Bank South Pacific's Customer Service - From Bad to Worse?
Patrick Nomos | 11/3/2021
Bank South Pacific (BSP) customers in Papua New Guinea (PNG) all have their personal stories attesting to the poor service delivery of PNG's largest retail bank. My personal experiences, as a long-time BSP customer, include regularly waiting in line for over two hours to make a simple deposit, paying an exorbitant two per cent service fee for cheque, cash or EFTPOS withdrawals whose value is greater than PGK5,000 and paying an annual fee of PGK100 for the privilege of using a BSP Visa debit card account, when the physical card was never delivered to me from the central BSP branch in Port Moresby.
Part of the reason for BSP's sub-standard customer service may be linked to its expansion into the Pacific region and beyond, that has resulted in a dilution of experienced staff members in PNG branches. The newly trained, inexperienced staff in these branches are struggling to deliver quality banking services to BSP's customers, sometimes taking thirty minutes or more to serve a single customer.
Since 2004, BSP has pursued an aggressive strategy of expansion in the South Pacific, starting with its acquisition of Westpac Bank's operations in Niue that it sold in 2013 to New Zealand's Kiwibank. In 2006, BSP purchased the small Fijian lender, Habib Bank (Fiji), that was followed in 2007 by its purchase of the National Bank of Solomon Islands from the Solomon Islands Government and its 2009 purchase of the Colonial National Bank, Fiji from the Commonwealth Bank of Australia. In January 2015, BSP announced that it had entered into an agreement with Westpac Bank to buy Westpac's banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu and Tonga for AUD125 million. The final stage of this acquisition was completed in July 2016.
In addition to its growing retail banking presence in the South Pacific, BSP has also been expanding its finance arm, BSP Finance, that now operates in PNG, Fiji, Solomon Islands and Cambodia. BSP Finance (Cambodia) Plc, launched in January 2018, provides hire-to-purchase, lease-to-own and operating lease services in the Mekong Region of South-East Asia.
Image: Artist's impression of BSP's head office, Port Moresby, Papua New Guinea.
(Photo - BSP branch withdrawals queue)
Another possible reason for BSP's poor customer service is the decreasing level of competition between PNG's surviving retail banks. The mid-2018 sale by ANZ Bank of its commercial and retail banking operations in PNG to Kina Bank has resulted in only three commercial banks operating in the country - BSP, Westpac and Kina (formerly Maybank), that is owned by the Malaysian Chinese conglomerate, Rimbunan Hijau.
The Australian Broadcasting Corporation (ABC) reported on 9/2/2021 that there is growing resistance within PNG to the recent decision by Westpac to sell its PNG operations to Kina Bank for AUD420 million. Westpac's stakeholders argue that the reduction of competition in PNG's banking sector to only two banks is dangerous, because reduced competition may result in less incentive for the remaining two banks to offer their customers lower prices, higher quality services and greater innovation.