A conversation with Jacqueline Sharp

BY AVIA COLLINDER Business reporter collindera@jamaicaobserver.com

Thursday, July 14, 2016

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On a sunny morning with the grey-blue waters of the Caribbean sea embracing the Kingston Harbour nine floors below her Port Royal Street Office, Jacqueline Sharp, president and CEO Scotia Group Jamaica and new head of the Caribbean North and Central is exuding focus.

Sharp, conversing with the Jamaica Observer about the road ahead, is expressing confidence in her leadership team and optimism about improving share of wallet.

The banker’s expanded portfolio includes overseeing the operations of The Bahamas, Cayman Islands, Turks & Caicos, and the British Virgin Islands. She previously had oversight responsibility for Belize and Haiti, which will remain part of her responsibility.

Now in charge of seven markets, Sharp says she sees a future in which technology is reshaping the way financial services are offered. For Jamaica, she is hoping for a revised taxation regime under which financial houses will be better able to provide credit and also invest in new platforms for growth.

How have you restructured your days in order to facilitate oversight of four additional markets?

JS: I have been spending some time getting up to speed. We have excellent leadership in terms of district and country heads. Sean Albert has been leading North for the last two years. When you have great talent it makes a difference. I am leveraging the talent.

My oversight role is to support where I can. There has been a lot more travel, especially for board meetings and to visit islands for discussion with management teams.

The North territories are more off shore banking centres and many of those institutions have been coming under increased pressure recently surrounding concerns of tax evasion. The North also has higher per capita income in those territories.

The markets represent just over $14 billion on balance sheet as well as off balance sheet. We have just over one million clients across seven countries. Jamaica represents one third of assets and 80 per cent of the customers.

There are, actually, a lot more similarities than there are differences [between countries]. It is a region experiencing slow growth. They are all very dependent on tourism and remittances as economic drivers.

In the new North markets, Bahamas in particular has a relatively high non-performing portfolio coming from the 2008 recession, so delinquency management is critical there.

In terms of new opportunities, there are opportunities for us to grow our wealth portfolio (RBC closed their wealth arm).

Why go where others fear to tread?

JS: Scotiabank has strong brand presence and a long history. We have been able to withstand economic cycles. the most recent of which was the financial crises in Jamaica because of our prudent management. Our customers recognise that.

[The financial house, headquartered in Canada and utilising its international banking network, has been able to take up the slack created in some Caribbean countries by the departure of correspondent banks.

We have strong relationships with our correspondent banks, strong controls in the management of our AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism), robust infrastructure and our correspondent banks are comfortable with the way we operate.

Can you share with us medium-term goals for the markets in your portfolio?

JS: These goals are the enhancement of the customer experience through optimising delivery channels and faster processing/turnaround times.

Our aim is also to leverage Scotiabank’s global relationships to drive volumes. Another objective is to achieve operational efficiency. Others are the management of credit delinquency and building leadership capacity.

Group-wide, a lot of what our region has to do is with making it much easier to do banking, making it more convenient for customers in terms of the turnaround time for securing a mortgage, credit card, getting their loan faster, opening an account faster…We are leveraging local and global relationships to grow our business. We have a common platform which can be used by companies across the region in setting up in another market. We are leveraging our regional presence and global brand to create growth.

We are constantly reorganising and looking for opportunities and looking at areas where we need to build out and expand.

In Jamaica we restructured our contact centre. Another area is agent banking, putting Scotiabank in high-traffic areas. More locations and extended opening hours have started in Megamart. We have another coming in Portmore and we are planning another location in another month.

What skill set has been most useful in your role as organisation head to date?

JS: It would have to be my ability to interact at all levels, with all members of staff. I think it’s very important to make the time to connect with your team, to hear their views, understand their issues and concerns, and to hear their ideas and suggestions so we can all work together to build a better bank. This develops trust and goodwill.

I think humility is also a very important trait of a successful leader when connecting with the people that you are trying to lead or influence or motivate – it’s extremely important. As a leader I best influence change when I am trusted. In the good times I celebrate their work and inspire that they keep going. At all times I try to remain honest, but encouraging no matter what is happening.

What is your strategy for creating change?

JS: That is a very relevant question. We continue to face a very rapidly changing climate in our industry. We are facing competition from not only traditional but non-traditional companies. We have to be open to change and constantly change business models to remain relevant.

My strategy for communicating change is to communicate the why; talk about what’s changing in the environment and the burning need for change. I communicate this to executives who are themselves very driven and very committed. They also have to communicate. We spend a lot of time on that communication process.

