“HSBC closing down branches and ATMs”. “Longer hours at BOV branches”. “No plans for closing of branches at APS Bank”.
These, et similia, have been some of the newspaper headlines in this area locally over recent months. The various actions in these contexts, as contemplated and implemented by our local banks, suggest that a debate sorely needs to be undertaken about what is really going on in the boardrooms of our local banks regarding such decisions.
The number one reason that is thrown at the public to justify some of the closures is that banking is changing. It certainly is, but does whatever change is happening fully justify all the eventual closure decisions? Does it justify eventually rendering certain towns and villages with absolutely no banking outlets in their often-vast expanses?
Sliema and Birkirkara are only two examples of large towns where citizens have been deprived of the former personalised banking services.
No longer is there an ATM in the Manwel Dimech/police station area; in Birkirkara there no longer is an ATM in the St Helen area; key HSBC branches are being eliminated in Balzan, St Paul’s Bay and elsewhere.
One is appreciative of the fact that bank boards are nowadays hammered hard and solid by the big quantum of regulation that is constantly coming their way via EU Banking Union diktats, and other sources.
Increased capital requirements, increased risk management obligations, ever costlier technology, more regulatory decisions (both local and foreign) blowing down their necks, higher fees, higher fines… these and so many other elements are pushing towards, yes, resizing.
But in the local milieu, they are having to do all this within a very positive and thriving economic conjuncture.
They must certainly accept this reality and not, whenever they perceive (misguidedly?) a dark cloud, take it out on the humbler of their citizen customers. Are they opting for that old-fashioned ‘austerity’ when they should really be thinking in terms of ‘growth’… popular growth for that matter… indeed, perhaps APS may have found the right formula!
Why has the role of the local kind and knowledgeable branch manager been close to being killed off in our towns and villages?
When the late Louis E. Galea, banking visionary par excellence, took branch banking outside of Valletta and spread it all around Malta and Gozo, one of his main motivations was that bringing bankers and citizens closer together was of benefit to both.
The former important human functions carried out by good branch managers are now no longer the case.
And in the process, some of the banks have, willingly or unwillingly, ended up with popular tags that they themselves probably least wanted: HSBC is popularly known as the bank only for good, big and successful businessmen; BOV has ended up with the tag of carrier of the state’s riskiest adventures; APS Bank strives hard to be close to the people but is handicapped in terms of capital and sufficient outlets; Lombard Bank and BNF are also-rans with all eyes firmly on the balance sheet and regulatory compliance.
It will sound like heresy to some who hold high positions in some of our banks to compare the role of bank branches in the community to that of the local pharmacy, the local grocer, the local newsvendor, or even the local parish church.
When, in the late 1970s, many local politicians threw their weight with both Bank of Valletta and Mid-Med Bank to instigate the opening of band branches in their constituent towns and villages, the animus was obviously that their citizen voters (especially the older ones) would not be forced to travel, or change their financial habits, to simply get service. Nowadays, the response to such a stance is to force older people into going digital “or no banking for you”; hardly the kindest of treatment…
When simple people need simple financial advice, when they need to actually cash in a pension cheque, when they need a personalised financial service revolving around ‘rites of passage’ events that occur to all of us at some point in our lives, basic information about borrowing… these and so much more will only be suitable to many citizens if provided physically, and not off a computer monitor or some mobile app.
Such people want and need the person in the branch attending to them to be, not only knowledgeable, but to also have a degree of decision-making power. Why has the role of the local kind and knowledgeable branch manager been close to being killed off in our towns and villages?
We are here clearly arguing for a saner and kinder social role for banks in our communities. It is a topic that the citizens themselves can, and should, take up with their own local politicians, NGOs and other bodies (including the trade unions), and party committees should not hesitate to push the subject up in their hierarchies.
It is even a matter that regulators cannot simply flinch away from with the excuse that they are not empowered to do anything about it, because “this is simply a business decision matter”; it is not!
Strong rumour has it that when HSBC took the decision to embark on their latest series of closures, they never informed the local regulator that they were thinking about doing so.
The regulator was only informed on the evening when it had become a fait accompli decision… so much for arrogant use of power and absence of courtesy!
When it is known for a fact that strong efforts are being made to attract more banks to establish themselves in Malta, it is important to think about and discuss what sort of social role, or public service obligation, these can be tied to.
There is a big-business and modern technology dimension that is very much an integral part of today’s banking realities everywhere… but there is also a people’s side, and to ignore it completely is bad, and cruel, and can also have serious political consequences.
Dr John Consiglio teaches in the Dept of Banking and Finance of the University of Malta.