Commercial banks in Guyana have the technologies to improve service to the poor
In my last column I wrote about the repressive practices of commercial banks in Guyana that disproportionately affect the poor of Guyana. The Freddie Kissoon column referenced this on October 1.
I acknowledge Freddie’s crusade for commonsense policies that benefit the poor and working class of Guyana. That said, Freddie is way off about my advocacy for poor-friendly policies in commercial banking in Guyana; I’ve been in this pit a long time. As an example, I wish to take him back to the opinion columns of Kaieteur News of 28th March 2013, a letter entitled “An Illegal, Illogical and Repressive Practice,” primarily referring to the onerous banking requirements for proof of address and sundry other matters. This particular piece even drew a public response from the operations department of GBTI because they were specifically named.
I clash with bank seniors all the time, either by telephone or in person, on the repressive nature of their services and like the 2013 response from GBTI, the banking executives almost always hide behind the Anti-Money Laundering and Countering the Financing of Terrorism (AMLCFT) Act, by stating that the service is the way it is because of the Act or because of Central Bank regulations. These are more often furthest from the truth. The requirements for identification and address, for example, comes from the concept that financial institutions should “know their customers.” That is to say, financial relationship should only be established with a “legal person” who is provable and identifiable by reasonable conventional means. For “natural people” the law is quite liberal with respect to proof of address. Once the customer can be identified as (or proven to be) a living breathing person, a transaction or collection of transactions that, in and of itself, is not suspicious can proceed pending verification of the associated information as soon as is both reasonable and practicable thereafter. Therefore, by no stretch of the imagination, a person who is trying to establish an account with the minimum balance of $5,000 for the purpose of receiving their monthly salary, should be turned away because they do not have a proof of address at that moment.
Commercial banking policies in Guyana continue to be harsh to the poor and working class because the cognitive dissonance of the commercial banking cartel of Guyana runs deep. They suffer from corporate “Groupthink” which is commonly defined as “a psychological phenomenon that occurs when a group of corporate managers prioritise harmony over critical thinking, leading to irrational or poor decisions.”
This induces a lack of financial innovation. I once chatted with a senior banking executive in Guyana about my experience with the ease of doing commercial banking transactions in China. His response was that, we cannot compare Guyana with rich countries like China. That response was jarring to my mind because that individual rose to the pinnacle of commercial banking in Guyana while possessing such deep stagnating mentality. That executive clearly does not understand even basic innovation theories.
Innovation, generally speaking, needs ideas and resources; commercial banks in Guyana are certainly not without resources, but seems to be woefully short on ideas. In fact, no bank in Guyana needs to innovate any financial instrument or service The technologies for simplification of their services are already available all around the world. I will be bold enough to say the technologies are available and in the hands of the commercial banking system in Guyana and it’s a question of lack of desire to deploy.
The commercial banking cartel of Guyana can, if they wish, implement interbank ATM transactions within a fortnight, because they each have the technologies to make this happen.
I concede that the laws can benefit from a bit of tweaking, however, there is sufficient legal space within the existing laws to relieve the burdens the poor are asked to bear. I believe the managers of commercial banks in Guyana get a dangerous opioid-type addictive high when they see these long winding lines on the floor of the banks and at the ATMs. They seem to be inventing ways to create longer lines that disproportionately affect the poor.
It is my firm opinion that Republic Bank is the main culprit. It is the bank most capable of leading the deployment of innovative financial services but continues to hold the working class for ransom with perpetual policies that meets the criteria for financial oppression.
Many people may not know that when poor people are made to stand in lines that snake the floors of commercial banks, for considerable time and to add insult to injury, most of the time with only half the number of available teller stations functioning, there are special private transaction rooms on the floor of many banks available only to the rich.
Because of the heavy cash-based commercial finance architecture in Guyana, ATMs should rise to the level of a public utility and should be heavily regulated by the government for the convenience of the public. We can’t keep subjecting poor people of Guyana to this level of abuse, especially around the end of the month when working class people need to access their salaries.
DISCLAIMER: The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of the Guyana National Newspapers Limited.