Digital banking can’t be ‘rammed down throats’


Gowon Bowe


Tribune Business Editor


A senior banker yesterday said the industry must adopt the “Mary Poppins with medicine” approach in encouraging more Bahamians and businesses to switch to digital transactions.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business that Bahamian commercial banks cannot afford to “ram online banking down clients’ throats” and, instead, should adopt the fictional film character’s motto that “a spoonful of sugar helps the medicine go down” via detailed explanations/demonstrations of how this will benefit their lives and companies.

Arguing that “The Bahamas has to catch up with the times”, he added that those railing against the shrinkage of commercial bank branch networks, and efforts to reduce cash and cheque circulation, were “a little ignorant” of what is happening elsewhere where those payment mechanisms are increasingly becoming obsolete.

Mr Bowe said Grand Bahama, out of all Fidelity Bank (Bahamas) locations, was leading the way on card, digital and online banking, which he attributed to the multiple hurricanes that have hit the island in recent years. This, he suggested, had forced Grand Bahamians to rely more on electronic payments and transactions when physical branch locations were closed.

“It’s very interesting that Grand Bahama, which has been battered so many times over the years, they are the branch that sees the greatest card activity,” the Fidelity Bank (Bahamas) chief told this newspaper. “People in Grand Bahama are avoiding the branch, and are using debit and credit cards, using the ATM and using online.

“It appears our brothers and sisters in Grand Bahama have adapted more readily to the online world. Grand Bahama leads in cards issued and spending on cards, less cash and less activity in the branch. In recent years, a high number of businesses have demonstrated they are willing to take on merchant services.

“Grand Bahama may turn out to be the pilot and lighthouse for the rest of The Bahamas in getting to a more digital environment.” Mr Bowe then suggested that much of the criticism, and concern, over the reduction in bank branch networks and efforts to pivot away from reliance on cash and cheques was misplaced.

“I’ve seen a lot of criticism about the reduction in bank footprints and the move to reduce the amount of cash and cheques circulating in the economy,” he told Tribune Business. “That demonstrates a bit of ignorance on the part of people who have not travelled extensively in Europe and parts of Asia, where cash and cheques are almost obsolete instruments.

“The move to digital just means doing business easier. I think The Bahamas has to catch up with the times. It’s not about reducing the quality of service; it’s about how we make service more value-added and standing on the teller line counting bills is not value-added.

“To expand business lines into small business development and venture capital, you improve your efficiency on basic services and client services elsewhere with more value-added services.”

Mr Bowe, though, reiterated that patience and education are required by the Bahamian commercial banking sector to encourage a greater client take-up of online and digital banking services.

“It requires collaboration with the customer,” he told this newspaper. “We shouldn’t ram it down their throats. That’s not then approach we should take. It’s like Mary Poppins with the medicine; make it taste sweet. A spoonful of sugar helps the medicine go down.”

The number of commercial bank branches in The Bahamas has declined by almost 30 percent over the past seven years, the Central Bank’s governor revealed last October.

Data unveiled by John Rolle as part of his Abaco Business Outlook conference presentation showed the scale of the commercial banking industry’s retreat from physical presence operations, with branch numbers declining from 86 in 2014 (and 88 in 2008) to just 61 presently - a reduction of some 25 locations.

The decline was more pronounced in Grand Bahama and the Family Islands, where there was an-almost 40 percent fall-off in bank branch locations from 38 in 2014 to 23 at the current time. As for New Providence, bank locations dropped by just over 20 percent or ten over the same period to reach 38.

Mr Rolle declined to go into details on the reasons for the branch network shrinkage, and said he and the Central Bank focused on eliminating the “digital divide” or “uneven access” that Bahamians enjoy to digital financial services and products.

He noted that, parallel with the reduction in physical branch locations, the number of automated banking machine (ABM) sites had risen by 91 percent in just over a decade.

And Charles Littrell, the Central Bank’s inspector of banks and trust companies, told the Bahamas Institute of Chartered Accountants (BICA) in November 2021 that this nation’s banking fees reflect the reluctance of persons to switch to digital banking.

“Bank fees are a great thing for politicians to whinge about,” he said. “Most banks would be happy not to charge those fees.......Our banking habits impose costs on the banks that are reflected back in their fees..... Probably 80 percent of the fees generated are [the result of] the choice of people in how they do business. I don’t have a lot of sympathy for that.”

Asserting that a significant portion of bank fees were designed to cover costs associated with in-person banking at branches, Mr Littrell added: “We’re in the middle of a pandemic. Do your banking online, do your banking on a mobile phone, look at remote payment systems and things like that.......

“If people are too lazy to switch, then it’s their own damn fault. Don’t come complaining to us about fees when you could have switched.”


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