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QUARTERLYTHE CORPORATE NEWSLETTER OF THE TRINIDAD AND TOBAGO IFC

Apr. 2020 - Jun 2020ISSUE 24

APR-JUN 2020ISSUE 25

Welcome! Chandradath Maharaj, Vice President Financial MarketsDevelopment

Untapped Benefits Can Be Derived From FinTech Solutions

Investment Promotion In A Digital Era

Data Analytics & Data Science Programme

FinTech TT Update

CEO’S MESSAGE

IN THIS ISSUE

This edition of the Quarterly is our 25th and marks a significant milestone in consistently reporting on our ongoing work as the agency responsible for Financial Sector Development. Over the years, we have updated you on the first Finance & Accounting (F&A) Shared Services Centre to be opened by Scotiabank, facilitated in part by the Trinidad &Tobago International Financial Centre's (T&T IFC’s) lobbying for legislative change; our co-hosting of Latin Finance’s Caribbean Investment & Finance Forum; various training programmes o�ered by the T&T IFC to upskill our F&A professionals; and in more recent times our focus on making Trinidad & Tobago a FinTech-enabled Financial Services Hub.

This issue details how the T&T IFC, in the face of COVID-19, was able to leverage our Business Continuity Plan and maintain seamless operations over the April-June period. Apart from our everyday activities, we hosted a ‘virtual’ inward mission for a prospective Australian-based F&A Business Process Outsourcing (BPO) investor; completed training in Data Analytics and Data Science for over 200 persons and progressed the operationalisation of the FinTech Association of Trinidad and Tobago (FinTech TT).

This is not to minimise the impact of COVID-19 on global markets and, by extension, the feasibility of investors being converted in the short-term, and the macro- and micro-economic challenges we are facing and will face in the near future. However, it speaks to our nation’s overall resilience and ingenuity that

allowed us to manage COVID-19 in a manner that was independently acknowledged, as it prevented community spread and saved lives. COVID-19 o�ered a moment of tense reflection – highlighting gaps that must be filled but also showcasing our innovative capacity.

In this regard, the T&T IFC believes that full implementation of our FinTech Roadmap, which was developed in late 2018, and in particular its pillar of ‘making T&T a Cashless Society’ will assist greatly in the national recovery e�orts. Therefore, to support government's policy development in this area, we submitted a position paper proposing short- and medium-term recommendations to create the enabling ecosystem for FinTech development. At the same time, we continue to collaborate with the Central Bank and other regulators, and have onboarded Chandradath Maharaj as our Vice President, Financial Markets Development to head up these and other related e�orts. You can read more about these developments in this Quarterly.

I wish to recognise the ongoing guidance of the Board during this time, and the unwavering commitment of the Management and Sta� who rallied and delivered consistently during a particularly dynamic quarter.

Omar Sultan-Khan

Digital transactions also improve and promote transparency and security by increasing the accountability and tracking of money transfers within the economy. This is linked to a reduction in the cases of fraud, money laundering, tax evasion, drug tra�cking and counterfeit notes. The Ministry of Social Development and Family Services in Trinidad and Tobago implemented the Direct Deposit system in 2017 to transfer social security payments to address the challenges of stolen cheques. In the case of India, the digital delivery of subsidies removed the incidence of leakages through “ghost” intermediaries and resulted in an estimated fiscal saving of US$2 billion (George and Subramanian 2015). Digital payment platforms have also been encouraged by Swedish banks to prevent robberies, whilst debit/credit cards and digital wallets are encrypted with passcodes or biometric authentication to safeguard against theft.

Macro-economic benefits are realised from the increased use of digital payments. Employment has increased because digital payments have encouraged new business formations such as FinTech companies and microfinance institutions. The increased access to formal credit and savings instruments also enables the financial system to capture more savings and, in turn, extend more credit which increases the level of aggregate investment. Moody’s extrapolation of the e�ect of card usage on consumption and GDP using the data from 70 countries, revealed that higher card usage contributed an additional US$296 billion to consumption between 2011 and 2015, or a 0.1% cumulative increase in global GDP, as well as an average increase of 2.6 million jobs (Zandi, Koropeckyj, Virendra and Matsiras 2016).

