By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

CIBC FirstCaribbean last night justified its decision to halt physical in-branch transactions from January 3 - a move that will impact thousands of Bahamians - by asserting that 85 percent of clients are already using digital banking channels.

The BISX-listed bank, which is more than 95 percent owned by its Canadian parent through the regional Barbados head office, disclosed its plans to cease processing virtually all forms of over-the-counter payment transactions in the New Year via an internal staff briefing paper.

The document, which has been seen by Tribune Business, reveals that “effective January 3, 2023”, CIBC will no longer facilitate cash and cheque deposits; cheque cashing; corporate and small business deposits; withdrawals under the daily $3,000 automated banking machine (ABM) limit; credit card payments; bill payments; domestic and international transfers; transfers between CIBC accounts and with other CIBC clients; and third party transfers physically in its branches.

Other in-branch services that will also be discontinued are the opening of “personal and sole proprietorship” bank accounts and deposit account openings. However, the briefing paper added: “Clients will still be required to visit the branch to open accounts for politically exposed persons (PEPs) and joint accounts.

The move marks the latest step by CIBC, in common with other Bahamian commercial banks and especially its Canadian-owned counterparts at Royal Bank of Canada (RBC) and Scotiabank, to increasingly drive consumers towards using online, Internet and ABM banking channels to conduct regular transactions and day-to-day financial services business.

The COVID-19 pandemic, with its lockdowns and associated restrictions, has merely accelerated this drive. Explaining the rationale for its move, which is due to take effect in just over a month once the Christmas and New Year holiday is over, CIBC told staff: “Effective January 3, 2023, CIBC FirstCaribbean branches in The Bahamas and Turks and Caicos Islands will no longer be processing over-the-counter transactions that can be performed via our alternative banking channels.”

These were listed as the bank’s instant teller/smart ABM network; night deposit box; online banking and mobile app. “This change supports the bank’s vision of delivering a modern digital banking experience which is personalised, easy and convenient,” CIBC staff were informed. “It also supports our frontline teams by freeing up capacity to focus on providing additional value-added service to our clients.”

No mention was made of any redundancies that will result from the move. Teresa Mortimer, head of the Bahamas Financial Services Union, which represents CIBC’s line staff, last night told Tribune Business there had been no talks with the bank over potential lay-offs resulting from the move.

“I haven’t had any discussions about staff being laid-off because of that,” she confirmed. “They’ve been driving the digital channel for a while. I’ve said to them that it’s alright to drive, but you have to prepare your elderly population. There’s been no talk about lay-offs. Not even with the Palmdale branch’s closure. For right now there’s no loss of staff because of it.”

While use of digital and electronic banking channels has been increasing among Bahamians and local businesses, CIBC’s January 3 move will still likely represent a culture shock for many and those used to conducting transactions physically in-branch - especially the elderly - may be faced with a steep learning curve.

Queues seen oustide the bank’s branches at Mall at Marathon and Sandyport indicate many persons still do banking in-branch, as well as raising questions as to how many tellers are on duty. This newspaper, though, understands that CIBC will make staff available to assist persons in conducting transactions via the ABM.

The BISX-listed bank, in a statement issued to this newspaper last night, made clear its irritation over the fact its plans had leaked prematurely. “It is unfortunate that an internal briefing document that was meant to prepare our team for the cessation of payments over-the-counter has been circulated in the public domain prior to the bank circulating communications to the public on the matter,” CIBC said.

“We encourage our clients, who need additional support to perform transactions on our digital platforms, to reach out to our branch teams who are there to provide that assistance. Our digital banking officers will be on hand to show clients how to use the ABM to make deposits, transfers or to get cash during the transition. Additionally, our website has video tutorials to walk clients through the processes.”

Explaining the rationale driving the changes, CIBC said: “The fact is that, since the days of the pandemic, when no one was allowed in our branches for transactions of any kind, we have been preparing our clients for this change. It is also a fact that at this stage a very small percentage of our clients are still coming into the branches to make payments. We have continued to observe a noticeable decline in clients performing over-the-counter transactions.

“With advancements in our digital services, there have been an increasingly greater number of clients who wish to execute their transactions in a safe, easy and convenient manner through our alternative channels. In fact, over 85 percent of our clients have been performing transactions such as wires, credit card payments and withdrawals under the ABM limit, which have been in effect for a number of months.

With the advancement of technology and the availability of digital banking solutions that have allowed our clients to do their banking anywhere and at any time, either from their mobile devices, the home computer or our extensive ABM network, it is simply no longer necessary for clients to come into the branch to perform every day transactions such as payments. This allows our branch teams more time with each client to be able to provide more value-added services.”

Pointing to The Bahamas’ and Central Bank’s broader public policy goals, CIBC said: “It is also public knowledge that, from as early as last year, The Bahamas has been moving towards the elimination of the use of cheques in the country, and that the use of electronic channels such as those employed by CIBC FirstCaribbean are being encouraged.

“Additionally, most entities such as utility companies have introduced over the past several years methods of online payments for their services, thereby eliminating the need for commercial banks such as CIBC FirstCaribbean to continue to process such payments.”

Bahamian commercial banks have been steadily shrinking the size of their branch networks for more than a decade, first exiting unprofitable Family Island locations before making similar moves on New Providence as they seek greater efficiencies, cost savings and economies of scale. Branch locations are also being converted into what they term “service centres” focused on meeting customers’ credit and other needs.