Lo­cal Banks Can Learn Much From Dogs!

The Star (St. Lucia) - - LOCAL - By In­grid Flois­sac

anks in Saint Lucia con­tinue to in­crease fees and charges for ser­vices while they re­main com­pla­cent. Are the banks count­ing on con­tin­ued si­lence from cus­tomers? Last week I had rea­son to visit one bank’s ATM and saw the fol­low­ing no­tice, ad­dressed to “our val­ued clients”, sig­nal­ing ad­just­ments to fees as­so­ci­ated with cer­tain prod­ucts and ser­vices ef­fec­tive 11 May 2017.

No ra­tio­nale for the in­creases was pro­vided to cus­tomers, only a list of the im­pacted ser­vices: au­to­matic bank­ing ma­chine with­drawal fees, point of sale trans­ac­tion fees, cheque-re­lated ser­vices, main­te­nance ser­vices, lend­ing ser­vices, de­posit ser­vices, per­sonal chequing and per­sonal sav­ings ac­counts, busi­ness bank­ing, chequing and busi­ness bank­ing and busi­ness bank­ing in­ter­est ac­counts, per­sonal chequing plus ac­counts, per­sonal sav­ings plus ac­counts.

In­ter­est­ing, I thought. If I were this valu­able I would at least ex­pect such an im­por­tant mis­sive re­gard­ing fee in­creases to be ad­dressed to me via email or post. Then there is the usual jar­gon: ‘We’re trans­par­ent about com­mu­ni­cat­ing these changes to our cus­tomers and we en­cour­age cus­tomers to come and talk to us. We can guide you in se­lect­ing the best op­tions that match your needs.’ Are banks hedg­ing a bet that cus­tomers will con­tinue to main­tain a slug­gish at­ti­tude be­cause of the im­mense cost of mov­ing ac­counts else­where?

The notable de­crease in bank­ing hall (phys­i­cal) space to cause dis­com­fort and drive clients to use the ATM with no re­gard to cul­ture, then charge clients for us­ing the ser­vice at the ATM is un­ac­cept­able. Charges levied by banks in­clude but are not lim­ited to:

In­creased fees for is­su­ing cheques In­crease in the min­i­mum bal­ance re­quired to avoid charges on ac­counts In­creased trans­ac­tion fees for use of bank cards Min­i­mum pay­ment of in­ter­est on sav­ings ac­counts In­creased fees for ne­go­ti­at­ing loans In­creased fees for main­te­nance of bank ac­counts In­creased fees for point of sale trans­ac­tions In­creased fees for the use of the Au­to­matic Teller Ma­chine (ATM) In­creased fees for au­tho­rized and unau­tho­rized over­drafts In­creased fees for late loan pay­ments

Banks tac­itly re­duce ser­vices while in­creas­ing fees and charges. Is this fair bank­ing prac­tice? Does this rep­re­sent a new op­ti­mal level of mis­use of power?

In the face of any cri­sis, such as the bank­ing cri­sis of 2008, rad­i­cal change can be ex­pected. What about strate­gic changes rep­re­sent­ing a model driven by in­no­va­tion, ac­knowl­edg­ing creativ­ity?

The Eastern Caribbean Cen­tral Bank con­tin­ues to high­light its con­cerns re­gard­ing the in­crease in bank fees and charges across the Eastern Caribbean. How­ever, it re­mains pow­er­less as it has no author­ity to reg­u­late bank fees and charges. In 2015 the ECCB raised the is­sue of bank fees with the Mon­e­tary Coun­cil which com­prises the Eastern Caribbean’s Ministers of Fi­nance. One of the rec­om­men­da­tions was to cre­ate a Work­ing Group to re­view com­mer­cial banks’ fees and charges, and to re­port find­ings and rec­om­men­da­tions to the said Coun­cil.

To date, banks con­tinue to bla­tantly in­crease fees as there is cur­rently no reg­u­la­tion in place. The Gov­ern­ment of Saint Lucia must put for­ward a bill in par­lia­ment to cre­ate a work­ing com­mit­tee that has the au­ton­omy and author­ity to re­view, reg­u­late and ap­prove amend­ment to bank fees. It is time for the cit­i­zens of Saint Lucia to take demon­stra­tive ac­tion to im­pede this un­con­trolled ac­tion by the banks that is cost­ing cus­tomers hun­dreds of dol­lars through the over­charg­ing of fees and charges.

Banks must also un­der­stand that they have a so­cial obli­ga­tion to their clien­tele, which in­cludes serv­ing the in­ter­est of the so­ci­ety in which they op­er­ate. The irony is that all banks have in place ethics poli­cies. But what does this rep­re­sent? Have ethics be­come one-sided? Or have they sim­ply lost the health of their soul?

I can al­most hear the banks: “We must keep afloat.” But does this jus­tify the bla­tant in­crease in bank charges and fees? There is no ques­tion that banks are strug­gling to hold on to or expand a fair share of their clients’ wal­lets. It is said that a dog can change its bark de­pend­ing on what it is try­ing to tell you. Banks can learn from dogs. Start by re­duc­ing the quan­tity of in­for­ma­tion re­quested for loans, and amend the in­flex­i­ble busi­ness mod­els and con­structs. Non-tra­di­tional fi­nan­cial en­ti­ties have been able to claim a fair share of banks’ clien­tele sim­ply be­cause they are not as risk-averse and are more in­no­va­tive and ac­com­moda­tive to their clients by pro­vid­ing new com­pet­i­tive mod­els.

What have banks com­mu­ni­cated in re­cent times that have ex­cited their cus­tomers? Ab­so­lutely noth­ing! So the ques­tion re­mains: why have banks demon­strated no in­no­va­tion? Is it that they lack tal­ent? Are they clue­less? Are they too risk-averse? Are they afraid? Or is it just eas­ier to in­crease rev­enue and prof­itabil­ity and ap­pease share­hold­ers by in­creas­ing bank fees?

The Bank­ing Sec­tors in some coun­tries have rec­og­nized the im­por­tance of dig­i­tal sales and have in­vested in ap­pli­ca­tions to fa­cil­i­tate ease of do­ing busi­ness, al­low­ing cus­tomers to con­duct a wide range of busi­ness on the go. This is a sure way to in­crease cus­tomer base and re­tain ex­ist­ing cus­tomers. Banks need to dis­rupt and trans­form the cus­tomers’ ex­pe­ri­ence in a mu­tu­ally ben­e­fi­cial man­ner as op­posed to in­creas­ing their mar­gins, through hid­den, sneaky and bla­tant charges and fees.

The time to re­tal­i­ate is now!

When will gov­ern­ment step in to ad­dress the is­sue of ever-in­creas­ing bank fees and charges?

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