BOJ reports progress in ABM standards amid Hurricane Beryl challenges
The new automated banking machine (ABM) standards are already positively impacting network resilience, Bank of Jamaica (BOJ) reported in an update addressing machine downtime and cash availability four months after the release of the service-level standards. However, much of that progress was tested by the recent passage of Hurricane Beryl.
“So far, what we have seen is that there are 20 more ABMs available across the island compared to April. The availability of ABMs by banks has increased from 90 per cent to 94 per cent as of June. Of course, that availability was impacted by Hurricane Beryl, so we have to understand that there would have been some deterioration during that month, which would have been broadly unavoidable,” Dr Jide Lewis, deputy governor of financial institutions supervisory division at the BOJ, said during the quarterly press conference last Wednesday.
As at June 2024, there were a total of 850 ABMs operational out of a total of 897 across the island.
The central bank reported that despite the disruptions caused by Hurricane Beryl, the new ABM standards have contributed to a more resilient network. The Category 4 storm, which brought heavy rains and widespread power outages across several parishes, caused temporary service interruptions at some ABM locations. However, with new maintenance and monitoring protocols, financial institutions were able to restore services more quickly than in past events.
Dr Lewis noted improvements in uptime; however, it still falls short of the minimum standard required for deposit-taking institutions.
“In terms of recovery time, it has gone from 5.5 hours to 3 hours, still not down to the one hour that we are requiring for urban areas and three hours for rural areas, but it’s heading in the right direction,” Dr Lewis said.
The improved resilience of the ABM network during Beryl is largely attributed to the enhanced security and maintenance protocols introduced under the new standards. These measures included the installation of more robust backup power systems and improved network redundancy, which helped mitigate the effects of power outages and communication disruptions.
The BOJ’s new service-level standards were issued on April 2 and DTIs have a nine-month transition period to bring themselves into conformity with the guidelines, given its far-reaching nature.
These standards introduced several key requirements, including the adherence to stricter maintenance schedules to ensure machines remain in optimal working condition and minimise downtime; the installation of advanced fraud detection systems and encryption technology to safeguard against unauthorised access and fraud, regular software updates and backup power systems and standardised user interfaces which calls for uniformity in user interfaces across all ABMs to enhance usability and accessibility for all customers.
While failure to implement these standards will not result in monetary fines, banks could face enhanced scrutiny from the BOJ. Eventually, banks will also be required to adhere to supporting legislation under the developing Twin Peaks system of financial sector regulation. This model will see the BOJ supervising banks and non-bank financial institutions for prudential matters while the Financial Services Commission (FSC) will focus on market conduct and consumer protection. Implementation is expected in 2026.
“In the grand scheme of things, I understand that members of the public may still be dissatisfied with the level of service because it has not yet met the standards we have set. However, we are still in the transitional period. I encourage anyone facing challenges to write to us at customer.complaints@boj.org.jm, specifying the areas where they are experiencing issues, and we will closely examine those specific complaints,” Dr Lewis said.