The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Fidelity Bank (Bahamas) is defending its imposition of a fee for in-person services by describing the sum involved as “nominal” and pointing out it is the last bank to levy such a charge.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business he is “empathetic” towards negative reaction by Grand Bahama customers over the imposition of such a fee but argued that it is necessary to cover the costs associated with providing in-branch services.

“I try to break it down very simply. When you ask a plumber or an electrician, a lawyer or a doctor, to provide services to you, you expect there to be a billing for their professional time and hours that they put into it,” he explained.

“Historically, financial institutions, whether customers like hearing it or not, used to effectively subsidise what I’m going to call the professional services that they obtained in the branch. When you look at the various types of services, or when you do lending, there are usually loan fees and that helps to compensate for overhead and staff costs.

“When you have merchant services, credit cards etc, there are fees and all of those are designed to generate a profit but, more importantly, to cover the costs.” Fidelity Bank (Bahamas) is the last commercial bank in the country to implement fees for in-person services, and Mr Bowe described the charge as “nominal” and not a bid to unduly burden the customer.

“When you look at teller services, in particular, which is really the ones we’re looking at in terms of in-person, those have been services that are really uncompensated,” he added.

“When you come in to deposit or withdraw, putting money on an account or taking money off an account does not earn the bank any income, particularly if you are a transitory customer where you are not leaving money on deposit where you can lend it and earn a return. It truly is one that is uncompensated.

“There has been a move to how do we provide these services in an efficient way, but in a cost effective way. Because if every service of the bank goes uncompensated, the bank loses money, shareholders lose their equity investment. If it gets so severe, then depositors lose money.”

Fidelity Bank (Bahamas) is now encouraging customers to use its online banking facilities for faster service that is free of charge. “We have not changed any cost structure and online banking is completely free,” Mr Bowe said.

“At this current point in time, we’re saying that if your preference just simply was to see the pretty smiles of our ladies and the dapper Dons, as our gentlemen, in terms of putting money in and taking it out, then there’s going to be a cost associated with that because we have to pay for them and we have to pay for the overhead.

“If there are services that you cannot perform online, and you cannot perform at the ATM, those are not being levied with the fee, but it is really saying that we would want you reserving the in-person services for those that are value added.”