By NEIL HARTNELL
Tribune Business Editor
Long Island's MP yesterday voiced fears his constituency will become "a banking desert" after Scotiabank unveiled plans to withdraw from four Family Islands with a series of branch closures.
Adrian Gibson told Tribune Business that the Canadian-owned bank's decision to close its "semi-operational" Buckley's site, and end its presence on Long Island, meant the island will no long have a physical branch following Royal Bank of Canada's (RBC) pull-out several years ago.
"I fear this will have a devastating impact on my people's access to financial services," he said, while nevertheless thanking Scotiabank for its "stellar service" to the island and long-standing presence as a key asset for the community.
However, noting the implications for Long Island's residents and private sector, Mr Gibson quickly added: "Given the withdrawal of the Royal Bank of Canada a few years ago, this will be felt even more because Long Island has essentially become a banking desert.
"Our island is comprised of largely middle aged to elderly people, so this will affect my constituents incredibly. You can imagine the elderly may not have access to online banking or may lack digital literacy."
Giving an insight into how RBC's pull-out impacted Long Island businesses, the MP added: "One businesswoman told me she has to catch a speed boat to Exuma every week after RBC closed to get funds for staff payroll and to deposit funds."
This, he acknowledged, presented both a safety and security risk, but highlighted the problems faced by Family Island communities as commercial banks rationalised their branch networks and exited unprofitable locations where their presence cannot be justified.
Scotiabank (Bahamas), in a statement yesterday unveiling the move, said it came in response to the current COVID-19 pandemic and was based on two key factors - a reduction in revenues and profits, and the increase in online transactions by customers.
It suggested the switch to digital banking, which it has increasingly been seeking to drive in The Bahamas, had reduced customer traffic at some branch locations by more than 50 percent. As a result, it Scotiabank (Bahamas) said it had decided to "consolidate" - meaning close - its operations on Abaco, Andros, Long Island, Paradise Island and Exuma into branches on New Providence.
The move, the bank added, will take place over the next four months and result in the transfer of all customer accounts to branches located on New Providence as it seeks to cut costs, and extract efficiencies and economies of scale, from pushing customers to mobile and online banking.
Roger Archer, Scotiabank (Bahamas) managing director, said: “While we have made the difficult decision to consolidate a number of our retail operations, these changes are necessary for our long-term viability and success as a business. We will make every effort during this process to minimise customer impact and preserve the employment of affected staff through redeployment, where possible”.
The bank did not respond to Tribune Business inquiries on how many staff will be impacted, and how many jobs may go, before press time last night. However, Scotiabank (Bahamas) said its decision was driven by "significant shifts in customer behaviour and transaction volumes over the past few years, which have accelerated since the onset of the COVID-19 pandemic".
It added: "Branch traffic in some locations has been reduced by as much as 50 percent as customers continue to utilise digital banking platforms." Scotiabank (Bahamas) Family Island withdrawal will open the way for digital providers and money transmission businesses, such as Kanoo, Omni and Sun Cash, to fill the gap.
However, Mr Gibson said poor Internet connectivity in parts of Long Island would make accessing digital financial services difficult for constituents. He also questioned the timing of Scotiabank's decision given that Long Island was being positioned for a post-COVID turnaround by infrastructure upgrades involving the airport and water systems.
The MP said he would again write to the minister of finance to see if there was a possibility that Bank of The Bahamas, in which the Government owns a combined 82 percent stake, could establish a presence on Long Island. And he also suggested that the commercial banks establish a shared services hub that met the needs of multiple islands.
"We desperately need financial inclusion as people are unable to access basic services," Mr Gibson added. K Peter Turnquest, deputy prime minister, in a statement said COVID-19 had "accelerated" the drive towards digital commerce "and these developments have caught up with us, unfortunately".
While the Government "regrets" Scotiabank's decision, especially the redundancies that will result, Mr Turnquest urged residents and businesses in the impacted islands to take advantage of the just-launched Bahamian digital dollar and other electronic means to meet their payment needs.
"We must double our efforts to further deepen and diversify our economy, projecting the future of work in The Bahamas and opportunities to move into different types of work, taking advantage of the technology and Fintech developments," he added."
Scotiabank said it will provide customer assistance for digital banking. It added that following the closures, the bank will still have nine branches across The Bahamas as well as over 70 automated banking machines - a network it plans to expand.