Banks downplay fee findings
Published:Sunday | October 10, 2010 | 12:00 AM
Sabrina Gordon, Business Reporter
Commercial bank are downplaying findings of massive fee increases in the Consumer Affairs Commission's (CAC) bank charges survey. They are pointing instead to efforts being made to encourage clients to make use of the most cost-effective means of accessing the services offered.
"We consider the method that we use to determine our fee structure to be very customer friendly. In determining the fees charged, we look at the various costs of delivering this service to the customer and we do a competitive analysis in the market to ensure we are not out of line," said Maureen Hayden-Cater, president of First Global Bank.
"We go further by encouraging our clients to use our most cost-effective channel of delivery of service such as Global ACCESS. This electronic platform is given free of cost to every customer on the opening of an account and they are encouraged to use it," she said Thursday.
Of the six banks surveyed by the CAC, First Global Bank was identified as the one with the highest fee increase.
The survey findings indicated a whopping 400 per cent increase in the cost that First Global charges for a balance enquiry on one's account.
This was the highest increase found among the more than 48 services offered by commercial banks covered in the survey. A 350 per cent increase was also reflected in the fee charge by the bank for setting up a local currency standing order, with the cost moving to J$450 from J$100.
Bank of Nova Scotia and RBTT recorded the third highest increase of 150 per cent for the period. For Scotiabank, the 150 per cent increase was seen in the charge for local currency transfer between own accounts, while RBTT moved the price it charges for US currency cheques returned by a similar 150 per cent.
Additionally, Scotiabank also showed another 127 per cent increase in charges for transfer between dormant local currency savings accounts.
Making up for lost ground
Announcing the results on Tuesday, Minister of Industry Investment and Commerce Karl Samuda said it was clear that banks had increased fees to make up for lost ground with the reduction of interest rates.
He said he would be seeking discussions with the Jamaica Bankers Association (JBA).
The JBA has chosen not to speak immediately on the implications of the survey, though even before the release of the results, grumblings by the public about expensive fees had been rising.
"The JBA is unable to participate or comment at this time; however, I would like to suggest that you contact the individual institutions and invite them to participate on their individual shop's behalf," said the JBA secretariat on Thursday in response to Sunday Business.
But the banks contacted said they were yet to peruse and analyse the bank charges survey results and so could not speak to it.
"RBTT Jamaica Limited is not in a position to offer a comment at this point in time as we have not had the benefit of reading the actual report," said Annette Atkinson, manager of corporate communications and brand at RBTT.
"We would prefer to understand the full scope and context of the report before responding," she said Wednesday.
The country manager for RBTT, Minna Israel, is also president of the JBA.
Scotiabank took a similar stance in its response on Thursday.
"We are currently waiting to receive a copy of the CAC survey so that we can fully assess the results and therefore be in a better position to comment," said chief financial officer of the banking group, Jacqueline Sharp.
"However we would like to impress that Scotiabank currently goes through a detailed process when reviewing fees and determining whether they need to be adjusted, which we will continue to be guided by," Sharp added.
The survey results were published in the print media on Friday, with Scotiabank asking for more time to review the data.
While the survey result will create a heightened awareness among consumers, no change in pricing strategy from at least one bank will be forthcoming.
"We believe the recent survey will increase customers' awareness, and given that our pricing review is done annually, this will not impact our strategy," said Hayden-Cater of First Global.
National Commercial Bank Jamaica, the largest commercial bank with assets of $322 billion and capital of $46.4 billion, said it would continue to look at ways to deliver services that are cost effective for consumers.
"We will also continue our focus on driving further efficiencies in our operations as we believe that this will present opportunities for us to expand the ways in which we serve our customers and give them choices that are convenient and cost effective," said Sheree Martin, senior assistant general manager for marketing communications and service delivery.
"We have intensified our efforts to educate our customers and this has been done through our 'cut your bank fees' media campaign, which we first introduced in February and relaunched at the end of August this year. The response has been very encouraging to date, as we see where more and more customers are availing themselves of the ways we provide to minimise fees," she said.
Like the other banks, NCB also pumped up fees for some services this year.
Two highest increases
The two highest increases for NCB were seen in the contentious minimum balance charge on local currency, which moved by 125 per cent from J$80 to J$180; and a 122 per cent increase in the charge for withdrawal from savings accounts, which moved from J$90 to J$200.
The other two banks that participated in the survey, FirstCaribbean Jamaica and PanCaribbean Bank, showed less drastic movements in prices.
FirstCaribbean averaged a one per cent increase, a decline in fees in some cases, or no movement at all. The highest increase for the regional bank was a 68 per cent movement in cost for local standing orders.
PanCaribbean Bank fees for most services remained unchanged. Its highest recorded increase was 204 per cent on outward telegraphic transfers.