– as Demerara Bank opens $485M branch at Leonora
As Guyana continues its unprecedented developmental trajectory, President Dr Irfaan Ali said the country needs to prepare the framework to operate in the “new world” of doing business, and one such area he highlighted that has to be modernised locally is the financial sector.
“We have to modernise our financial architecture and our financial system, upgrade our regulatory framework and strengthen institutions to provide the support for this. And that is what we have to get ahead of in dealing with financial services because you can have persons with deposits above a certain level, earning even more than their salaries through investment vehicles. And that is the conversation I think the Minister of Finance [Dr Ashni Singh] have soon because we have to modernise and improve the regulations, modernise the legislation and then strengthen the institutions while we work on building the capacity,” the Head of State noted.
President Ali was at the time speaking at the opening of a new Demerara Bank Limited branch, which was built to the tune of $485 million, on Friday at Leonora, West Coast Demerara (WCD). He pointed out that at a time when the banking sector is transitioning into a faceless service, these new buildings still hold importance with regards to modernising the financial sector.
“Two to five years from now, these buildings will be converted into back offices… you will have faceless banks but you will have people in there doing the important back-office jobs… This building will be providing more jobs because we will create the infrastructure for nearshoring and financial services,” he noted.
According to the President, the Government is hoping to make Guyana a major hub for financial services by modernising the financial sector here. In the future when the cost of data and electricity are significantly reduced in the country, local companies could branch out into providing tax services for other countries. The Head of State noted that the Government is already preparing the skills for this.
“This is where the revenue from oil and gas will go, certifying our young people for higher paying jobs. So, they will be certified brokers, certified public accountants, charted accountants, chartered auditors, certified management specialists, and those jobs will migrate into buildings like these – providing a service for North America, for the rest of the Region and data is the concept of nearshoring jobs,” he noted.
Only recently, the Head of State announced an initiative that will see the Guyana Government working with Canada to train 2000 young Guyanese next year to take up high-paying jobs here.
New technology
Meanwhile, Chief Executive Officer of Demerara Bank, Pravinchandra Dave also revealed plans by the financial institution to shift towards a more technological-based operation.
“We want to improve the banking facility and we also want to promote the easiest access to our banking to each and everyone. For that, what we have to do is we’re trying to have four things in line: we want to have chequeless banking; cashless banking; paperless banking, and faceless banking,” he noted.
Dave, who is set to retire after serving at the bank for over 20 years, noted that they are now trying to introduce a money transfer facility for Guyanese who are living abroad, at a low service charge.
“We are also trying to introduce a new technology which will be announced next year and that technology would see [significant] changes in the banking facilities in Guyana,” the outgoing bank CEO stated.
Chairman of Demerara Bank Limited, Komal Samaroo further added, “We are embarking on the utilisation of cutting-edge technology, which will enhance the customer experience in terms of speed, convenience and efficiency, and transforming the banking sector in Guyana – moving in line with what obtains in the developed world.”
“Following an agreement and the preparatory work in 2023, next year we’ll be using one of the world’s leading technology company online platforms, introduced in a very significant way… Most of your services you will be able to do online.”
In recent years, Demerara Bank has been working closely with the Guyana Government to provide low-interest loans to stakeholders in several sectors across Guyana – something which President Ali recognised during Friday’s commissioning ceremony.
As of November 2023, private sector credit grew by 13.7 per cent when compared to the previous year. Similarly, deposits were 15.1 per cent higher at the end of November 2023, standing now at almost $769 billion. Of this amount, 77.9 per cent was deposited by the private sector while deposits from residents grew by 22 per cent.
In the last 3 years, profits in the banking sector increased from $9.9 billion to $19.8 billion, reflecting a more than a hundred per cent growth.
“What we need to do now is to have a conversation with the banks because this growth is going to continue to expand as to how we plough back and reinvest these profits into the system to continue the expansion and diversification of the economy,” the Head of State noted.
According to President Ali, there are a lot of idle finances out there such as in co-op societies and pension funds. This, he noted, is where the ‘back-offices’ will have to focus on utilising the monies.
“We have to take an approach as to how we will continue to increase personal income and disposal wealth… We gotta move this concept to investment bankers… We can capitalise that money in public financing too… [But] we have to get innovative on the financing and that is what these back-offices will have to start doing,” the Guyanese leader posited.
