The Caribbean is a highly attractive destination for foreign direct investment. However, there is intense competition among countries in the region to secure increased foreign contribution. What, in your opinion, are Antigua & Barbuda’s most significant advantages compared to other countries in the region?
Well, a key attribute is the fact that it is a sovereign territory. It is a distinguishing feature for financial centres, because in the Caribbean there are financial centre jurisdictions that are dependencies of the United Kingdom. As a sovereign jurisdiction, I believe that our independence is being valued as an attractive differentiating advantage. Also, the fact that we are a small jurisdiction is considered an advantage, not just our geographical size but as a financial centre. When you combine the value of deposits held by both the international financial services centre and our local commercial bank deposits, the value is still less than US$5 Billion. So, if one tiered the risk associated with a jurisdiction by its size and impact that could disrupt the world financial stability, Antigua would be deemed as very, very low risk.
We are generally identified as a “safe harbour”, not only as a significant yachting centre of the Eastern Caribbean, but also as a provider of wealth management preservation services and by being attractive for foreign direct investment opportunities. Historically, Antigua was identified as a safe harbour right after the First World War by a group of wealthy Americans who came here and established second homes at the Mill Reef Club. It was a group comprised of successful US bankers and business persons. Why did they come to Antigua? Because they were looking to find a place, which was natural, was not overcrowded and people were friendly and they considered a safe place to invest in a second home. The same is true today and you will see that when you compare the tourism landscape to the other islands. For example, when you go to Barbados and you look at the seafront you may hardly see unoccupied space. Here, it is a different experience when you can drive around the island and enjoy the ample sea front space across the breadth of its boasted 365 beaches. If you are a real estate investor looking to develop properties with beautiful sand and sea assets and very clear blue sea, you can find your own piece of paradise in Antigua and Barbuda.
The banking sector in the Caribbean in general is very competitive, with a range of financial services offered in the Bahamas, in Barbados as well as in many other well-known Caribbean jurisdictions. What sets Antigua & Barbuda’s banking sector apart?
We like to think of Antigua as the crossroads of the Caribbean for financial services. We are well positioned as the most northern of the East Caribbean chain of islands. Our connectivity is excellent, and we have a new and modern airport terminal which is already showing its benefits by attracting new carriers and additional connections. The combination of being a highly valued tourism destination and also the utilization of its financial services make it an attractive destination for investment.
We are also in a good time zone to effect timely and same-day services/trading with North American and UK markets. We are becoming more attractive to some South American countries that recognise the business benefits to use a location, like Antigua, for the purpose of their trading business because the timeframe works better for them. There is a growing sector of Latin American business that now work through the banking sector in Antigua in order to fulfil purchases and trade with China and other countries.
Our banking sector is also balanced with services for international financial services and domestic commercial banking, with a supporting environment of relevant legislations, experienced attorneys-at-law, and world class audit firms. The environment for foreign direct investment is given the comfort of all these professional services to assist the evaluation and implementation of potential investments.
The global economic crisis affected nearly every single financial institution in the country. How did it affect your banking group and what measures did the banks use to minimize its impact/losses?
We were fortunate and blessed. The financial crisis started mostly with major international banks issuing badly managed mortgages that become toxic. In the Caribbean we have always held a good standard for the rating of credit and I think that discipline is what assisted us to be able to breathe and to move our domestic banking sector forward. On the international side, we do not do any heavy lending, and ensure that strong locally based collateral is established to secure any lending. We did not see any type of reduction in our deposit base that was as a result of any lack of confidence in our financial sector. But, of course, the financial crises had an impact on the national economy and consumer savings held in Antigua. We were able to survive the storm and now we are rebuilding a much stronger banking sector based on the lessons learnt. I think the banking sector both locally and internationally have learned important lessons and we have to be a lot more vigilant as we progress forward.
Mr Brian Stuart-Young, the financial sector in Antigua is diversified and competitive. What makes Global Bank of Commerce attractive? What are the bank’s competitive advantages over other players in the sector?
Well, Global Bank is the oldest institution in Antigua providing international financial services so it is often considered as a “grandfather” of international banking here. When anyone is seeking international financial services, the stability of the institution is paramount, so the longevity of our institution is valued. Secondly, our institution is locally owned, we provide global services but our heritage is Antiguan and Barbudan. The knowledge that its ownership and its management are local, I think, helps to support and build trust in our institution. Thirdly, we provide very personal service and our staff members are very understanding, we have family environment and they try to convey that type of relationship in the business services. Our institution also provides services to the Government of Antigua and Barbuda and is supportive of its vision to position Antigua and Barbuda as an “Economic Powerhouse”. You cannot fulfil that vision without having the support of the banking sector. The goal of the administration has been to look for public and private partnerships to foster economic development.
As A&B looks to become an Economic Powerhouse for the Caribbean Region, it is strongly focused on attracting a rising number of foreign investors and business people. Given Global Bank of Commerce offers Personal, Commercial and Private banking, as well as offers multi-currency accounts, including USD, EUR and GBP and strong correspondent banking services facilitating world-wide wire transfers, this could only benefit the bank. What kind of experience does GBC have with foreign investors/business people and how are you looking to reach out and capture more International business?
