Cayman’s ‘smallest’ bank has big digital strategy

In 2022 Jamaica-based PROVEN Group bought Fidelity Bank Cayman. The entry of a newcomer was notable in a small domestic banking market that has just six Class A retail banks.

So why did PROVEN Group, a regional holding company with Caribbean interests in wealth management, real estate and private equity, decide to enter the Cayman market?

“Cayman’s retail banking market may be considered small and dominated by established players,” says PROVEN Bank Cayman CEO Stacy Belnavis, “however, that didn’t mean that customers were satisfied with the level of banking service offered.”

In addition to customer service, PROVEN saw other opportunities. One was with wealth management and investment services, where the bank hopes to encourage its clients to also look at the group’s other products.

Going big on digital banking

The other opportunity was online banking, where Cayman’s domestic digital offer still lags behind the best available in international markets.

“I’ve worked in markets with a fraction of Cayman’s GDP, yet their digital experience is seamless and customer-focused,” said Belnavis.

“For me, it’s about convenience – making banking so easy that you only come into the branch if you want to, not because you have to. Today’s customers, especially younger ones, expect to do everything from their phone and I believe Cayman deserves that same level of accessibility and innovation.”

So PROVEN is investing in a new online banking platform and running a test programme with customers in Cayman.

“For Cayman, I’m taking an intentional approach by inviting selected clients into a pilot group,” said Belnavis. “They will tell us what they want, rather than us assuming. Clients will be part of shaping the platform, ensuring it reflects their needs and expectations.”

Small but quick

Cayman’s other five retail banks – Butterfield Bank, Cayman National Bank, CIBC Caribbean, RBC Royal Bank and Scotiabank & Trust – all belong to larger regional banking groups. The PROVEN Group has a wealth management group in Jamaica – although it doesn’t hold a banking licence in that country – and a smaller, international-focused subsidiary in St. Lucia.

But the fact that Cayman is PROVEN’s main banking jurisdiction is an advantage, said Belnavis. “Unlike banks headquartered abroad, we are nimbler. Decisions don’t get lost in layers of bureaucracy – we sit as a committee, review and decide quickly. This combination of speed, personalised service and local decision-making sets us apart and ensures clients experience banking that works for them.”

Belnavis believes the smaller size is another advantage. “We are faster than other banks when it comes to approving loans and onboarding clients. If clients provide the required documentation, we can approve in days – not weeks – because responsiveness and efficiency are core to our approach.”

Of course, some customers may worry that smaller financial institutions are riskier, a fear that Belnavis is keen to dispel. “While there are six Class A banks in Cayman and we are likely the smallest by size, the Cayman Islands Monetary Authority (CIMA) has designated us as a ‘domestically systemically important deposit-taking institution’ in February 2025.

“We did not apply for this status; CIMA assessed us and informed us. That designation signals the regulator considers our role significant to the financial system and we take that responsibility seriously. It also affirms PROVEN’s role in Cayman’s financial ecosystem.”

Noting that PROVEN Bank is “fully self-funded”, Belnavis said the bank was profitable within six months of the acquisition.

Reacting to US interest rates

Yet PROVEN’s challenges are not just from other local banks. Cayman’s banking system is heavily influenced by the US – for example, variable mortgages issued by the islands’ banks are tied to the US prime rate. US interest rates are currently trending down, which could impact profits for banking operations in Cayman.

“The current US interest rate cycle impacts us primarily through margins and we manage that proactively with a long-term view,” said Belnavis. “We always aim to maintain healthy spreads, so we carefully monitor pricing and asset allocation. For example, we anticipated the recent 25-basis point cut and rebalanced our book ahead of time.”

Belnavis also notes that lower rates also mean cheaper access to capital. “Over time, lower rates can compress spreads, but more affordable funding on the liability side often offsets that. Yes, margin pressure is a reality for most banks, but our disciplined approach, rooted in global best practices for interest rate risk management, positions us to navigate these cycles effectively.”

It’s easy for a CEO to talk up their bank’s potential, but Belnavis is open about her target. She aims PROVEN to “be a $1 billion bank” by 2030 before eventually becoming “the leading Caribbean digital bank”.