Digital payments are associated with reduced cost and increased savings. VISA’s study revealed that businesses would save 2.1 cents of every dollar if they accepted digital payments. Additionally, Automated Clearing House (ACH) transfers reduce the cost of printing and mailing paper cheques and indirectly reduce the cost of resources utilised by the government to replace lost or stolen cheques. Digital payments also reduce the cost of minting. The likelihood of additional charges for late payment of utility bills are also reduced with digital payment.

Digital payments are faster, more convenient and improves the timeline for data analysis. Digital payment facilities allow 24-hour access to funds and have reduced the need to be physically present at a bank, or to stand in a queue to withdraw cash from Automated Teller Machines (ATMs). Wages are now paid directly via the Automated Clearing House (ACH) platform and utility bills can be paid at the convenience of a single ‘app’ without any hassle. Many mobile wallets have allowed for payment authentication via fingerprint scan or a personal identification number (PIN) in the past, while MasterCard was first to introduce “selfie pay” technology, which uses facial recognition.

Digital payments also allow for the facilitation of purchases and payment during times of viral pandemics such as Ebola and COVID-19. Mobile Wallet use in Sierra Leone during Ebola increased timeliness of salary payment to Response Workers, improved patient care and strengthened the capacity to contain the disease (Bangura 2016). Many financial institutions and the World Health Organisation also guided customers to use digital payments during the COVID-19 pandemic. It was clearly supported to ensure social distancing while allowing individuals to access financial services without making in-branch visits or using cash.

The government, financial sector, citizens and merchants of Trinidad and Tobago can only attain these benefits if there is a transition to a broader financial space with increasingly innovative digital payment options. The T&T IFC continues to echo the call for the development of the local FinTech ecosystem to improve the ease of doing business in Trinidad and Tobago and to expand the country's potential.

References Alderman, L. (2018, November 21). Sweden's Push to Get Rid of Cash Has Some Saying, 'Not So Fast'.A.T. Kearney & VISA. (2018). Digital payments and the global informal economy. Bangura, A. (2016). Saving Money, Saving Lives: A Case Study on the Benefits of Digitizing Payments to Ebola Response Workers in Sierra Leone.George, S., & Subramanian, A. (2015, July 22). Transforming the Fight Against Poverty in India. Herwadkar, S., Verma R., & Bilantu, P. (2019, August). Drivers of Digital Payments: A Cross Country Study.

Chandradath joined the T&T IFC's family in May 2020 as the Vice President, Financial Markets

Development. He is responsible for driving innovation and growth in the area of

Financial Markets; a key focus for the Company as it continues to deliver on

its mandate of developing the Financial Services Sector.

"If there ever was a time for the adoption of technology that will drive T&T towards becoming a cashless society… it is now! We each have an important role in driving that change. I am very proud and excited to be part of the T&T IFC's team that will make this a reality."

Chandradath Maharaj

Continued on next page

CHANDRADATH MAHARAJ –Vice President, Financial Markets Development

Untapped BenefitsCan Be Derived fromFinTech Solutions By Michelle Salandy, PhD – Research O�cer, T&T IFC

The volume and types of digital payments are increasing worldwide. Financial Technology (FinTech) companies and the solutions they provide are increasingly accepted and supported by several advocates, as many individuals and governments now call for the increased use of digital or cashless payments. It is a revolutionary wave that is needed not only for financial sector development but for national development. The onboarding of FinTech solutions, the eradication of cash and the push for cashless economies are justified by the many benefits.

Continued on next page

A study by A.T. Kearney and VISA reveal that a

increase in digital payments per year for five consecutive years, reduces the informal economy by 10.8-12.9%.

The use of digital payments also fosters financial inclusion, and has provided access to financial services to an estimated 1.6 billion people, and increased the volume of loans extended to individuals and businesses by US$2.1 trillion, in respective territories.

(Manyika, Lund, Singer, White, and Berry 2016).

Chandradath is a Fellow of the Association of Chartered Certified Accountants (FCCA), and holds an Executive Masters (EMBA) from the Arthur Lok Jack Global School of Business. He brings over 12 years of senior leadership experience in a wide range of industries both locally and internationally, with a wealth of knowledge and experience in financial management, regulations and regulatory policy development.

