Financial services generated CI$1.2 billion in Gross Domestic Product for the Cayman Islands in 2007, representing 55 per cent of the economy, a study commissioned here but conducted by a US company shows.
The Oxford Economics survey revealed the sector employed 12,603 people or 36 per cent of the workforce – 60 per cent of the sector’s jobs filled by Caymanians.
In addition, the analytics and research company found that financial services accounted for 40 per cent of government revenue in 2007. Indirect contributions would have inflated this figure.
The Cayman Islands bodies which commissioned this study include the Bankers, Company Managers Fund Administrators, Insurance Managers, Compliance, and Insurance associations; the societies of Trust and Estate Practitioners, and Professional Accountants as well as the Law Society.
‘It was inspiring to see all of these professional associations come together to commission this important study that will benefit the public, the government and the industry by providing reliable third-party data and analysis on our industry’s impact in Cayman,’ said Frazer Lindsay, president of the Cayman Islands Society of Professional Accountants.
‘Better decisions are made and more accurate opinions formed when people have good information available to them,’ he said. ‘Oxford Economics is a globally respected research firm known for the integrity of (its) work.
‘If there is one thing this report makes absolutely clear, it is that the health of Cayman’s economy is directly linked to the health of its financial services industry and we must be ever vigilant in protecting our place as a global financial centre in the face of growing competition and challenges.’
The report details other indirect benefits of the industry such as training, education and scholarships along with charitable contributions that all have an impact on the standard of living in Cayman, he noted.
‘It is fairly obvious that financial services companies are a significant part of the local economy in Cayman. But it has always been difficult for most people, even industry executives, to explain just how large the impact is and exactly what benefits the islands receive from hosting the financial industry. That sort of information has not been readily available, until now.’
Oxford Economics provides economic advice, forecasts and analytical tools to international institutions, governments and blue-chip companies. It provides independent and unbiased research.
The study to understand the complete economic contribution from financial services in Cayman is the first of its kind.
In 2006, a banking industry study was conducted but it did not take into account any of the other sectors of the financial services industry such as insurance, legal services, estates and trusts, fund administration, accounting and other areas.
The report has been presented by the associations to the Leader of Government Business Kurt Tibbetts, Financial Secretary Ken Jefferson and Alden McLaughlin, Minister of Education with responsibility for International Financial Services Policy.
‘Government welcomes this report which reinforces the importance of the financial services sector to the Cayman Island’s economy,’ said Mr. Tibbetts.
‘The report highlights the contribution the industry provides Caymanians in … employment, training and scholarships. The report data support those already published by the Economics and Statistics Office and, moving forward, this report will be used as a catalyst to further develop our relationship with industry.’
David Walker, president of the Cayman Islands Bankers Association, said: ‘Nine different associations contributed towards the production of this detailed and independent study, which demonstrates the strong desire for reliable data about our industry even from those who are working within it.
‘We all believe that the general public has an even greater interest in these results and has a real need to see an independent study like this in order to have a complete picture of how interwoven the industry has become with the islands’ economy and culture.’