Jurisdiction in Focus: Barbados

While emerging markets may share some – but not all – of the characteristics of their larger, more developed counterparts, it is expected that as they transition from their lesser developed states, their focus will be on key indicators like increased trade volumes, foreign direct investment, levels of liquidity in the local equity and debt markets, and the modernisation of domestic regulations governing the operations of regulatory and other financial institutions.

Over the last two decades, the most notable emerging markets experiencing rapid growth were Brazil, Russia, India, and China – now known affectionately as the ‘BRIC’ countries. South Africa was later added to this illustrious group, necessitating the simple expansion of the acronym to the ‘BRICS’ countries to reflect its addition.

Remittances and other funds being sent from one island to another island, that can be virtually seen on the horizon just across the water’s edge, tend to be routed through an extra-regional counterparty bank for onward settlement to the recipient in a neighbouring island. Not surprisingly, while there has been the moderate adoption of embryonic FinTech solutions, this has predominantly concentrated on payments innovation.

Anecdotal reviews indicate that cash remains the main form of payment for small-value transactions up to US$50, and tends to switch to other forms of payment for large-value transactions. Naturally, this reality presents a potential efficiency gain that could be spurred by FinTech innovation in the Caribbean region’s financial markets.