Chandradath was previously a Director at the Trinidad & Tobago Securities Exchange Commission where he had oversight of the Disclosure, Registration & Corporate Finance Division. During his tenure, he would have led and contributed to the development of the securities market through various projects and initiatives, key among them, the automation of the registration and disclosure function.

THE T&T IFC WELCOMES

Continued from previous page

Digital transactions also improve and promote transparency and security by increasing the accountability and tracking of money transfers within the economy. This is linked to a reduction in the cases of fraud, money laundering, tax evasion, drug tra�cking and counterfeit notes. The Ministry of Social Development and Family Services in Trinidad and Tobago implemented the Direct Deposit system in 2017 to transfer social security payments to address the challenges of stolen cheques. In the case of India, the digital delivery of subsidies removed the incidence of leakages through “ghost” intermediaries and resulted in an estimated fiscal saving of US$2 billion (George and Subramanian 2015). Digital payment platforms have also been encouraged by Swedish banks to prevent robberies, whilst debit/credit cards and digital wallets are encrypted with passcodes or biometric authentication to safeguard against theft.

Macro-economic benefits are realised from the increased use of digital payments. Employment has increased because digital payments have encouraged new business formations such as FinTech companies and microfinance institutions. The increased access to formal credit and savings instruments also enables the financial system to capture more savings and, in turn, extend more credit which increases the level of aggregate investment. Moody’s extrapolation of the e�ect of card usage on consumption and GDP using the data from 70 countries, revealed that higher card usage contributed an additional US$296 billion to consumption between 2011 and 2015, or a 0.1% cumulative increase in global GDP, as well as an average increase of 2.6 million jobs (Zandi, Koropeckyj, Virendra and Matsiras 2016).

Digital payments are associated with reduced cost and increased savings. VISA’s study revealed that businesses would save 2.1 cents of every dollar if they accepted digital payments. Additionally, Automated Clearing House (ACH) transfers reduce the cost of printing and mailing paper cheques and indirectly reduce the cost of resources utilised by the government to replace lost or stolen cheques. Digital payments also reduce the cost of minting. The likelihood of additional charges for late payment of utility bills are also reduced with digital payment.

The COVID-19 pandemic delivered a disruptive shock to the global economy, and the economic impact of the pandemic was felt throughout all industries, including the Business Process Outsourcing and Shared Services (BPO/SS) Industry. With the realisation that investor outreach would need to change significantly, at least in the short to medium term, the T&T IFC, opted to host a Virtual Inward Mission from 18th to 22nd May 2020. The mission featured a prospective BPO investor headquartered in Australia that provides a wide range of services in the Business Process Management and Finance & Accounting BPO industries.

During the mission, the company’s Managing Director and Head of Talent and Compliance met and held virtual meetings with nine companies from the telecommunications, legal, banking, recruitment and supports services. These meetings helped the investor to get a better understanding of the local business environment and to assess Trinidad and Tobago’s feasibility as a potential base of operations for their company.

Investment Promotion in a Digital Era

Continued on next page

Digital payments are faster, more convenient and improves the timeline for data analysis. Digital payment facilities allow 24-hour access to funds and have reduced the need to be physically present at a bank, or to stand in a queue to withdraw cash from Automated Teller Machines (ATMs). Wages are now paid directly via the Automated Clearing House (ACH) platform and utility bills can be paid at the convenience of a single ‘app’ without any hassle. Many mobile wallets have allowed for payment authentication via fingerprint scan or a personal identification number (PIN) in the past, while MasterCard was first to introduce “selfie pay” technology, which uses facial recognition.

Digital payments also allow for the facilitation of purchases and payment during times of viral pandemics such as Ebola and COVID-19. Mobile Wallet use in Sierra Leone during Ebola increased timeliness of salary payment to Response Workers, improved patient care and strengthened the capacity to contain the disease (Bangura 2016). Many financial institutions and the World Health Organisation also guided customers to use digital payments during the COVID-19 pandemic. It was clearly supported to ensure social distancing while allowing individuals to access financial services without making in-branch visits or using cash.

The government, financial sector, citizens and merchants of Trinidad and Tobago can only attain these benefits if there is a transition to a broader financial space with increasingly innovative digital payment options. The T&T IFC continues to echo the call for the development of the local FinTech ecosystem to improve the ease of doing business in Trinidad and Tobago and to expand the country's potential.

