Burt: Government seeking fintech banks
David Burt says the Bermuda Government is in talks with overseas institutions on providing banking services to financial technology start-ups.
Speaking after taking part in a blockchain conference yesterday morning, Mr Burt lamented local banks' reluctance to get involved with an economic growth opportunity for the island.
He added that jobs would come in the sector with time and drew parallels with the development of the island's international re/insurance industry.
Local banks have been reluctant to service fintech start-ups, regarding them as risky clients, creating problems for the budding sector.
“I would hope that the local banks will take a more proactive approach, but we are going to advance this initiative with them or without them,” Mr Burt told The Royal Gazette.
In July, the Government enacted a new law to create a restricted banking licence to enable the fledgeling fintech sector to access services.
“There are companies that are doing business in Bermuda that have been able to arrange their banking services in such a way that they'll be able to start up operations,” Mr Burt said.
“But we in the Ministry of Finance are working to make sure those services can be offered more broadly. So we are in discussions with a number of overseas banks, because it's the key input of the component.
“We have to all work together if we want this to succeed. The Government is going to do what's best for the total economy and if that means we're going to have to recruit partners to partner with us to make sure this industry can thrive, because our local banks do not want to serve them, then that's what we'll do.”
Some have questioned whether the Government's fintech drive, which has included the creation of a regulatory framework for digital-assets business, will bring meaningful numbers of jobs.
Mr Burt said he would refer them to Brian O'Hara, the former XL Group chief executive officer, who is on the board of insurtech firm, Envelop Risk.
“In New York at the Bermuda Executive Forum in May, Mr O'Hara spoke about how when he was pioneering Bermuda Form insurance, the same criticisms that are levelled at blockchain and fintech now were levelled at insurance then — and we know how that turned out,” Mr Burt said.
“It is undeniable that the tokenisation of assets will be the future direction of the world and if Bermuda's going to be a serious player in financial services and insurance, going forward, then we want to make sure we are attuned to trends in the industry.
“So from that aspect, I would say, clearly the jobs will come — whether it's the $6.5 million investment [in DrumG by ConsenSys] that was announced earlier today, or other investments announced previously or other companies setting up.”
Some people in Bermuda would always be dubious about a Progressive Labour Party government's ability to manage the economy, he said, but his administration's vision was clear.
“We understand the future we're trying to build,” he said. “We recognise we were elected to diversify this economy and make this economy more fair.
“For people to have short-term views about jobs, from industries that were created from the ground up, they should recognise and understand that this is going to take time.
“As opposed to making those criticisms, I would say that the better place to be is ‘how can we assist and what can we do to make sure the country is welcoming for future jobs and growth?'”
Mr Burt was heartened by the turnout at yesterday's free-to-enter conference at the Hamilton Princess at which he spoke onstage with ConsenSys founder and Ethereum cofounder, Joseph Lubin.
Some of those present were schoolchildren and it was evident that the audience was much broader than a financial-services crowd.
“Not only is the international business and finance sector interested, but also there are students, people who may be looking for career changes, those who are unemployed and underemployed are looking for opportunities in this space,” Mr Burt said.
“The Government is keen to make sure that we deliver on the promise of ensuring that Bermudians play a role in the digital-asset space.
“All you need is a laptop and an internet connection to create the next billion-dollar company and there's no reason why some of the high-school students there cannot be the creators of the future.
“When you see a wide cross-section, that means people are willing to learn
“I am certain that people's understanding of what blockchain means is far more enhanced now, given the excellent presentations that were given this morning.”