A new look at FinTech in the Caribbean
By Ryan R. Peterson
Fishing is one of the core livelihoods in the Caribbean; a tradition that has transcended the test of times and transformations across many generations and islands. Likewise, small businesses across the Caribbean, despite anemic financing, continue to fish for opportunities. And they may soon have their catch of the day.
Accounting for well over 90 percent of our economic seascape, small businesses and entrepreneurial start-ups often still face significant financial challenges throughout their lifecycle, from raising capital and seed funding to receiving mobile payments and securing increasingly more digital wallets and international markets.
These challenges are certainly no mystery to many of us who have ventured across the Caribbean, which is one of the most remittance-intense, tourism-dependent regions in the world. With almost 50 percent of the Caribbean being unbanked or underbanked, it doesn’t take a ‘smart fish’ to imagine the potential and promise of financial technologies – a.k.a. FinTech – for enabling financial inclusion and building economic resilience.
More than simply an app, digital currency or chain technology, FinTech is a nascent digital ecosystem designing and delivering a wide range and reach of financial products and services, including payments, credit, investment and insurance. Unlike previous waves of financial technologies, FinTech is a catch from different waters – beyond the boundaries of traditional financial services, in addition to its prowess and pull from emerging and next-generation markets.
From Aruba to Barbados and across the Caribbean, digital natives such as arubits, bitt and caricoin are fishing unchartered seas. With an estimated global value of US$ 25 billion and the potential to boost economic growth by a good 3 to 5 percent, Caribbean FinTech is likely to become a force of transformative nature. One that will not only disrupt traditional financial incumbents and institutions, but more importantly, develop and invigorate much needed economic innovation and social inclusion throughout the Caribbean. This catch may well nurture new livelihoods and create new Caribbean traditions.
Ryan R. Peterson PhD is General Manager for Economic Policy at the Central Bank of Aruba. All views and expressions are solely his. He can be reached at rpeterson-at-cbaruba-dot-org.