Wayne Robinson emphasizes that the implementation of the Automated Banking Machines (ABM) Service-Level Standards by the Bank of Jamaica (BOJ) is a step towards developing a comprehensive market conduct and consumer protection framework for the financial sector. This framework will ensure that all financial institutions are not only regulated prudentially but also monitored for their market conduct and their ability to address consumer protection issues.
The BOJ, under the leadership of Dr. Robinson, is working towards establishing the Twin Peaks model of financial sector supervision. This model, scheduled to reach Parliament by 2025, will see the BOJ responsible for prudential supervision and regulation of deposit-taking institutions (DTIs) and non-bank financial institutions, while the Financial Services Commission (FSC) will oversee market conduct and consumer protection for all financial services.
The recently issued ABM Service-Level Standards are guidelines for DTIs regulated by the BOJ on the operation of ABMs. These standards cover various aspects such as accessibility, availability of cash, infrastructure maintenance, client safety, fraud minimization, and financial education for ABM users.
Dr. Robinson explains that the decision to introduce these standards was prompted by challenges faced by financial services customers in accessing cash conveniently, particularly due to security-related issues and the upgrading of ABM systems to accept new banknotes. The Standards aim to address critical pain points and improve the overall customer experience.
Dr. Jide Lewis, Deputy Governor at BOJ, highlights the implementation of a robust framework to monitor DTIs’ adherence to the Standards. DTIs are required to submit detailed information on their ABM performance to the BOJ monthly, which will be shared with the public on a monthly basis with a two-month lag.
DTIs have a nine-month transition period to comply with the new ABM guidelines, during which improvements are already being seen, especially in ABM uptime. Dr. Robinson emphasizes that while banks are implementing measures to address issues outlined in the Standards, it will take time to fully implement all necessary reforms.
Overall, the implementation of the ABM Service-Level Standards is a significant step towards enhancing market conduct and consumer protection in the financial sector, ensuring a safer and more efficient banking experience for customers. Lewis has emphasized the provisions outlined in the Banking Services Act (BSA) to address non-compliance by Deposit-Taking Institutions (DTIs) after the nine-month transition period ends. He explains that detailed reviews will be conducted on each DTI to ensure adherence to the guidelines. If widespread non-adherence is found, increased supervisory scrutiny, including onsite examinations, will be implemented. The BSA allows the Central Bank to take actions in cases of non-adherence, particularly in matters concerning safety and soundness. Entities may receive warnings to address issues identified during onsite reviews, and directions may be issued for widespread non-adherence. Non-adherence could involve weaknesses in internal control environments, such as policies not being followed or governance issues. Dr. Lewis also mentions that if widespread issues with Automated Banking Machines (ABMs) are discovered, appropriate actions will be taken. DTIs have shown support for the Standards, with improvements seen compared to previous years. The guidelines can be found on the Bank of Jamaica’s website.