For GBC, our core business is to work with international investors and families and we have more than 33 years’ experience of serving them, even some from generation to generation. I can tell you that you don’t operate for over three decades without seeing the good, the bad and the ugly. So we have had a wealth of experience and have learnt how to manage issues, be compliant with evolving regulatory standards, and conduct high-quality services for our clients. We are working with clients that may not be resident and therefore have had to build a strong technology base for compliance and customer communications as well as secure online banking services. Clients must be comfortable and confident that through their fingertips they can control their account and that geographical distances make no difference to their required services.
Part of our expansion plans is to streamline payment convenience. We have become the first bank in the region to be a card issuer and acquirer for the Chinese product called China UnionPay. UnionPay is the payment system equivalent to Visa or MasterCard. In fact there are more UnionPay cards issued than Visa cards. So part of our program is to support the expansion of financial services from China into the Caribbean which has not really being a focus of attention previously. So we believe that we have a role to play there; even its Renminbi currency becomes more internationalized.
In a world that is exponentially more universal and competitive, innovation is crucial for any company’s future survival. How does GBC incorporate innovation into its work?
We strongly believe in the necessity for innovation in financial services. Generally, we find that financial institutions have been lazy in that matter. The last big innovation that banks collaborated on was really to establish Visa and MasterCard as payment services. Since then the innovation has come from non-bank service providers like PayPal. So we decided to implement our own Fintech version here to improve payment services using financial technology. The first thing that we did was to establish a significant processing centre called Global Processing Centre which is certified by VISA, MasterCard and now China UnionPay. It is an entity that not only works for our bank but also with other banks. Currently it is serving banks from Guyana in the south of the Caribbean to Haiti in the north. We are even serving hundreds of ATMs in Canada.
Having established a processing centre, we then developed our own alternative payment system. You may have heard of the product called SugaPay. We like to say it is the “sweetest way to pay”. SugaPay is our home-grown version of a PayPal-type system, and we load a stored value either on your identified cell phone or a SugaPay card. The difference is that our private label product will be more cost efficient for the merchants and more convenient for consumers. So we expect to actually help to change the lifestyle of Antiguans and Barbadians in how they are doing payments. For example, the government has established an on-line payment service for persons making payments for government services, including the renewal their driving licence or obtaining an E-Visa for visitors coming to Antigua. There are some gas stations that have started to take it, as traditionally none of the gas stations take payments by Visa or MasterCard because they cannot absorb the transaction cost.
So SugaPay reduces costs?
Oh yes, it is far more attractive. It will play a significant role I believe in how the government implements the ability for the citizens to pay on-line for government services. This will also improve our standing in the ease of doing business. It is going to change how we think about payments. We believe that will open the new business payment opportunities. Instead of being paid by cheque or cash, people can be paid by SugaPay and their cell phone will get a sms with the transaction confirmation. They can see their card balance on their phone. If they need to get money, or send money they will do it phone to phone. So Fintech technology has been part of our work and we are happy to be able to introduce this into Antigua and Barbuda. Simultaneously we are working on establishing the product in other Caribbean islands.
Mr Stuart-Young, CSR is a useful measure for helping the communities in which you work and giving back to your hard working personnel. Is the company involved in any kind of CSR projects or programs here in Antigua?
I could say: practically all. First of all we are very faith based group so we give thanks to our good Lord for our success and therefore part of our philosophy is to participate as much as we can and as our budget permits. We are one of the major supporters to a project here, which is called “The Care Project”. This project is about children who are disabled and might otherwise be left behind. Some of them are autistic and we have helped to sponsor special therapists to train staff who cater to the children. These are children whose families sometimes do not really understand what is happening. With the assistance of Ministry of Health and the hospital we are trying together to raise funding to be able to have a better establishment for them. So we do things like that as well as give a lot of support into the community.
The Caribbean nation of Antigua and Barbuda is focussed on economic development. What does that mean to you?
The building of our national infrastructure is a key element to improve economic development. We have had diplomatic relations with China since 1983, and undoubtedly China has become the most important foreign ally for economic cooperation to Antigua and Barbuda. China gave us a concessional loan establish a new and modern airport terminal, and now they are facilitating a further concessional loan to modernize the St. John’s Deepwater Harbour Port. These modern entry points will open up new opportunities for tourism and commerce, and improve the ability for Antigua to operate as a transportation hub.
On a more personal note, you have an experience in both private and public sectors for national and regional entities How have those years of experience in different positions influenced your work today? And what advice would you give to someone looking to start their career in the financial sector?
Well, the financial sector is actually the backbone of any economy and just like your body will have issues and take certain risks. So too do financial services have risks. I always say if you are not able to manage the risk don’t get into this sector because you cannot operate risk free. The difference between the financial sector and other business ventures is the bankers’ fiduciary role and understanding that they are managing depositor funds, not their own, hence the prudential care that must be taken to manage and mitigate risks in the protection of depositors.
To conclude the interview, as you know, the readers of Harvard Business Review include many of the world’s most influential business and political leaders who’d like to learn from other leaders. What message would you like to send them about Antigua & Barbuda and Global Bank of Commerce?
I think all leaders will know that the greatest thing about leading is to keeping yourself open to learning. For me the greatest excitement is exploring how financial services could be modernized. I believe that the next 10 years is going to be so exciting and relevant for modernising financial services, and much of the development will be through the Fintech process. I believe that the way we work with financial services today will be greatly improved and therefore I want to make sure that Antigua and Barbuda is well positioned to be in the centre, the heart, the hub of financial innovation, and perform as a leader for regional financial services.