MLA welcomes bank action two years after PMM

| 07/05/2018 | 36 Comments

(CNS): Two years after his private member’s motion was passed in the Legislative Assembly calling for an electronic clearing partnership among the local retail banks, the bankers association revealed recently that Cayman’s six retail banks have finally managed to launch an Automated Clearing House. Deputy Opposition Leader Alva Suckoo (Newlands) welcomed the news, which will see cheques from other banks cleared in hours rather than days and pave the way for more electronic banking services. 

“I am extremely pleased that my motion and the subsequent unanimous support of my colleagues in the Legislative Assembly encouraged the banks to get this done,” Suckoo said at the weekend. Noting that the solution had been talked about with little progress for over 15 years, he said, “The potential benefits to our local economy, businesses and individuals — and to our global competitiveness — are tremendous, and I am glad to see the system is now being introduced.”

During the parliamentary debate a the time Suckoo warned that Cayman’s high street banks could be benefiting from the “float” created by holding customers’ funds in suspense for such long periods. He suggested that potentially the bankers were making short investments with their customers’ money and earning interest for themselves.

The introduction of this clearing house should pave the way for transactions between merchants and customers without depending on third-party gateways located overseas. Suckoo had argued at the time that a local clearing house was a necessary ingredient in the development of more robust and creative e-commerce solutions.

Suckoo also said that he hopes the banks will not see this development as an opportunity to introduce new or increased fees. He said the technology employed in the ACH process will reduce their operating costs and increase efficiency.

“We have to ensure that businesses benefit and embrace the technology, and the way to do that is for the banks to absorb the cost of the clearing house without passing it on to their customers,” Suckoo said. “This will attract new customers and increase the number of transactions among them, resulting in increased business for the banks. I see no need to introduce or increase fees.”

On its website, the Cayman Islands Bankers Association said the ACH is jointly owned by six class A retail banks: Butterfield Bank (Cayman) Limited, Cayman National Bank Ltd., CIBC FirstCaribbean International Bank (Cayman) Limited, Fidelity Bank (Cayman) Limited, RBC Royal Bank (Cayman) Limited and Scotiabank & Trust (Cayman) Limited.

“The CIACH is designed to clear and settle electronic transactions and provide a secure, cost-efficient exchange and settlement mechanism for domestic payments in KYD and USD currencies that adheres to international standards,” the CIBA stated.

The group of local retail banks worked with Aperta Active Clearing System to deliver the new mechanism along with the Prism Services (Cayman) Ltd, a company created to implement the project with the banks. The old system of manually clearing cheques through banks swapping files has been replaced with a common system using international-standard secure file transfer protocol, allowing participants to monitor real time net settlement and collateral positions via a secure portal, Aperta explained in a press release.

This means a wide range of payments are now in place for clients to use. “Initial major benefits are likely to result in corporate clients automating bulk payments, such as salaries, and business-to-business payments. However, individual regular payments, such as those for utilities, mobile phone, and so on, will undoubtedly follow,” Aperta added.

Category: Local News

Comments (36)

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  1. Anonymous says:

    If Mr. Suckoo thinks that this development has anything to do with his motion then he is in La-La-Land. The cost of the paper system has finally made the banks move to overcome the increased volume.

    Note to Mr. Suckoo, this system will allow the banks to process more transactions without hiring more staff. Be careful what you wish/advocate for. Maybe even allow attrition to remove a few posts.

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    • Anonymous says:

      Thanks Troll

    • Anonymous says:

      Typical of a supporter of the current Government, sacrifice innovation and advancement using the excusent will kill jobs, meanwhile we keep granting permits for all those disappearing jobs ? Come on now that makes no sense. Jobs are increasing, the only issue is who the banks are hiring. There are more jobs than Caymanians so don’t worry when the teller jobs disappear we just need to scrap a few permits to correct the imbalance

  2. Anonymous says:

    Is it true there is a $4.00 charge to move funds from one local Bank to another?

  3. Anonymous says:

    Great, Now all you have to do is ask banks to become *banks* again to *help* people with banking, loans, and managing their money, instead of being gestapo-like international police, IRS auditors, private ownership spies, and confidentiality destroyers, and go back to actually serving the *people’s* interests instead of the world’s governments.

    Grow some balls basically.

  4. Anonymous says:

    But as of today the teller at the bank still can’t transfer money from my account there to my account in another bank. (Either use a draft, and pay-to-wait, or use cash and either way drive it down the road myself.) So the system has some work to do it seems.

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    • Anonymous says:

      Just another day in the whacky private sector.