References Alderman, L. (2018, November 21). Sweden's Push to Get Rid of Cash Has Some Saying, 'Not So Fast'.A.T. Kearney & VISA. (2018). Digital payments and the global informal economy. Bangura, A. (2016). Saving Money, Saving Lives: A Case Study on the Benefits of Digitizing Payments to Ebola Response Workers in Sierra Leone.George, S., & Subramanian, A. (2015, July 22). Transforming the Fight Against Poverty in India. Herwadkar, S., Verma R., & Bilantu, P. (2019, August). Drivers of Digital Payments: A Cross Country Study.

T&T IFC’S VIRTUAL INBOUND MISSION WITH PROSPECTIVE AUSTRALIAN INVESTOR

Two Telecommunications services providers had the opportunity to present their product portfolios. Recruitment and Support Services providers were able to provide the investor with in-depth knowledge of the Human Resource (HR) practices in Trinidad and Tobago. Some topics discussed were the administrative costs of operations locally, the structure of employee contracts and statutory requirements for local employees, including payroll and overtime. They also received sample contracts, and HR policies to guide their understanding of the requirements to comply with Trinidad and Tobago’s law; along with the pricing to provide payroll, secretarial, taxation and recruitment services.

The investor’s team also had the opportunity to interview 14 potential job candidates. The initial feedback from the interview was very positive as they were impressed with the quality of the applicants being interviewed.

To get firsthand feedback on the journey and the advantages of setting up operations in T&T, the team met with one of our existing investors. This meeting was very fruitful, and, in the end, the prospective investor was able to access and understand:

Their rationale for selection of Trinidad and Tobago as an investment destination,

How the company was able to navigate the legal requirements in order to start operations seamlessly in Trinidad, as well as their work-from-home business model,

The quality of the Client Services provided by the T&T IFC in assisting with the setup of operations in T&T,

The quality of the workforce in accounting and finance, and the unexpected benefit of competitively priced software development talent, and

Why Trinidad and Tobago as a destination is cheaper than India for their business model based on high workforce quality and productivity.

The investor also received information on business structures, employment, work permits, trade registration, tax registration and requirements to set up an operation in Trinidad and Tobago.

At the end of the mission, the prospective investor was extremely pleased with the depth of information they received from all the stakeholders. They stated that they were “impressed with the level of organisation undertaken by the T&T IFC in arranging the virtual mission,” and the willingness of the T&T IFC to rise above the challenges and provide an alternative solution as their visit to T&T could not be facilitated due to global travel restrictions. Given the feedback from the prospective investor, the T&T IFC is encouraged that once COVID-19 restrictions are lifted, a team will visit T&T to progress discussions in person.

By Michelle Salandy, PhD – Research O�cer, T&T IFC

The volume and types of digital payments are increasing worldwide. Financial Technology (FinTech) companies and the solutions they provide are increasingly accepted and supported by several advocates, as many individuals and governments now call for the increased use of digital or cashless payments. It is a revolutionary wave that is needed not only for financial sector development but for national development. The onboarding of FinTech solutions, the eradication of cash and the push for cashless economies are justified by the many benefits.

The COVID-19 pandemic delivered a disruptive shock to the global economy, and the economic impact of the pandemic was felt throughout all industries, including the Business Process Outsourcing and Shared Services (BPO/SS) Industry. With the realisation that investor outreach would need to change significantly, at least in the short to medium term, the T&T IFC, opted to host a Virtual Inward Mission from 18th to 22nd May 2020. The mission featured a prospective BPO investor headquartered in Australia that provides a wide range of services in the Business Process Management and Finance & Accounting BPO industries.

During the mission, the company’s Managing Director and Head of Talent and Compliance met and held virtual meetings with nine companies from the telecommunications, legal, banking, recruitment and supports services. These meetings helped the investor to get a better understanding of the local business environment and to assess Trinidad and Tobago’s feasibility as a potential base of operations for their company.

BPO DATA ANALYTICS &DATA SCIENCE PROGRAMME

Data Analytics has become an integral skill for professionals in the Financial Services sector worldwide, and with the pilot of a Data Analytics & Data Science programme, the T&T IFC, Incus and UWI-ROYTEC has given over 200 students the opportunity to invest in the critical training essential to their advancement in the local public and private sectors.

