Kristen Gyles | Is naming and shaming enough?

Maybe if we were to do some checks, we would end up concluding that Jamaicans visit the automated banking machines (ABMs) just as often as they buy phone credit or pick up groceries in the supermarket. Cash withdrawals are now a staple element of the Jamaican lifestyle. Some still need the feeling of paper notes in their hands to convince them their money actually exists, and others have had their trust in online payment systems almost entirely erased on account of the many fraud scandals that have surfaced in the recent past.

To add insult to injury, Jamaicans are growing tired of hearing that the “card machine not working” when they opt to use debit or credit cards to make purchases.

With that said, when ABMs are out of service for extended periods or seem to be without cash almost as often as they are with cash, depositors, who keep the banking business alive, are left to brainstorm alternative ways of getting their money.

Last week, the Bank of Jamaica published its minimum service-level standards in relation to ABMs deployed by banks and other deposit-taking institutions (DTIs), and it gave us a glimpse into what a well-functioning, customer-oriented banking sector could look like. All DTIs have nine months within which to make the necessary adjustments to meet the requirements of the published standards.

NOTABLE STANDARDS

Some of the most notable standards surround the availability of cash. For one, at least 90 per cent of ABMs deployed by any given bank or other DTI should be operational with 95 per cent uptime, or more. The ABMs should also be restocked as soon as the amount of cash in the ABM runs down to a certain minimum level. That way, it is hoped, ABMs will be less likely to run out of cash. The standards also stipulate that ABMs in certain town areas should not be without cash for more than one hour, while other ABMs should not be without cash for more than three hours.

Besides the issue of cash availability, other key highlights within the standards include the requirement for DTIs to seek permission (or more accurately, seek non-objection) from the regulator prior to increasing ABM fees and to give at least 45 days’ notice to the public where ABM fees will be increased. Additionally, before an ABM is removed, the DTI must give two months’ notice of its removal to the regulator and provide justification for its removal, as well as a plan of action outlining alternative cash withdrawal options being made available to customers.

Without a doubt, regulatory input on the conduct of banks and other DTIs is quite like a breath of fresh air to the public, which has been protesting the unreliability of ABMs, unconscionable ABM fees, and other issues affecting ABM users.

Notwithstanding, it is left to be seen exactly how much of a difference the standards will make when banks stand to lose nothing where they are non-compliant. The concluding paragraph of the standards starts like this:

“No monetary sanctions will be applied as a result of breaches of these guidelines. Notwithstanding, non-adherence may give rise to supervisory concerns … with its attendant supervisory consequences.”

What supervisory consequences?

Having listened keenly for the answer since the publication of the standards, it is now apparent that any penalties available for use by the regulator, under the existing legislation, will hardly leave any bank executive trembling or biting their nails.

MONTHLY REPORTS

Apparently, the regulator intends to publish a monthly report on the performance of the ABMs deployed by the respective DTIs. While not explicitly stated, it seems the intention is to ‘name and shame’ DTIs into improving their service standards.

Just in case anyone thought otherwise, the average Jamaican will not be reading these reports. And the banks know this. But even if every month the reports were to become the hot topic on every corner, what would be the result? What would change?

If the expectation is that DTIs will feel enough disappointment upon reading a bad review from the regulator to actually spend money to deliver better service to consumers, we might just have fooled ourselves. Where there are no sanctions for bad behaviour, the bad behaviour will continue.

Further, the name-and-shame approach only works on people and entities who feel shame. Irate bank customers have taken to social media to name and shame their respective banks too many times to count, and it has made no material difference to the delivery of services. Why?

Well, if bad behaviour is commonplace, then engaging in it and being called out for engaging in it will bring no shame. Rather, it might just evoke warm, fuzzy feelings of belonging.

At the end of 2023, out of a total of 11 DTIs, the five largest DTIs held 81.7 per cent market share. At that time, there were just over 800 ABMs, roughly 600 of which were accounted for by the two largest banks. The big players in the banking sector are so far ahead of the market that, frankly, there is no incentive for them to upgrade anything but the size of their coffers.

And unfortunately, where smaller DTIs are compliant with the standards, a monthly report giving them a ‘big up’ will be of little value in achieving the overarching profit-making objective.

It is unfortunate that the Jamaican public finds itself at the mercy of the banking sector in this way. Banks provide Jamaicans with an invaluable service, but without depositors, there would be no banking sector. Hopefully, the legislators see it that way. If they do, they will heed the many calls for change – not eventually, but urgently.

Kristen Gyles is a free-thinking public affairs opinionator. Send feedback to kristengyles@gmail.com.