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Businesses wait over two months for bank account

The Central Bank of the Bahamas.

The Central Bank of the Bahamas.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BAHAMIAN businesses face an average wait of more than two months to open a bank account with almost 80 percent asserting that the process “took longer than expected”.

The Central Bank, unveiling the results of a survey of 402 companies and entrepreneurs, said that based on the responses just one-third of business bank accounts were opened within two weeks or less of the application being made.

It added that just 11 percent of accounts were opened on the same day with another 12 percent occurring within one week, meaning that fewer than one in four applications were processed within seven days. Around 40 percent “took more than one month in absolute time” to be opened, with 33 percent of applications taking longer than one month but less than six to be approved.

Around 6 percent of all corporate bank account opening applications were still actively awaiting decisions after more than six months”, while about 3 percent were terminated after the applicants withdrew their requests.

“Indications are that averaging over all of the time intervals used for responses, taking the midpoint of each time band as the average for the range, the average wait time to get an account opened was over two months,” the Central Bank’s survey report said.

“In particular, only one- third of accounts were opened within two weeks or less. Within this subset, only about 11 percent of account openings were concluded in the same day, while almost the same fraction opened within one week. On the other hand, about 40 percent of accounts, in absolute time, took more than one month to be opened.

“There was a higher level of dissatisfaction than satisfaction with the process seemingly related to the average time it took to complete the process and influenced by respondents’ views of the importance of the due diligence documentation requested from the banks.”

As for the private sec- tor’s assessment of the customer service provided by the Bahamian commercial banking industry, the Central Bank survey findings said just 10 percent reported being “very satisfied” with the time taken to open the account, the over-all service and the bank’s responsiveness. This rose to 20 percent for the account opening time when those who are “satisfied” were included.

“The survey also indicated that roughly four-fifths of respondents either agreed or strongly agreed that it took longer than expected to successfully open an account,” the Central Bank said.

“A greater fraction of respondents expressed dissatisfaction, compared to some level of satisfaction in the identified aspects of the account opening process, whereas between 15 percent to 25 percent of survey participants had a neutral perception of the process.

“In particular, just over one-fourth of individuals felt some degree of satisfaction with the length of time it took to open accounts, as compared to almost two- thirds who were dissatisfied to some degree. In addition, almost one-third of respondents were satisfied with the level of responsiveness shown by the banks, as compared to about 45 percent who were not satisfied,” the industry regulator added.

“In regards to the overall customer service experience, 31 percent were satisfied or somewhat satisfied with the overall service experience, compared to 45 percent who expressed some degree of dissatisfaction.”

The Central Bank said the results had “highlighted some key areas that can be improved in the service levels offered by banks and the ease of opening business accounts”, adding that its push for a risk-based approach when it came to commercial banks conducting Know Your Customer (KYC) due diligence on new clients “should help ease the burden”.

“The Central Bank will therefore target improved outcomes in this space, including streamlined customer due diligence for micro and small businesses that are more closely aligned with the applicable guidance for establishing relationships with individuals,” the regulator added.

“Outside of the improved application of risk-based customer due diligence, the Central Bank will also pursue and promote the implementation of more effective systems for front- line staff within financial institutions. This is to ensure that anti-money laundering and counter terror financing standards are, in practice, consistently deployed by front-line staff as intended in regulatory guidance and the internal policies and procedures of financial institutions.

“The Central Bank also proposes to require that financial institutions develop systems to monitor and actively target, through training and other interventions, outcomes to favourably impact the account opening process.”

The Central Bank added that there were “mixed results” regarding the private sector’s awareness of KYC documents that were requested by commercial banks as opposed to the justification for needing them. “Approximately two-thirds of survey participants were in some level of agreement that the banks were clear on what documentation was needed to complete the account opening process,” it said.

“However, only about 30 percent of firms felt that the banks explained why documentation was required. Further, an almost equal proportion agreed on some level that they were able to provide all of the required documents at once versus almost 30 percent that were not able to submit all of the documents at once.”

Comments

ScubaSteve 2 months, 2 weeks ago

TWO MONTHS?!?!?!?!?!?? What in the holy hell is going on? If I walk in to a bank and have $1,000 in cash to open a business bank account -- it should only take them 15-20 minutes to open the account. This is absolutely ridiculous and appalling.

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Abacoblu 2 months, 2 weeks ago

And if you are in Abaco, you have to go to Nassau to make the application

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ExposedU2C 2 months, 2 weeks ago

In almost every state in the U.S. a business can open a bank account online in mere minutes by simply uploading to the bank copies of the required signed forms.

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SP 2 months, 2 weeks ago

Lol.......Absolute stupidity continues to reign in the Bahamas! What a crock of nonsense. The article doesn't expose WHY banks are hog tied to ridiculous rules that forbid them to make money!

The anti-money laundering and counter terror financing bullshyt excuses don't hold a thimble of water as I am not aware of ANY BAHAMIAN being caught, tried, or convicted of either supposed offense.

Anyone can open a bank account online in the US in a matter of minutes!

Western colonial masters are to blame for this stupidity. The colonizers have made it all but impossible for the Bahamas to function as a financial center and our politicians are too busy kissing ass to care about the Bahamas!

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juju 2 months, 2 weeks ago

NINE MONTHS to open a small business account at RBC for an Abaco account. Could not be done in Abaco. Had to be done in Nassau. What a joke.

It took FOUR physical visits to JFK Drive Commercial Banking in Nassau, and over 100 e mails…( they don’t talk ), and NO ONE cared for the urgency to start our business. Shame on you RBC. The lack of service, pride and integrity starts at the top.Where IS the Bahamian RBC leadership?It is truly terrible.

I’m sorry to say, but working with RBC Trinidad is definitely the way to go.

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bcitizen 2 months, 2 weeks ago

I can walk into a US bank and have an account open in less than 30 min. In my own country I have to bring a suitcase full of documents and letters and wait days or weeks to get an account open. A business account getting opened is almost a joke only a masochist could enjoy opening a business account in The Bahamas.

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