      Typical private sector modus operandi, take forever to get things done and then have the nerve to complain about the government response times.

      Read the biller/paw report!

    • Anonymous says:

      Or online banking….

    • Anonymous says:

      If you went to a teller to do this then you deserve to be told not or that it would cost you 10/20 dollars. This system is so we can do payments/transfers OURSELVES at less cost.

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  5. Anonymous says:

    Yay said 2003, oh you’re not there yet said 2018.

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  6. Anonymous says:

    Only 10 years after Barbados and the Bahamas, so not too bad…..

  7. Anonymous says:

    What we need to know is when they will stop fleecing the public with the ridiculous 4 and 5 days to clear deposits involving local checks.

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  8. Anonymous says:

    This is fantastic. Great to see the Cayman Banking Industry forging ahead into the 20th Century.

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    • Anonymous says:

      They made Millions on the delays and still do, when will we have a government that makes a to-do list that really helps us FIRST?

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  9. Tut alors!. says:

    Excuse me but this annoucement from CIBA fails to mention the most important point- exactly what when will a customer get value when he pays a cheque from another local bank into his account?.

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    • Anonymous says:

      Phase 1 allows you to pay anyone at any bank through the respective online banking platforms, phase 2 will speed up the local cheque clearing and imaging exchange, I think it will be next day on the cheque clearance, and from what I understand phase 1 was put in first to encourage as many people to ditch cheques, which makes sense. If you are using cheques to move money between banks this process should eliminate that need, you would get same day on the transfer and no need to go to a bank…ps phase 2 is probably about 3/4 months away – best guess.

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    • Anon says:

      8:44 am — I think you are asking how soon will the transaction be settled? If that is what you are asking, it says at the end of paragraph one that transactions will be settled within a matter of hours rather than days — that is, if I lodge a check written on Royal Bank at Butterfield, within a few hours I should be able to have access to those funds.

      It used to be a royal pain, no pun intended, to have to go to Royal Bank (and government uses Royal Bank,not to pick on them, but many of us had then to either way or go to RBC) and have your check cashed — furnishing two means of identification — in order to get your money. So now I can skip that and deposit the check in my Butterfield account and within a few hours, voila, the funds are there for my use, rather than have to wait for four days — if I am lucky.

      Much, much relieved, I can tell you.

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      • Anonymous says:

        If true, this will be great but I’ll wait to see if it really works this way. Bankers are known to be far too greedy to give up even a penny if they can possibly extract it from their customers!

      • Anonymous says:

        An electronic transaction will be settled in a matter of hours. Not a paper transaction. So depositing your RBC cheque at Butterfield will still be the same. Govt should be looking to send you the funds electronically from their account at RBC to which ever bank. Getting them to stop issuing cheques may take some more time.

    • Anonymous says:

      There is/was no change to the clearing days. Do not write a cheque. Do not accept a cheque. Simply pay or be paid via electronic banking and the funds will move that day. No standing line. No filling out a form. No waiting for days.

  10. Anonymous says:

    Finally! Now bring down the ridiculous bank charges here to compare with the EU and then we will be talking.

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  11. Anonymous says:

    Hurry!

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  12. SSM345 says:

    About f**king time we joined the real world yet I cannot say I am looking forward to the increase in fees because of this.

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  13. Anonymous says:

    The objective of this system is really to stop writing cheques. Use the electronic payments instead to pay your bills regardless of which bank the vendor has an account at. Cheque writers pay more fees for the overall process regardless of how they are cleared.

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    • Anon says:

      Unfortunately, you and I may be able to stop paying bills with checks, but many businesses, especially government, do need to use checks for various reasons.

  14. Anonymous says:

    Good Job MLA Suckoo. Thank you for always identifying and attacking issues and creating real benefit for our Caymanian people!

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    • Anonymous says:

      Only a jealous PPM supporter would give this a thumb down. At least he is doing something for the country unlike the jokers I see in the Government and those that didn’t return last election.

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  15. Anonymous says:

    Somebody should tell him that gay people use cheques too.

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    • Anonymous says:

      What does Jesus use ?

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    • Anonymous says:

      which actually proves the point that not every person who doesn’t agree with homosexuality hates homosexuals. Also people who support keeping the definition of marriage as being between a man and woman do not automatically not support same sex unions. Same sex unions are possible without changing the definition of marriage…which is exactly what the UK has done. A change to the banking system that affects everyone regardless of sexual orientation actually negates your weak attempt at being controversial Bye troll

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    • Anonymous says:

      Well then they can continue to deposit their cheques and wait one/ two weeks for it to clear.

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