Bank of Valletta ushering in major shift from cash to electronic banking

Bank of Valletta has engaged UK consultants AJ Belt Consultants to assist in the bank’s transformation strategy to create a lower risk profile and invest in technological innovation.

At a rate of €1,750 daily and €250 allowance, BOV’s engagement of Alan Belt replaces former consultants Promontory for its ambitious transformation strategy.

Belt, of Hertfordshire, UK, is a specialist in change and transformation for retail banking, with expertise in the increasingly complex risk and control frameworks for anti-money laundering obligations. Belt has worked at several banks, including TSB, Al Rayan, and First Abu Dhabi Bank.

CEO Rick Hunkin said in the bank’s annual report that technological innovation across most business lines, and steep regulatory demands for systemic banks such as Bank of Valletta, are changing the traditional banking landscape. “We must not only accept these changes but use them as catalysts for a major shift from the use of cash and cheques to the use of electronic banking channels.”

He is also driving the intensive transformation to make BOV a more efficient, more digital and more customer-oriented bank. “We have set up a multi-skilled strategy implementation team tasked with co-ordinating the multiple work streams within the extensive programme of initiatives that will be undertaken. The first wave is being implemented and further projects will be embarked upon as the recruitment process in the new organisational structure is finalised.”

Bank of Valletta has told MaltaToday the fees charged by Alan Belt are commensurate with the fees that such local and international consultants charge in line with their area of specialisation. “Such consultancy agreements are bound by agreed deliverables and are only entered into following a detailed selection process which is governed by the Bank’s procurement process and approval levels. Any significant contract also requires board approval which has been properly sought and obtained in all cases.”

It said consultancies of this nature cease to be required upon successful delivery of their contractual obligations. “The Bank also uses consultants to train its internal personnel and transfer knowledge as part of its re-skilling programme.”

Hunkin outlined ambitious changes for BOV, saying customers are increasingly expecting straight-forward, contactless, digital banking services available round the clock and with multi-channel access.

“We have set up a Digital Factory, bringing together our Business and IT arms to leverage best-of-breed technology and provide straight-forward, efficient banking services to our customers. We are also working to significantly reduce customer reliance on basic ‘in-branch’ transactions to afford more time to properly developing customer relationships. These initiatives will improve the customer journey, across all banking channels and portfolio of services.”

CEO Rick Hunkin will be paid a total of €459,000 in salaries and bonus, according to BOV’s new remuneration policy for top executives.

Hunkin’s first full year as BOV CEO coincided with the start of the COVID-19 pandemic, which saw BOV pre-tax profits fall to €15.2 million, and no dividends announced.

Banking regulators are not recommending the distribution of dividends, so as to ensure that BOV can meet the high demand on capital and support the Maltese economy till the end of the pandemic. The most negative impact on the bank’s bottom line was a €39.8 million increase non-performing loans (NPLs) on aged non-performing debtors and €38.1 million in provisions related to COVID-19.