This programme which ran from May – June 2020 was aimed at upskilling local professionals and was specifically designed and customised for non-technical businesses in the Financial Services sector who recognise the strategic value of data in order to create more robust and e�ective strategies. This is a vital part of the T&T IFC’s Strategic Initiatives for Labour Pool development where its e�orts are focused on activities that will improve the attractiveness of Trinidad and Tobago to investors.

The Data Analytics programme which featured over 200 participants took place in May 2020 and culminated with a Use Case Scenario Competition held on Friday 29th May via a virtual Zoom session. The Use Case Scenario Competition put the cohort’s training into practice with high-level presentations delivered via an online webinar and using Tableau software. Finalists utilised real-world scenarios and channelled their newfound insights to identify trends and patterns in data to augment their decision making and enhance organisational performance.

With their findings, they showed how this data can have a significant impact on the top and/or bottom lines of their respective organisations. These

scenarios were not limited to improving e�ciency in the private sector but also illustrated how data can vastly improve transparency in Financial Services for the public sector that would redound to greater benefits for the entire country.

Participants expressed their high regard for the exercise which enabled them to interact visually with data in ways they had not previously been aware were possible, gaining valuable insights that could transform policies. Noting the ease of engaging with the data in more expedient and instantly relevant ways, many of the participants shared that they were better equipped to transfer their knowledge into real-life applications that could optimise operations across a multitude of industries. A presentation by the group “Keeping Up with the Ks”, led by Krystal George achieved top recognition from the judges. The group was applauded for its innovative use of data analysis to propose a transformative way in which the banking industry can more e�ciently target the needs of customers and create better value with their product o�erings.

The Data Science programme, which had a select group of participants, was held in June 2020, with participants having the opportunity to be part of a three-month mentorship programme ending in September. This mentorship programme will allow participants to work with professionals in this field and apply their knowledge to real-world scenarios.

Two Telecommunications services providers had the opportunity to present their product portfolios. Recruitment and Support Services providers were able to provide the investor with in-depth knowledge of the Human Resource (HR) practices in Trinidad and Tobago. Some topics discussed were the administrative costs of operations locally, the structure of employee contracts and statutory requirements for local employees, including payroll and overtime. They also received sample contracts, and HR policies to guide their understanding of the requirements to comply with Trinidad and Tobago’s law; along with the pricing to provide payroll, secretarial, taxation and recruitment services.

The investor’s team also had the opportunity to interview 14 potential job candidates. The initial feedback from the interview was very positive as they were impressed with the quality of the applicants being interviewed.

To get firsthand feedback on the journey and the advantages of setting up operations in T&T, the team met with one of our existing investors. This meeting was very fruitful, and, in the end, the prospective investor was able to access and understand:

1.2.

3.4.

5.

Their rationale for selection of Trinidad and Tobago as an investment destination,

How the company was able to navigate the legal requirements in order to start operations seamlessly in Trinidad, as well as their work-from-home business model,

The quality of the Client Services provided by the T&T IFC in assisting with the setup of operations in T&T,

The quality of the workforce in accounting and finance, and the unexpected benefit of competitively priced software development talent, and

Why Trinidad and Tobago as a destination is cheaper than India for their business model based on high workforce quality and productivity.

Continued from previous page

The investor also received information on business structures, employment, work permits, trade registration, tax registration and requirements to set up an operation in Trinidad and Tobago.

At the end of the mission, the prospective investor was extremely pleased with the depth of information they received from all the stakeholders. They stated that they were “impressed with the level of organisation undertaken by the T&T IFC in arranging the virtual mission,” and the willingness of the T&T IFC to rise above the challenges and provide an alternative solution as their visit to T&T could not be facilitated due to global travel restrictions. Given the feedback from the prospective investor, the T&T IFC is encouraged that once COVID-19 restrictions are lifted, a team will visit T&T to progress discussions in person.

Data Analytics has become an integral skill for professionals in the Financial Services sector worldwide, and with the pilot of a Data Analytics & Data Science programme, the T&T IFC, Incus and UWI-ROYTEC has given over 200 students the opportunity to invest in the critical training essential to their advancement in the local public and private sectors.

