-business (P2B) and business-to-business (B2B) markets.
Digicel Jamaica intends to position Jamaica as a digital hub with an initial investment of US$200 million on networks and state-of-the-art broadcast facilities. The opportunities for economic empowerment are limitless due to the direct correlation between access to broadband internet and economic growth. Positioning itself as a Digital Operator via a suite of eight Apps and its data-loaded Prime Bundles, Digicel is empowering Jamaicans to be part of the digital future.
Digicel is now recognised by Ookla, the global leader in mobile and broadband network intelligence, as having Jamaica’s fastest mobile network, best LTE coverage and best fibre network. Now the Digital Operator is committing to a significant spend over the next three years to bring superfast internet to Jamaica with the buildout of a North/South fibre backbone, which will serve as the basis for the government’s National Broadband network, and the doubling of its TDD/LTE sites to bring affordable home internet to rural communities.
To put Jamaica on the map as a digital entertainment and content creation powerhouse, Digicel intends to build a state-of-art broadcast facility in Kingston that will become the new ‘Home of SportsMax’ by 2022. The facility will house a multi-purpose studio plus two ancillary studio sets and a studio control gallery. The facility will set a new standard in broadcasting and content creation in the Caribbean.