Republic VP responds to fee backlash: Banks face security, compliance costs

PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

New­ly in­stalled pres­i­dent of the Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce, Karen Yip Chuck, has said while cus­tomer con­cerns about the in­crease in the bank’s fees are valid, there has been a “com­plex and cost­ly en­vi­ron­ment” cre­at­ed by cyb­ser­cu­ri­ty con­cerns and reg­u­la­tions re­quired for an­ti-mon­ey laun­der­ing frame­works.

In re­sponse to a query from Guardian Me­dia, Yip Chuck said, “First­ly, it is en­tire­ly un­der­stand­able that busi­ness­es and in­di­vid­u­als are con­cerned about any in­crease in bank­ing fees. For mi­cro, small and medi­um-sized en­ter­pris­es in par­tic­u­lar, trans­ac­tion costs, over­draft charges and penal­ty fees can have a re­al im­pact on cash flows and day-to-day op­er­a­tions, es­pe­cial­ly in a chal­leng­ing eco­nom­ic en­vi­ron­ment.”

She con­tin­ued, “From the stand­point of the Cham­ber, these con­cerns are valid and should be heard. Trans­paren­cy, fair­ness, and clear com­mu­ni­ca­tion are es­sen­tial to main­tain­ing trust be­tween fi­nan­cial in­sti­tu­tions and the com­mu­ni­ties they serve.”

How­ev­er, the Cham­ber pres­i­dent, who is al­so the group vice pres­i­dent of Re­pub­lic Bank Fi­nan­cial Hold­ings Lim­it­ed, ex­plained that there were many op­er­a­tional is­sues fac­ing lo­cal banks that may not be eas­i­ly no­ticed by the wider pub­lic.

She said, “At the same time, it is im­por­tant for the pub­lic dis­course to recog­nise that com­mer­cial banks, both glob­al­ly and here in Trinidad and To­ba­go are op­er­at­ing with­in an in­creas­ing­ly com­plex and cost­ly en­vi­ron­ment. For ex­am­ple, lo­cal­ly, banks are re­quired to make on­go­ing and sig­nif­i­cant in­vest­ments in: Cy­ber­se­cu­ri­ty and fraud pre­ven­tion, as fi­nan­cial crimes be­come more so­phis­ti­cat­ed; reg­u­la­to­ry and com­pli­ance frame­works, in­clud­ing AML/CFT (An­ti Mon­ey Laun­der­ing/Com­bat­ing Fi­nan­cial Ter­ror­ism) oblig­a­tions aligned with in­ter­na­tion­al stan­dards and tech­nol­o­gy and pay­ments in­fra­struc­ture, to en­sure re­li­a­bil­i­ty, speed, and re­silience.”

She stressed that these are not op­tion­al in­vest­ments, but are fun­da­men­tal to pro­tect­ing de­pos­i­tors, main­tain­ing con­fi­dence in the fi­nan­cial sys­tem and en­sur­ing that Trinidad and To­ba­go re­mains in­te­grat­ed in­to the glob­al fi­nan­cial net­work.”

Yip Chuck al­so ex­plained why spe­cif­ic trans­ac­tions were hit with fee in­creas­es.

She said, “The fees that at­tract the most com­men­tary—such as those re­lat­ed to cheque books, drafts, man­ag­er’s cheques, over­drafts, and late pay­ments—tend to be as­so­ci­at­ed with man­u­al, pa­per-based, or high­er-risk ser­vices. From the bank­ing stand­point, I can tell you that these ser­vices are more ex­pen­sive to process on a per-trans­ac­tion ba­sis; re­quire greater hu­man in­ter­ven­tion and con­trol and car­ry high­er op­er­a­tional and cred­it risk.”

The Cham­ber pres­i­dent how­ev­er did not turn a blind eye to the in­creased fees’ im­pact on the busi­ness com­mu­ni­ty, not­ing that it could es­pe­cial­ly af­fect SMEs, based on how bank­ing ser­vices are used by these busi­ness­es.

She ex­plained that busi­ness­es that re­ly heav­i­ly on elec­tron­ic trans­fers, on­line bank­ing plat­forms and au­to­mat­ed pay­roll and bulk pay­ments may see min­i­mal im­pact but those that de­pend more on cheques, fre­quent over­drafts, or man­u­al in­stru­ments would feel the change more sig­nif­i­cant­ly.

She said, “From a pro­fes­sion­al and ad­vi­so­ry per­spec­tive, this un­der­scores the im­por­tance of fi­nan­cial plan­ning, cash-flow man­age­ment, and on­go­ing di­a­logue with bank­ing part­ners. Banks/bankers like my­self are al­ways will­ing to work with and guide cus­tomers to iden­ti­fy more cost-ef­fec­tive trans­ac­tion struc­tures or suit­able al­ter­na­tives.”

She closed her re­sponse stat­ing, “This con­ver­sa­tion should not be framed as a bank/banks ver­sus cus­tomers/the busi­ness com­mu­ni­ty, but rather as a shared ef­fort to mod­ernise our fi­nan­cial sys­tem while en­sur­ing that it re­mains fair, se­cure, and sup­port­ive of na­tion­al de­vel­op­ment.

“As pro­fes­sion­als, we must con­tin­ue to ad­vo­cate for re­spon­si­ble bank­ing prac­tices, open en­gage­ment, and so­lu­tions that work for both fi­nan­cial in­sti­tu­tions and the busi­ness­es that are the back­bone of our econ­o­my.”

Yip Chuck said the Cham­ber is en­cour­ag­ing busi­ness­es to ac­tive­ly en­gage with their banks, seek clar­i­ty on fee struc­tures, and ex­plore dig­i­tal tools that may re­duce their over­all bank­ing costs.