This programme which ran from May – June 2020 was aimed at upskilling local professionals and was specifically designed and customised for non-technical businesses in the Financial Services sector who recognise the strategic value of data in order to create more robust and e�ective strategies. This is a vital part of the T&T IFC’s Strategic Initiatives for Labour Pool development where its e�orts are focused on activities that will improve the attractiveness of Trinidad and Tobago to investors.

The Data Analytics programme which featured over 200 participants took place in May 2020 and culminated with a Use Case Scenario Competition held on Friday 29th May via a virtual Zoom session. The Use Case Scenario Competition put the cohort’s training into practice with high-level presentations delivered via an online webinar and using Tableau software. Finalists utilised real-world scenarios and channelled their newfound insights to identify trends and patterns in data to augment their decision making and enhance organisational performance.

With their findings, they showed how this data can have a significant impact on the top and/or bottom lines of their respective organisations. These

scenarios were not limited to improving e�ciency in the private sector but also illustrated how data can vastly improve transparency in Financial Services for the public sector that would redound to greater benefits for the entire country.

Participants expressed their high regard for the exercise which enabled them to interact visually with data in ways they had not previously been aware were possible, gaining valuable insights that could transform policies. Noting the ease of engaging with the data in more expedient and instantly relevant ways, many of the participants shared that they were better equipped to transfer their knowledge into real-life applications that could optimise operations across a multitude of industries. A presentation by the group “Keeping Up with the Ks”, led by Krystal George achieved top recognition from the judges. The group was applauded for its innovative use of data analysis to propose a transformative way in which the banking industry can more e�ciently target the needs of customers and create better value with their product o�erings.

The Data Science programme, which had a select group of participants, was held in June 2020, with participants having the opportunity to be part of a three-month mentorship programme ending in September. This mentorship programme will allow participants to work with professionals in this field and apply their knowledge to real-world scenarios.

FINTECH TT UPDATES

T&T IFC and the Interim Management Committee (IMC) of the FinTech Association of Trinidad & Tobago (FinTech TT) o�cially launched the association and its logo in February 2020. Since that time, the IMC has created several internal working groups that focus on developing the association’s internal structures while simultaneously contributing to issues in the external business environment by reaching out to stakeholders in the local and international ecosystem with whom FinTechTT can collaborate.

Currently, the Interim Structure of the IMC consists of the following working groups:• Association Development Working Group• Brand Management and Public Education Working Groups• Strategic Planning Working Group• Infrastructure Development Working Group• Regulatory Improvement Working Group

FinTech TT remains cognisant of its role as a major pillar of the ‘FinTech Roadmap’ for Trinidad and Tobago. The FinTech Roadmap is a strategic plan for the country to become a FinTech-enabled Financial Services Hub, the realisation of which will have a knock-on e�ect of developing and strengthening the local Financial Services Sector. The importance of financial technology integration and access to FinTech-related services became a major talking point during the stay-at-home measures and limited operating hours for businesses brought on by the COVID-19 pandemic. The need for accessible and a�ordable FinTech solutions is a critical tool in business productivity and continuity, ensuring that citizens have access to finances without the restrictions of location and time.

Bearing this in mind, the association continued to reach out to stakeholders in the local and international ecosystem with whom they can collaborate. In doing so FinTech TT was able to position itself as a thought leader in the local environment and had the opportunity to engage in several activities. These included:

• FinTech TT was incorporated and is awaiting registration as a Non-Profit Organisation (NPO)• Met with the Central Bank of Trinidad & Tobago (CBTT) to discuss the local ecosystem and regulatory environment• Submitted comments on the CBTT E-Money Policy• Submitted comments on the CBTT Guidelines for Non-Bank Non-Financial Institutions in Retail Payments• Submitted a Sandbox proposal to the CBTT for consideration and comments

Over the next few months, the T&T IFC and FinTech TT plan to host a ‘Recovery Hack-a-Thon’ and hold the Annual General Meeting of FinTech TT, where a Board of Directors will be elected. This Board will then take FinTech TT forward and continue to execute its mandate.

For further details on the association or to lodge your interest in joining, please visit: https://www.ttifc.co.tt/fintechtt