Editorial | The straw that broke the camel’s back

HSBC Bank’s decision last year to introduce contactless cards was more than welcome, albeit three years late when compared to other retail banks operating in Malta.

The bank started distributing new contactless cards a couple of months ago in preparation for the changeover that had to happen between the 5 and 7 February.

Clients thought the protracted process adopted by the bank was to ensure a seamless transition to the new system when this was switched on in February 2022.

However, the changeover has been anything but seamless, leaving many clients, including businesses, unable to access their funds, make payments or carry out transactions.

To top it all, not all cards have been replaced with contactless versions, leaving customers unable to make use of the new system.

From a global bank that has been harping on its shift towards a digital environment, while shutting down branches, one would have expected much better.

It is already ridiculous that HSBC only embraced contactless cards now, given that these have been a mainstay at Bank of Valletta, APS and BNF before the pandemic struck in 2020.

Bungling the changeover just made matters worse, not only for HSBC but also for the banking sector as a whole.

Complaints against banks have been mounting over the past few years from various quarters on the charges and fees levied for services offered.

From credit card fees to minimum balance charges, from cheque encashment charges to limits on the minimum amounts that can be withdrawn from branches, retail banks have been battering customers.

The justification has always been that they are adhering to more onerous anti-money laundering rules, modernising services and adapting to customer trends by emphasising online systems.

While AML obligations have increased as a result of global arrangements intended to combat financial crime, Maltese banks have taken the matter to the extreme.

It makes little sense to treat a pensioner whose only income is his pension the same way as a businessperson with multiple sources of income.

And even if banks feel that strict rules should be applied across the board irrespective of who the client is, they should ensure processes are as seamless as possible for everyone.

Retail banks are today competing with online based payment apps that are not only easy to use but also make it customer-friendly to provide the necessary documentation required for regulatory purposes.

Online and mobile app offerings by domestic retail banks have to improve and become more client-friendly.

Within this complex context, greylisting of Malta by the Financial Action Task Force has done little to help the situation.

Although the tangible impact of greylisting on the economy has been negligible to date, it has put strain on the financial services sector, including banks.

More questions are asked when Maltese firms deal with foreign jurisdictions and this only serves to complicate matters.

Banks themselves face problems from enhanced scrutiny but it is unfair for them to shift this additional burden on their customers.

This scenario is the pretext for the widespread backlash HSBC has faced over its botched contactless changeover. It was the proverbial straw that broke the camel’s back.

An apology to customers and a gesture of goodwill would not be amiss.