“None of us have crossed until all of us have crossed, and some of us will have to be carried,” said Lisa Violet, CEO of the Virgin Islands Deposit Insurance Corporation (VIDIC), underscoring the importance of collaboration in the BVI's efforts to safeguard its financial future. Violet's words set the tone for a thought-provoking discussion at the recent BVI Finance Breakfast Forum, moderated by Elise Donovan, CEO of BVI Finance. The forum provided a deep dive into the work of the VIDIC, its role in maintaining deposit insurance, risk monitoring, and financial stability, as well as the challenges, risks, and opportunities facing the BVI’s financial sector.
The Virgin Islands Deposit Insurance Corporation (VIDIC) Act passed in 2016 and was amended in 2023, while VIDIC was officially established earlier this year. Membership in VIDIC is mandatory for all financial institutions licensed under the Banks and Trust Companies Act, 1990, that are authorized to accept deposits. As of 2024, VIDIC's member institutions include seven banks: Banco Popular Puerto Rico, Bank of Asia (BVI) Limited, CIBC, FirstBank Puerto Rico, National Bank of the Virgin Islands, Republic Bank (BVI) Limited, and VP Bank (BVI) Ltd.
Violet verified that VIDIC is a statutory body, not a bank or insurance company. It does not cover financing or money services businesses, nor does it insure investment products. Governed by a Board of Directors and operating under the Ministry of Finance, VIDIC adheres to global standards set by the International Association of Deposit Insurers. The VIDIC operations were officially launched in June 2024 following the appointment of Violet as its inaugural CEO.
Deposit Insurance Coverage: The Virgin Islands Deposit Insurance Corporation (VIDIC) provides deposit insurance coverage of up to $100,000 USD per depositor, per institution. With seven licensed banks in the territory, depositors could potentially secure up to $700,000 USD in total coverage across multiple institutions. In the event of a bank failure, insured deposits are guaranteed to be accessible within seven days, in line with international standards. Lisa Violet highlighted that the VIDIC is already exploring ways to shorten this timeframe further, reinforcing its commitment to prompt depositor protection. Beyond insurance, the VIDIC also facilitates an orderly resolution process, which may involve receivership, liquidation, or a transition of the business, ensuring stability and minimizing disruption for depositors.
A Commitment to Stability and Growth
As the entity responsible for ensuring the protection of depositors and the stability of the financial system in the BVI, VIDIC plays a pivotal role in the territory's economic resilience. In her remarks, Violet reinforced that the corporation’s mission is centered on creating a stable environment where both local businesses and international investors can thrive.
Addressing Key Issues: Escrow Accounts, Correspondent Banking, and Transparency
Correspondent Banking: Violet assured attendees that VIDIC is collaborating regulators and stakeholders to create an environment that mitigates risks, supporting banks as they pursue solutions like consortiums and FinTech partnerships.
Technology and Innovation: Lisa Violet emphasized the importance of leveraging technology and innovation to address some challenges. A key strategy involves exploring banking consortiums and networks that enable shared risk and compliance oversight while broadening access to global banking systems. These consortiums and regional platforms, often digital-first and catering to medium and smaller enterprises, bring contemporary approaches to cross-border financial services. Violet highlighted how such players have stepped in where larger global banks have exited, filling critical gaps with tailored solutions for smaller markets.
Additionally, Violet stressed the potential of FinTech platforms and emerging technologies like blockchain to revolutionize cross-border transactions. Global platforms which focus on financial inclusion and serve emerging markets, offer faster, more transparent, and efficient financial services. These innovations reduce reliance on traditional correspondent banks and provide businesses with opportunities to evaluate and partner with solutions that best address their needs.
Overcoming Obstacles and Seizing Opportunities
“None of us will succeed unless we all succeed,” Violet reiterated. “The BVI needs a strong, collaborative effort from all sectors—government, regulators, businesses, and the international community—to ensure that we continue to thrive and meet global expectations.”
Violet pointed to the growing demand for alternative financial solutions, especially from clients in emerging markets, as an opportunity for the BVI to position itself as a leader in innovative financial services.
“By working together and embracing technological solutions, we can leapfrog traditional systems and create a more efficient and secure financial environment for businesses and individuals alike” Violet said.
Strengthening Compliance and Regional Collaboration
Violet emphasized the necessity of strengthening compliance frameworks and fostering regional collaboration. This involves enhancing Anti-Money Laundering and Counter-Terrorism Financing (AML/TF) measures through investments in compliance technology, such as RegTech solutions, and working closely with specialized compliance consulting firms. By demonstrating a low-risk profile and aligning with global standards and leading practices, the BVI will continue to position itself as a reliable and secure financial hub.
Violet also underscored the value of regional and multilateral partnerships. Collaborating with organizations such as the OECS, CARICOM, and ECCU not only strengthens the BVI’s regional standing but also provides access to technical assistance and funding from development institutions. Exploring intermediary services via regional banks can further enhance the jurisdiction’s resilience in cross-border banking. These efforts, she noted, are essential for fostering stability and ensuring the BVI’s financial systems remain robust and globally competitive.
Looking to the Future: A Strategic Path Forward
The VIDIC CEO concluded by emphasizing that the road ahead will require strategic planning, commitment, and the courage to make bold decisions. She highlighted the importance of focusing on both immediate and long-term solutions, particularly in areas such as correspondent banking and deposit insurance, which will require sustained efforts over the next 12 to 18 months.
“We are committed to global standards and excellence,” Violet said. “The BVI deserves the best, and we will continue to work toward a resilient, sustainable economy that serves the needs of all stakeholders.”
As the discussion wrapped up, Donovan echoed Violet’s call for action, stressing that the BVI’s financial system must evolve to meet the challenges and opportunities of the future.
To view the forum recording, click here.
For more information about the Virgin Islands Deposit Insurance Corporation and its efforts to protect depositors and ensure the stability of the BVI’s financial system, please click here.
For further information please contact:
Shamahl A. Smith
Communications and Research Officer
ssmith@bvifinance.vg |Tel: 284-852-1957