By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The number of Bahamian Internet banking users grew by 39 percent in 2024 to more than 164,000 despite the failure by payments providers to fully integrate the Sand Dollar digital currency.

The Central Bank, in its 2024 annual report, also disclosed that the volume of digital wallet transactions declined year-over-year despite the regulator and industry's ever-escalating drive to push consumers to electronic banking channels.

"Financial institutions recorded increased usage of Internet banking services during the review year," the Central Bank said. "Internet banking solutions afford customers the ability to check their account balances, make transfers between personal and third-party bank accounts, pay utility bills and purchase foreign currency.

"The range of Internet services varied among financial institutions, and some banks levied fees for the facilities. During 2024, the total number of users, inclusive of residential, business, public sector and other users, expanded by 39 percent to 164,262." However, this has yet to translate into increased Sand Dollar and digital wallet usage as a payments option.

"Retail payments activity, facilitated by electronic money service providers (EMSPs), was marginally reduced when compared to 2023 despite increased account usage among individuals and authorised financial institutions' (AFIs) more entrenched educational outreach in the Family Islands," the Central Bank added.

"While integration of the digital currency platform with the ACH (Automated Clearing House) provided for more efficient funds transfers, AFIs have not fully implemented this low-cost functional convenience in their proprietary wallets. Government-to-people (G2P) and business-to-persons (B2P) also remained under-utilised, both of which are expected to receive more sustained emphasis in 2025.

"The number of digital wallet service providers held steady at seven, although the number of agents decreased by 19.5 percent to 140. Digital wallet services registered a 78 percent reduction in top-up transactions in 2024, and a corresponding 44.2 percent decline in top-up values to $10.4m," the banking regulator continued.

"Correspondingly, the frequency of withdrawals decreased by 10.6 percent alongside a 35 percent contraction in the associated value to $16.2m. As for payments, the volume of person-to-person (P2P) transactions reduced by 19.9 percent, with the associated value lower by 14 percent at $4.8m.

"Person-to-business (P2B) transactions also decreased by 4.3 percent, but the attendant value rose by 1 percent to $50.5m. Concerning business-to-business (B2B) transactions, the number of transactions declined to 45 from 188 in 2023, while the corresponding value decreased to less than $0.1m from $4.8m in the previous year when there were heightened SandDollar promotions.

"At end-2024, the total number of e-money users increased, with the volume of residential user accounts rising by 17.2 percent (21,426) to 146,093, while business accounts advanced by 15.3 percent (283) to 2,131."

Elsewhere, the Central Bank said the newly-created financial services ombudsman post had either resolved or closed 90 percent of the 107 consumer complaints it received in 2024 regarding financial services providers.

"The Office of the Financial Services Ombudsman (OFSO) continued to explore the development of a more established consumer financial protection framework for The Bahamas, supported by legislation, while strengthening the bank’s public education and engagement on ongoing concerns raised by the public. Staff resourcing for the unit was increased in 2024," the Central Bank said.

"During the year, OFSO liaised directly with financial institutions to help resolve complaints referred to the Central Bank from the public. The OFSO handled a total of 107 complaints and inquiries in 2024, with approximately 90 percent of the cases resolved or closed by year-end.

"The majority of complaints for the year related to mortgages and collateral document processes, reflecting a key area of concern for consumers. As an extension of this outreach, the OFSO also provided trend analysis and complaint resolution at meetings with industry participants, highlighting opportunities for improvement and increased focus."

As for so-called dormant accounts, which attain such status after seven years of activity, the Central Bank said these totalled some 45,780 accounts containing a total $128m at year-end 2024. "Banks are required by law to transfer such amounts to the Central Bank for safekeeping until the account holders claim the funds," the Central Bank said.

"Unclaimed funds are escheated to the Government immediately upon transfer to the Central Bank if the account balances are $500 or less, and after a further period of ten years for all other balances. As at December 31, 2024, the bank maintained custody of 45,780 dormant accounts totalling $128m denominated in five currencies. 

"Balances in US dollars and Bahamian dollars combined accounted for 92.9 percent of the total, while the Canadian dollar, Swiss franc, Euro and British pound accounted for the remaining 7.1 percent. In accordance with the law, as at December 31, 2024, an estimated $5.8m in dormant funds was due for escheatment to the Government against the applicable ten-year custodial period expiration."