The Tribune

Bahamians must “let your feet do the talking” if they feel they are being poorly treated or over-charged, a senior banker is arguing, with the latest data dispelling any fears of price-fixing on fees.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business that consumers must use the freedom to choose where they bank and switch institutions if they believe they are being exploited by excessive fees, poor customer service or other shoddy banks instead of always demanding regulatory or government action.

Speaking after the Central Bank unveiled its latest report on commercial bank fees for the six months to end-December 2024, he acknowledged that - while the findings are unlikely to ever “take the sting” out of criticism from many Bahamians - they eliminate any fears of industry collusion by revealing “significant variance” between institutions.

However, Mr Bowe said that Bahamian regulators - besides continuing consumer education - also need to align with their counterparts in the UK by constantly monitoring the market for price-fixing and other anti-consumer behaviour such as “bait and switch” tactics. These occur when institutions seek to lure persons to bank with them, or use a particular product, by offering a low-cost rate initially only to then suddenly raise it.

The Central Bank survey found that, for the six months to end-December 2024, commercial bank fees in The Bahamas exhibited “mixed trends” with those for digital transactions “rising incrementally” during the period. Yet they were much less costly than paper-based transactions.

Asked whether the Central Bank survey findings and their publication will ever allay constant public concern and attacks over bank fee charges, Mr Bowe replied: “The truth of the matter is I don’t think you’re ever going to be able to take the sting out of it for the critics....

“It’s not going to allay the concerns and the criticism, but what I can say is that the most avid critics - when I sit with them one on one - they accept what I’m saying but their argument is this particular institution or that particular institution has taken advantage of me. My response is: ‘Why are you still with that institution?’ If fees lead to customers departing, banks are not going to be open for very long.”

Asserting that many Bahamians forget that “they are not only depositors”, but also borrowers from the same bank, which provides employment and, in some cases, ownership opportunities for Bahamians, he added: “As long as there is a level of self-interest used to evaluate fees, we’re always going to have that criticism.

“As long as you believe, as a consumer, the Government should mandate how private entities operate clearly we’re going to have that criticism as opposed to having the private sector provide that information and let your feet do the talking. 

“Every customer dissatisfied with their bank has the choice to move to another institution,” Mr Bowe continued. “If there’s a belief that there’s price fixing and all banks have the same fees, that’s a different matter. The doesn’t take place because when you look at the fees there’s a significant variance between one category to the next.”

While acknowledging that the existing fees survey is “not perfect”, the Fidelity Bank (Bahamas) chief said the bi-annual report is developing sufficient data “for consumers to be educated” and the Central Bank to build on this with further efforts to show “how we measure the sustainability of banks” by examining their results and profitability.

He added that “the next step” is to enable consumers to analyse bank profits, “as opposed to harping on one aspect, which is the revenue”, and determine using industry benchmarks whether they are enjoying excessive returns at the expense of consumers. The present Central Bank fee survey only assesses the revenue side, and Mr Bowe said expenses and cost structure also need to be considered.

Urging regulators to beware “bait and switch” tactics, price fixing and other anti-competitive and anti-consumer behaviour, he added: “Things like that are what the Central Bank as regulator should be focused on and, after that, it just needs to enhance its consumer education programme.”

The Central Bank, though, in analysing the fees levied on Bahamians for deposit accounts, argued that not all customers have freedom of choice as to who they bank with as their loan/credit arrangements will mandate they open account with that particular institution. This is especially the case if a loan has been secured by salary deduction, as the lender will want the borrower’s income to be paid to an account with them.

“Compared to June 2024, and end-2023, domestic banks’ average surcharges for services provided through digital platforms rose incrementally during the second half of 2024,” the Central Bank found. “The average chequing account profile remained the most costly, while adult savings accounts continued to rank in the middle of the cost range.

“In terms of deposit account maintenance, a profiled retail banking customer employing maximum use of digital or electronic services options faced average monthly charges in the range of $2.65 to $16.49 per month, according to the December 2024 fee structure, compared to an estimated range of $2.49 to $15.91 per month, a year prior.

“Students receive the most concessions, followed by retirees. The average cost to maintain the adult savings account category reduced marginally since the first half of 2024, while reverting to the same range posted in the final half of 2023. However, the various categories of student, retiree and adult chequing accounts using electronic channels have been slightly costlier for some customers since at least mid-2024.”

As for paper-based transactions, the Central Bank said: “Customers that rely on physical or paper-based channels for services experienced mixed trends. In the half-year through December 2024, average monthly costs ranged from $9.72 to $27.10, vis-à-vis a range of $10.36 to $26.97 in mid-2024.

“Fees assessed for three of the constructed customer profiles decreased, though incrementally in some cases, from the preceding six-month period [to] June 2024. However, the average cost for adult chequing accounts rose over the survey period to December 2024, while stabilising incrementally for student facilities - notably vis-à-vis the December 2023 fee structure.

“Retirees still incurred the lowest profiled service prices, with estimated costs decreased compared to both mid-2024 and end-2023. Student-profiled accounts cost stayed only moderately higher than the retiree fees, whereas the average cost to maintain adult chequing and savings accounts were clustered close together on the higher end with checking account profiles being the most costly.”