Jamaican banks and customer dissatisfaction

Despite recent data from JETS Limited and the central bank indicating high levels of customer satisfaction with Jamaica's automated banking machines (ABMs), anecdotal evidence suggests a strained relationship between banks and customers. The director of the National Integrity Action (NIA), Danielle Archer, endorses the call by opposition parliamentarian Fitz Jackson for hearings to establish minimum service standards for ABMs. Complaints on social media highlight issues with ABM functionality, prompting the NIA to emphasise the need for comprehensive minimum service standards for financial institutions. The CEO of JETS Limited notes a 95% satisfaction rate but acknowledges challenges during peak usage times. Jackson's proposal for minimum service standards was defeated in 2018, and he seeks renewed attention to the issue in Parliament.

Bank services issue won’t die

Jamaica Gleaner/31 Dec 2023

THIS NEWSPAPER isn’t inclined to question scientifically gathered data that have been subject to rigorous analysis, as we expect those recently issued by the JETS Limited and the central bank, suggesting high levels of consumer satisfaction with the functioning of Jamaica’s automated banking machines (ABMs) would have been.

But the industry’s data notwithstanding, as we observed earlier this month the strong anecdotal evidence indicates that the relationship between Jamaica’s banks and their customers “appears broken in many parts” and is in need of a fix. This is an old and recurring theme. Which is why we endorse the call by the opposition parliamentarian, Fitz Jackson – a long-standing campaigner for banking services reform – for the House committee on the economy and production to convene hearings into establishing minimum service standards for ABMs.

While it is true that consumer experiences with ABMs have, in recent times, become a matter of concern, it is likely that Mr Jackson’s action is, in part, an attempt, using a different route, to get his proposal for comprehensive minimum service standards for financial institutions back on Parliament’s agenda. His private member’s bill on the subject was defeated in 2018.

Mr Jackson has since retabled it without success, thus far, getting it on the order paper.

FRUSTRATIONS

In recent months social media platforms have been awash with complaints about the poor quality of banking services generally, and frustrations with the use of automated banking and teller machines in particular. They are often not working, or are out of cash, causing people to move from one location to the other (and often several) to complete their transactions.

The matter reached Parliament earlier this month when the shadow finance minister, Julian Robinson, telegraphing from Jackson’s latest resolution, urged the Bank of Jamaica (BOJ), the regulator, to institute minimum service standards.

“I receive numerous complaints daily from banking customers who must travel from one location to another in search of a functioning ATM, often experiencing significant inconvenience and expense,” Mr Robinson said.

But according to Edmondo Jenez, the CEO of JETS Limited, the company that runs the major network linking ABMs, 95 per cent of the people who use these machines are satisfied.

“... There are some people who have the unfortunate experience of going at a time when the machine is out of cash,” Mr Jenez told the Observer newspaper.

The real problem, he said, was that people are doing more ABM transactions – which banks have been encouraging their customers to do, rather than coming into their halls.

“... As a result, the machines are running out of cash faster than they used to,” he said. This is compounded at popular venues where the ABMs are even more heavily utilised.

The BOJ seems blissfully unaware of these issues, telling the newspaper that it had received only 30 complaints about malfunction ABMs and point of sale (POS) machines over the past five years – five of them in 2022.

It is not clear whether the central bank believes that those numbers represent the real state of the malfunctioning/out-of-service ABMs and what it believes ought to be their efficiency standards. But were it to be convinced that those numbers represented the true situation, it would suggest that it was either out of touch or lacking a sense of mission of its consumer protection side of its regulatory obligations.

Even with Mr Jenez’s figure, and his suggestion of a high satisfaction rate, with an average 800,000 per month using ABMs, five per cent of them experiencing problems means around 40,000 people being inconvenienced at the machines during that period. That’s nearly half a million people a year.

It isn’t clear how Jamaica compares to other countries with respect to the availability and efficiency of ABMs, or the price and quality of service received. But if the causes of the problems are what Mr

Jenez said they are, there are obvious, and seemingly easy fixes. The question, therefore, is what are the constraints to their implementation.

OTHER ISSUES

But, as we noted earlier in these columns on December 2, there are also other issues to be considered as Jamaica inevitably increasingly institutes technology in the provision of banking service.

For instance, under Britain’s new Financial Services and Markets Act, passed over the summer, the Treasury is required to periodically set policy guidelines for regulators “about the provision of cash deposit and withdrawal services” offered by banks.

Although 85 per cent of Britain’s payments transactions happen digitally, the Treasury said banks must provide “reasonable provision of cash access service”, which it said meant “free cash access services” with respect to personal current accounts. Jamaicans pay for such withdrawals via ABMs. In Jamaica’s case, Mr Jackson also claimed that consumers lose huge amounts of money from the accounts by electronic theft involving ABMs, which they find difficult or slow to recover, causing hardships.

These are all issues around which there ought to be serious discussion and debate to find solutions in the interest of both consumers and financial institutions.

Indeed, even before Mr Jackson’s latest intervention, we suggested that the Consumer Affairs Commission cause the setting up of a commission of enquiry into current banking services. We still support this idea and the opportunity it would give to consumers – and bankers – to offer their concerns and perspective to an independent and impartial quasi-judicial tribunal.

We suspect that the government might be wary of going this route, fearing it might lose control of the process. While it contemplates the issue, the Speaker of the House, Juliet Holness, and the leader of government business, should urgently ensure that Mr Jackson’s resolution reaches the order paper for debate, leading to the proposed hearings by the economy and production committee.

 

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