SVG’s ‘Penny Bank’ positioning for its next 80 years

St. Vincent Co-operative Bank, which 80 years ago allowed people with just a penny to access banking services, is positioning itself to survive the next eight decades.

“It’s a tremendous milestone when any business could reach eight decades of operations,” Marcus Ballantyne, chair of the board of directors of St. Vincent Co-Operative Bank told iWitness News.

“We have been serving the people of St. Vincent and the Grenadines with unwavering support and loyalty and commitment to the financial access and development of the people of St Vincent and the Grenadines,” said Ballantyne, who has been the chairman since July 2023, but has been a director for over 20 years.

“When this bank was started, only a penny was needed to make a deposit into the bank. So, it gave access to people who are less privileged to enter the financial space and into the banking system,” Ballantyne said.

“And from that time, we have grown to an institution of over $200 million in assets, catering not only to the working-class population but to all levels of society, giving them opportunities to be involved in the financial space.”

From the outset, the bank’s willingness to open accounts with a penny caused it to be affectionately known as “Penny Bank”.

It has maintained a reputation as a people’s bank and has benefited tremendously from the loyalty of its customers.

This loyalty has passed on from generation to generation, ensuring the continuity and growth of the bank, even as its primary operations have historically been savings and loans.

Ballantyne noted that all financial institutions grant opportunities to their clients and access but noted the St. Vincent Co-Operative Bank is an indigenous bank.

“We focus on catering to everyone in an expeditious, responsive and flexible manner. And I think we have developed a loyal clientele because service excellence is paramount for St. Vincent Co-operative Bank.”

The bank was incorporated on Oct. 18, 1944, and officially opened for business on Feb. 1, 1945.

It was founded by the late Ormond Cyril “O.C.” Forde who also served as its first manager.

Forde saw an opportunity in the 1940s to service the credit needs of the majority of Vincentians who faced difficulties in obtaining loans and banking services from the international banks operating in St. Vincent and the Grenadines (SVG).

Only a privileged few qualified for such services while a large market existed for the banking needs of the many.

Forde and the bank’s first president, Alfred G. Hazell were pioneers in developing the bank.

Ballantyne noted to iWitness News that the financial landscape is very dynamic, adding that over time, compliance and risk management have become increasing priorities for regulators and financial institutions alike.

This is to protect against the threats and risks attendant with money laundering, fraud, terrorism, and the anti-proliferation of weapons of mass destruction.

“So, like any other institution, we had to adapt by having the necessary technological infrastructure as well as human resources infrastructure to ensure that we are compliant with the legislation of St. Vincent and the Grenadines and with the policies, procedures and directives from our regulators, the Eastern Caribbean Central Bank.”

Ballantyne said these compliance requirements have driven up the cost of banking, but St. Vincent Co-operative Bank was one of the last banks in SVG to impose fees for saving accounts.

“… in order to give the customers an institution that’s credible and reputable and compliant, we were obligated to charge certain fees which are in line with what are being charged by the other commercial banking institutions to ensure that we can continue to operate in a viable, profitable and sustainable manner.”

The Co-operative Bank differs from a commercial bank in that it is a savings and loans institution.

Counting risks and rewards of commercialisation

“… we are endeavouring to become commercial but what differentiates us now, besides the fact that we’re not a full commercial bank, … is that we offer exceptional service in an efficient, effective and responsive manner. And really and truly, service excellence is our competitive advantage relative to the other banks in St. Vincent in the Grenadines,” Ballantyne said.

He said the bank acknowledges the increasing demand of customers for various financial services offered by commercial banks.

“We considered and contemplated pursuing commercialisation and we are at the point of doing a study to look at the rewards, benefits, costs and risks of adopting that strategy.”

In the meantime, the bank is putting in place elements that commercial banks in SVG offer, such as automated clearing house (ACH), which allows customers to move money from one financial institution to another, both domestically and within the Organisation of Eastern Caribbean States (OECS).

St. Vincent Co-operative Bank also has smart ATMs, which automatically count cash and deposit it into customers’ accounts.

The bank has also moved to online banking, allowing its customers to pay utility bills and move money between accounts.

“And as soon as we have ACH, you’ll be able to move to the other institutions here,” Ballantyne said, adding that this will also provide debit card services.

The bank is also looking into transacting in foreign exchange, for which it would need a full commercial bank license

“So really and truly, what do we compete on: speed, flexibility and service excellence. That’s what differentiates us from other banks,” Ballantyne told iWitness News.

He said St. Vincent Co-operative Bank is one of the few banks where a human being answers the phone.

“… all financial services are about relationships, and at St. Vincent Co-operative Bank, we prioritise relationship banking, we prioritise having access to personnel who can help you.

“Ultimately St. Vincent Co-operative Bank is a place where you can call and speak to someone, where we respond to your needs and where we would find financial solutions to help you achieve your dreams.”

‘digital transformation is a key strategic imperative’

As the bank looks towards its centenary, Ballantyne noted that in the digital age, transactions are increasingly being done from people’s small devices.

“So digital transformation is a key strategic imperative of St. Vincent Co-operative Bank, … Otherwise, you would end up being left behind just simply doing savings and loans as we’re doing now.

He said people would like to be able to move money between accounts locally, across the region and internationally, to be able to pay vendors and transfer money to relatives and friends.

He said someone living in the United States might have a mortgage in SVG and would like to be able to earn money in one jurisdiction and seamlessly use it to satisfy their financial obligations in another.

“So, we have to embrace digital transformation, because without it, without adjusting and adapting to the changing financial landscape, we will be excluded from the financial system.”

Ballantyne said St. Vincent Co-operative Bank also has to pay attention to the fact that big banks are consolidating and buying up all the smaller banks.

“… it’s going to be very difficult for standalone, small institutions to compete, particularly with regard to interest rates, because we simply do not have the economies of scale to have a lower cost of funds.”

In the face of this, a strategic imperative for St. Vincent Co-operative Bank is to either become fully commercial and compete with the bigger banks or to be consolidated.

“So, these are issues, these are strategic imperatives we’re looking at: commercialisation, digital transformation. Whether or not we commercialise, we need to be involved in digital banking, the use of electronic currencies such as D-Cash and cryptocurrencies and so forth,” Ballantyne said.

The chairman said the bank had not prioritised risk management but is now the only bank in SVG with a formal enterprise risk management framework.

“Change is constant. It’s inescapable. And if an institution, whether it’s a banking institution or otherwise, does not adapt to the changing landscape, they become obsolete,” Ballantyne told iWitness News.

“And after 80 years of survival and not becoming obsolete, you can be guaranteed that the Board of Directors of St. Vincent Co-operative Bank will pursue every strategy and every tactic to ensure that this institution continues going forward for another 80 years, whether it’s as a standalone entity having achieved a commercial license, or as an entity that is merged with another entity, or an entity where investors come in and put in capital to enable it to transform to offer digital services, wire transfers, automated clearing house, smart machines, dealing with digital currencies and so forth.”