The Government is committed to the modernisation and diversification of the banking sector in Bermuda, including the expansion of banking services that support key initiatives within the island’s Economic Recovery Plan.

David Burt, the Premier and Minister of Finance, said in the Budget Statement on Friday: “It is understood that some of the existing local banks may be unable to service some Economic Recovery Plan initiatives without threatening existing correspondent banking relationships.”

He added: “The aim is to develop and implement a revised banking model for our country that reflects its uniqueness and is consistent with our reputation as a quality international financial centre.”

Mr Burt said a report prepared by the Bermuda Monetary Authority envisions that the island’s banking sector will include:

• Domestic/ (full-service banks) banks, which would be required to offer services that meet the full range of domestic and retail customers’ needs

• Narrow-purpose banks, which would be permitted to service sectors that are currently associated with higher reputational risk, such as gaming

• Specialised international banks, which would be permitted to focus solely on providing global solutions internationally, including to underserved areas

• Credit unions providing services under the Credit Unions Act

Mr Burt said: “The Government is fully supportive of the introduction of these initiatives; and while incumbent banks have the competitive advantage of being more familiar with regulatory requirements, it is accepted that different innovations are required to enhance the banking experience in Bermuda.”

He said the Ministry of Finance and BMA are working on a range of related banking sector initiatives.

Work to further strengthen transparency and conduct-related obligations are at advanced stages of the policy development process, Mr Burt said, with rules due to be tabled this year.

He added: “Additionally, the Government will support the Bermuda Monetary Authority in advancing open banking standards in Bermuda to provide better services to local consumers while enabling new digital banking services to be offered.”

Mr Burt said the Government’s initiative to create a Bermuda digital bank, in which Bermudians will have an ownership stake, “is progressing”.

He added: “The Bermuda digital bank is critical as it is not only in keeping with the Government’s pledge of building a nation of owners but also aims to diversify the banking services and products available on the island.”

Mr Burt said the Ministry of Finance and BMA are working “to determine the best path forward to execute this project in the near term while ensuring the bank meets the standards for being licensed in Bermuda”.