KINGSTON. Jamaica — Brian Wynter, governor of the Bank of Jamaica, says that the sooner Caribbean governments are able to put in place national identifications systems (NDS) based on biometric data, the more persuasive they will be in their fight to retain the services of correspondent banks.

In a recent address to the Inter-American Development Bank-sponsored conference on ‘Finance, Fintech and the Future of Banking in the Caribbean Basin’ held in Washington DC, one solution, he said, is to build capacity in know your customer (KYC) utilities and the development of national identification systems, and then to implement a framework to support reliance on them

Such systems, he noted, would provide standardised identification of natural persons and a centralised database from which KYC information can be retrieved and shared.

“These tools have significant potential in the near to medium term if they can be implemented with common standards across the Caribbean region,” Wynter stated.

Wynter noted that changes in correspondent banking relationships significantly impacted the ability of local banks to service relationships, with local foreign exchange clients reversing progress in financial inclusion.

In Jamaica, he said, cash-intensive businesses such as supermarkets are being affected by the new demand of correspondent banks, in addition to cambios and remittance companies.

The solution to this problem, he said, “goes beyond simply upgrading the regulatory and supervisory framework in affected countries or correspondent banks changing their risk assessments”.

Wynter noted that Jamaica has already embarked on preparing the way for such a solution through the development of a national identification system (NIDS) which, if “properly executed, can provide a unique personal identifier for every Jamaican utilising appropriate biometric information”.

He said this system could serve as the cornerstone for a technology-driven approach to address international compliance requirements.

Funding for the project, he noted, has been provided through the IDB with grant funding of US$670,000, which helped to fund the first phase of this project.

Other Caribbean states, he suggested, will need similar help.

“The responsibilities and the associated costs of the development and implementation of such KYC and national identification system utilities cannot be borne solely by small developing states. But, if not addressed, it could lead to a dynamic that undermines one of our flagship development goals of broadening financial inclusion.”

“We therefore need to hasten the development of innovative partnerships between multilateral financial institutions, governing bodies for AML/CFT (anti-money laundering/counter financing of terrorism) and the developers of these technologies to undertake projects to develop such systems for low-cost introduction into jurisdictions such as ours in the Caribbean,” the BOJ Governor said.

AVIA COLLINDER