First Global takes the lead with first agent banking window
First Global Bank, a subsidiary of GraceKennedy Limited, aims to set up 30 branded locations by next year through a network of agents or third-party operators.
In the medium term, GraceKennedy Group CEO Don Wehby wants 100 agent locations to match the company's 100th anniversary by 2022.
The company expects to ride on its money services network of more than 120 locations to offer other services, including banking.
This would cost as much as $1 billion to achieve, but the expenditure would be spread between the agents and GK, Wehby said.
"It costs between $5 to $10 million to set up an agent location," he said, while showing off the booth and tellers attending to clients inside the First Global Agent Bank operated by Stapharm Services Limited at Boulevard Shopping Centre in Kingston.
The location, already a GKONE-branded store, offers all GK financial services, including Western Union remittance services and cambio services.
With the launch of the agent window at Stapharm, First Global on Thursday became the first bank to offer banking agency services, more than two years after legislation was passes to facilitate it.
Parliament passed the regulations in 2016 allowing retail and other non-banking businesses to offer banking services on behalf of commercial banks.
At the targeted 100 agent bank locations, GraceKennedy would offer customers one of the largest banking networks in Jamaica, assuming rivals do not outpace its growth. First Global currently operates from 12 locations, with Stapharm as the 13th.
The next agent window will open in May Pen, Clarendon.
Patrick Brissett, principal of Stapharm Services Limited, said his company will open another First Global agent location in Morant Bay, St Thomas, for which regulatory approval is being awaited from the Bank of Jamaica.
He said that offering banking services was a natural fit for his GKONE location and accepted what amounted to a challenge to open the First Global banking window.
"GK has a lot of confidence in us," said Brissett, who added that the location did not require a heavy investment to set up since GK-related services have been offered there since 2007.
The withdrawal and lodgement limit at agent banks is $50,000 per day. Customers can make payments, check account balances, and make account deposits and withdrawals at agent windows, for which there are no transaction fees.
Milestone for country
First Global President & CEO Mariame McIntosh Robinson said the inability to collect fees at agent windows was balanced by greater customer access.
"The milestone is not only significant for us as a bank and for the GK Group, but for us as a developing country, where so many of us still manage money informally through family and friends or the proverbial 'under the mattresses'," said McIntosh Robinson.
"With agent banking, we are empowering more people to get ahead by making legitimate banking services more accessible through a local agent who operates nearby in the community."
No large capital outlay is required to set up an agent banking window. The licensee can operate with as little as a desk and counter space, the bank president said.
It's estimated that 30 per cent of the Jamaican population save through a regulated financial institution. Agent banking seeks to address that deficit by offering more locations in spots convenient to consumers to do transactions, such as their local grocery store.
At Thursday's event, Finance Minister Dr Nigel Clarke described the launch of agent banking as a triple win for parties involved.
"It is a win for financial intuitions as they serve more customers. It is a win for customers and [a] win for the economy," Clarke said in his address.