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FirstCaribbean Jamaica testing mini-bank as growth concept

Published:Friday | May 15, 2015 | 12:00 AM
This FirstCaribbean branch in Portmore was the last addition to the banking network back in October 2009.

FOR THE first time in more than five years, CIBC FirstCaribbean Jamaica is adding to its network, starting this weekend with a 'mini-bank' in the busy township of Santa Cruz in St Elizabeth.

That will be followed up with a new and full-sized branch in Montego Bay in September.

Director of Retail Banking Channels, Owen Francis, says Santa Cruz is the test case for a new banking concept which FirstCaribbean is likely to replicate, if successful.

The first mini-bank will have a 'mini' staff occupying 5,000 square feet of space to serve the town, its 17 outlying districts and 21 housing schemes. Its operating guidelines include quick access and speedy service.

"It's not the conventional branch by our standards. It's a pilot for us. We are seeking to leverage technology to offer improved services and, by extension, using less people. We have a full-service ABM and a small number of staff," said Francis.

"The mini-branch is smaller than our traditional retail locations and is in line with the international trend in the banking industry. The branch will have a full-service ABM, but will also capitalise on new technology at that location, which will result in the smaller team being able to provide our clients with fast and efficient service that meet the needs of increasingly on-the-go customers."

The additional Montego Bay branch will open at Fairview, to expand the branch network to 14.

FirstCaribbean currently has brick-and-mortar operations in eight municipalities - five in Kingston, and one each in Montego Bay, Mandeville, Ocho Rios, Savanna-la-Mar, May Pen, Portmore, and Port Antonio.

The bank last added a branch at Portmore, St Catherine, in October 2009. Today, FirstCaribbean Jamaica is valued by assets at $67 billion, up from $52 billion when it last added to its network but still in fourth place in a market that has dropped to six banking groups from seven, after last year's merger of rivals Sagicor Bank and RBC Royal Bank Jamaica.

Francis declined to discuss the cost of the investment, saying only that most of the outlay was for security, and that the investment would be recouped in about five years.

"As a guide, we would expect our capital outlay to be approximately 20 per cent of the cost of a full-service branch," he said. Francis did not specify the cost of a full branch, but the bank's Portmore project was the equivalent of a US$1.5-million investment, the company said at the time.

The mini-bank is an upgrade from ABM services and will operate from leased space at 68 Main Street in Santa Cruz.

"We have been in that area for the past eight years. Since 2007, we have had an ABM at that location and another in Junction. We have seen a need in terms of the demands of the customers," the banker said.

The closest full-service branch is in Mandeville.

All transactional banking services will be available in Santa Cruz, including opening of accounts, applications for loans and Internet banking. Loans applications will be collected but processed elsewhere.

"Loan applications will be taken and processed centrally. Our systems are fairly automated; everything is scanned," said Francis. "We are now one of two banks with an online platform which allows customers to do interbank transfers from their own computer," he said.

If the Santa Cruz experiment is successful, the concept will be rolled out in other towns. Essentially, FirstCaribbean wants to go big by going small, saying the "bigger strategy is really to expand our footprint in Jamaica".

"We really want to see how this one plays out. It is a pilot - and not a cheap one - but to the extent that we see positive traction from this particular pilot, the intention is to replicate in other areas outside of Kingston," Francis added.

He said that the bank's own market surveys have determined that the demographic profile for a client in Kingston and Montego Bay was different from other areas, but primary need in all areas was for convenience.

"The idea of getting into a bank and getting out quickly, aspirationally, that is something that they want to see happening ... . Having somewhere to place funds and make an investment are basic needs, which are similar. The common thread in all of this is to ensure they are getting service wherever they go."

FirstCaribbean is expanding its network at the same time that the big two, National Commercial Bank Jamaica and Scotiabank Jamaica, are consolidating.

"We are seeing things a little differently," said Francis. "We are more bullish on what's happening in the market today; we are also judicious in what we are doing, which is why we are not rushing to do a full branch ... . We are seeing opportunities which are worth going after."