JSC panellists: Government red tape a challenge to Fintech adoption

TRINIDAD AND TOBAGO has a great technological infrastructure, an educated population and innovators who have proven time and again the value of fintech (financial technology) to economies going into the fourth industrial revolution. But it was revealed that there is not enough adoption of fintech products and options.

Why? Wi Pay CEO and founder Aldwyn Wayne said in joint select committee (JSC) meeting held on Friday, on the implementation of a regulatory framework for the development of financial technology and e-payments, that the reason it is not being adopted by the general public is because of bureaucracy.

“It has nothing to do with infrastructure. We have TSTT and Flow. We have a bunch of fiber coming into the country. We have fantastic infrastructure, we have a fantastic educated population thanks to GATE. We have all the resources. The bureaucracy is the problem,” he said.

He also said bureaucracy was one of the reasons he moved his business from TT to Jamaica.

“We didn’t have the level of bureaucracy that we have when it comes to making simple decisions. If something works, use it. Don’t try to fill an agenda.”

John Outridge, CEO of the TT International Financial Centre (IFC) noted that regulations had to be developed especially in government institutions to treat with fintech.

“You have to understand this from a ministry point of view that has been collecting cash and reporting on the denominations of the cash manually then that goes to Central Bank. It is a completely new model in the financing perspective within government.”

He said instruction to allow for payments with credit and debit cards were approved for government offices.

Responding to questions on those people who are under banked and do not make use of fintech products said communication, education and financial literacy are key in increasing the adoption of fintech in TT, and any initiatives should be focused on those people who are not traditionally part of the formal economy.

He added that there were amendments to the Know Your Customer (KYC) measures were reduced to include people who were receiving below a particular salary level, but still, usage was low.

“We can’t look at fintech as a solution looking for a problem,” he said. “We have to determine what our problems and barriers are and what segment of the population needs to move to drive the adoption.”

The matter of trust in the security of fintech and digital records in the hands of the government was also raised.

Senator Jayanti Lutchmedial pointed out that she heard concerns from people over the fact that there isn’t a fully rolled-out data protection act and since there have been reports of private institutions being hacked the concern was raised even further.

Maria Daniel said that while the protection of data is a concern, the solution to that concern is education.

“If you think of where technology has gone the question is, what is the technology you are going to use and how do you make the public feel comfortable? This goes back to trust.”

“I think the solution is that people need to understand the security of digital technology,” she said.

Lutchmedial also knocked internet banking, calling it “horrible” saying that she has a bank account from a US based bank and it is easier to use in TT than her account from a TT-based bank. She asked if the TT Bankers Association had gotten on board with pushing fintech and assisting with the drive.

Wayne said that it is a misconception among many banks that they need to manage the technology of fintech as well as the finance. He suggested that the banks deal with money and let the tech companies deal with the technology to streamline the process.

“The banking sector is critical. Without the banking sector there is no fintech,” he said. “But the technology meets that last mile need. So if a customer needs a nice easy way to access your bank account with a nice app, let the fintech do that part and let the bank manage the money. They could be the best bank that they could be and use a tech partner to make the online banking experience great.”