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Banks under pressure to shift to electronic clearance

| 11/05/2016 | 4 Comments

e-commerce shopping cart(CNS Business): The government is engaged in talks with local banks to introduce electronic transfers and clearing systems in the first quarter of next year, Financial Services Minister Wayne Panton has stated. He told legislators last week that the six local clearing banks have entered into an MOU with a Barbados-based firm to create a platform to modernise the banking system, speed up the clearance of cheques and allow people to make instant electronic payments from one bank to another.

The minister said government had been engaged in talks with the banks for many years on the issue, as he responded to a private member’s motion in the Legislative Assembly brought by the independent opposition member, Alva Suckoo. Panton said things had been slow to move forward as a result of various issues, such as technology challenges because the Cayman dollar is not a tradeable currency. However, he stressed the need for the modernisation and the adoption of technology-based platforms in local banking.

“We want to do what can to help business, which is why we have been in discussions with the banks,” he said, adding that he expected banks to be able to have the systems up and running early next year. “We are looking forward to it. It’s an area and an issue that I will remain focused on. It is needed now.”

Panton said government would consider the motion brought by Suckoo but he did not feel it was appropriate yet for government to mandate that banks introduce electronic clearance, as called for in the motion. He explained that typically banks and trust law regulates rather than instructs what services banks offer.

“But we can,” he said. “If the banks take an unreasonable position, we will do it.”

During the presentation of the motion, Suckoo said government lagged behind many countries when it comes to electronic banking services, which he believed was stifling the development of e-commerce in Cayman, and argued for quicker clearance as a means of helping small businesses with cash flow. He queried who was benefitting from money in Cayman that “floated” for several days between being taken from one account and being accessible in the account it was sent to, and suggested that banks were getting interest free loans from the customers that could least afford it.

Suckoo railed against Cayman’s delay in joining the e-commerce revolution, which he blamed on the high street banks, pointing out that the jurisdiction is one of leading financial centres in world and should be paving the way rather than lagging behind.

He explained how local businesses that are conducting transactions online are forced to piggyback on solutions not based in Cayman, which means other countries are benefiting from the fees and business generated here and the costs to local companies are increased. Suckoo urged government to press the banks to make the changes now.

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Category: ICT, Local Business, Technology

Comments (4)

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  1. Anonymous says:

    At last…. the antiquated banks needs an online challenger as the general level of service here in Cayman is appalling. Well done Wayne and Alva

  2. Anonymous says:

    Fixed rate mortgages do exist. Just not with a long term fixture. Just remember that a fixed rate can cut both ways.

  3. "Anonymous" says:

    E-commerce well needed, it’s about time! well done Suckoo and Panton. This move would also help decrease the risk of large quantities of cash from bank to bank on a daily/monthly basis. Next step is to work on shifting mortgage rates from variable to fixed rates for residents living and working in Cayman.

    • Anonymous says:

      The only way to get long term fixed rates is for the government to guarantee the loan as in the US, not a good deal for taxpayers!!!

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