How Does BSP Make Banking More Affordable

BSP is often ccriticized for its fees but in fact, over the past few years, BSP has been making banking more affordable for its 1.4 million customers. How does BSP do this?

. By expanding its physical branch network across Papua New Guinea

. By reducing or eliminating service charges to its customers

. By expanding its electronic banking operations

After 58 years of operations in Papua New Guinea, BSP has expanded its branch and sub-branch network to over 44 branches and 44 sub branches, CEO of BSP Mr Robin Fleming said recently. "Having such a large physical presence, despite the high cost of maintenance, means that our customers don't have to travel as far when undertaking simple banking transactions. This can bring them enormous savings, for example, people from Buin in South Bougainville used to pay K150 return for a PMV to Buka to do their banking. Today because BSP operates a sub-branch at Buin, they no longer have to travel so far and the K150 that used to go into the pocket of the PMV operator now stays with the customer. Because BSP is local, people are not hiding their money under the mattress but can deposit their funds and get into a savings habit".

The same applies in remote locations such as Telefomin, Komo, Losuia and even Kerema where BSP now provides banking services as a part of its extensive branch network.

Mr Fleming said in some sub-branch locations such as Maprik, Higaturu and Kerema, BSP customers can also apply for unsecured Personal Loans from K1,000 to K50,000 through BSP's state-of-the-art lending system, LendFast. Approved borrowers can sign up for the loan and get the loan funded within the day rather than having to travel to Wewak, Popondetta or Port Moresby to do so. The interest rate on the BSP's unsecured Personal Loans was recently reduced by 5% pa.

In addition to the 44 branch and 44 sub-branches, BSP also has over 250 agents. Mr Fleming said "in the past when making a deposit at an agency, it may have taken a number of weeks before the funds were credited to the customer's account. Today, using BSP's award winning tablet computer technology, customers making a deposit at an Agency, will have the funds credited to their account immediately".

BSP has also removed fees from many of its products. "Our Plus Saver account which is designed to help our customers save for a future goal, is fee free and offers the attractive rate of interest of up to 2.5% to reward customers for their savings. Our Kids Savings Account and our Sumatin Account are also fee free products" Mr Fleming said.

BSP recently removed cheque processing fees on all its accounts in recognition of the introduction by the Bank of PNG of the Kina Automated Transfer system (KATs). The removal of these fees will save our customers millions of Kina.

Customers have the option of the "pay-as-you-use" Kundu Standard account or the "single-monthly-fee-account" the Kundu Packaged account for their daily banking needs. Mr Fleming explained, "If you don't frequently use your bank account, the Kundu Standard account may suit you best as you are not charged a monthly fee service charge and only pay when you use the account. If you frequently transact on your account however, using channels such as EFTPoS or ATM transactions, the Kundu Packaged account may be better as you only pay a single monthly fee and not transaction fees."

Mr Fleming said BSP had over a number of years, invested in the development of electronic banking technology so that our customers can access their money, pay bills, transfer funds between accounts or to 3rd parties, buy phone and electricity top-ups and check the balance of their accounts 24 hours a day, 7 days a week, 365 days a year.

"In reality, many of our most active customers never come into the bank because they undertake all their banking using Mobile Banking, EFTPoS at merchants, ATMs or Online Banking." Mr Fleming said. "Not only is it more convenient, it is also cheaper. For example, if a customer wanted to transfer money to a 3rd party, say a Retail outlet in another part of PNG, they could do this using Mobile Banking and pay a service charge of 50 toea, or they could come into the branch a complete a KATs transfer and pay K10."

Mr Fleming said that in 2014, BSP had processed over 30 million mobile banking transactions, 35 million ATM transactions, 20 million EFTPoS transactions and 13 million branch and sub-branch transactions.

In a closing comment, Mr Fleming reiterated that BSP is committed to assisting in the development of Papua New Guinea through the continued expansion of services across the country and through specific market segments such as SME and home ownership. "BSP has of course, recently introduced the First Home Ownership Loan product which offers approved First Home Owners a housing loan at 4% pa over a term of 40 years".