We have a highly competent management team who keep me abreast of situations. Personally, I prefer that people just keep me informed about their areas; however, in instances where there may be challenges, I appreciate a more consultative approach so we can brainstorm and discuss solutions together.

What would you say are your main achievements since taking the helm at Scotia Group Jamaica?

JS: In the last three years there has been more change at Scotiabank than there has been in a very long time, both locally and globally. Leading through that change has been a good opportunity. We continue to face rising costs and the need to continually invest in technology to meet the change demands of customers, so it’s very important to build a sustainable platform.

Our quarter two results were decent; we have reported growth of 29 per cent ($1.13 billion) for the six months ended April 30, 2016. Our productivity ratio has improved year over year and we are proud that our productivity ratio year to date is 60.58 per cent, compared to 66.35 per cent in 2015.

We have maintained market share in retail. On the commercial side, we are looking for opportunities to grow. There are some great opportunities. We are holding our own in terms of market share and we are continuing to focus on growing the share of wallet among the clients we have. It’s a very large and diverse customer base which is loyal. We understand their needs and how they operate; we need to now leverage that more to cross-sell the other side of our business – wealth and insurance.

We have been preparing the organisation for the kind of changes that will be coming at us as technology changes the way people do banking and financial transactions.

Leading through the restructuring to make us a leaner, more efficient, more sustainable organisation — this was very difficult because it meant things like branch closures, cutting back on staff complement and committed team members who have contributed significantly to the development of the organisation. But our responsibility is to create a sustainable organisation and to ensure we have the capacity to invest in new products and service innovation that our customers are looking for.

Fourthly, we have been preparing the organisation, getting them in shape for the kind of changes that will be coming at us as technology changes the way we do banking and the way people do transactions.

Scotia has also made inroads in customer education, helping them to be more efficient and helping them to be financially better off. Because of that increased education, we have seen an improvement in our Customer Loyalty Index — at the last analysis it was 62.8 per cent, down from 63.1 per cent. When compared to our counterparts, it is one of the highest.

We have also communicated to them the importance of maintaining good credit scores. We have also managed to do quite a bit of re-educating the public on the numerous alternate banking options that exist. Consistent education on the alternate channels offered through online, mobile and the ATM. This includes having designated team members demonstrate and assist customers in the branches.

The Express Banking Kiosk at Megamart was a first and we are now preparing to roll out others.

We have placed a lot more focus on developing the SME sector with specialised loan programmes, some in partnership with the DBJ (Development Bank of Jamaica); organisation of mentorship programmes; business and marketing plan writing; bookkeeping skills and cash flow management.

The Scotiabank Chair of Entrepreneurship at UTech (University of Technology, Jamaica) since 2008 through which we conducted a groundbreaking two-year research project known as SERMAF, which examined increased access to finance for SMEs using a psychometric-based innovative risk management and risk-rating measure.

Scotiabank Vision Achiever Programme, providing business coaching and training for 25 entities. The sessions are led by ActionCOACH Marcia Woon Choy. Last year all participants demonstrated increase in profits, with one company (Copy Cat) earning 50 per cent more based on the techniques learned on the programme.

Overall, the entire group created 40 additional new jobs because of how Vision Achiever helped them structure their business.

Is new talent being injected in Scotia Investments and why?

JS: We are evolving our business model and are moving away from repo, which has higher capital requirements to a business model, which is more asset management based, including unit trusts and mutual funds. We are reducing one side and expanding another, and as we do that we will look to downsizing in some areas while we grow another.

For some time now our strategy has been to focus more on building our asset management and brokerage business. Simultaneously we have been building the capacity and talent within our team in keeping with this strategic focus.

We already have a competent team, a team of qualified and experienced people in this area who know and understand the direction of our business.

As the business grows, wherever we see the need we will add capacity as required. One such is Scotia’s Contact Centre in Jamaica, which now serves customers in 18 countries across the English-speaking Caribbean region. It forms a part of Scotiabank’s integrated channel strategy focusing on delivering outstanding customer experiences and first-call resolution, creating capacity in branches and executing sales and service activities to strengthen customer relationships and engagement.

What are the economic indicators, since the 2008 financial crash, which might affect growth?

JS: In relation to the Jamaican economy, we are seeing a move in the right direction. In the past two years we have observed modest upward growth — though this level of growth in the economy remains below pre-crisis levels. While some economic sectors have shown notable recovery, we continue to see a relatively weaker outturn in some larger sectors, such as distribution, transport and financial services.

The performance of the financial sector, in particular, continues to lag the performance of the overall economy, having been impacted by two debt restructurings within the last five years, and other influences such as the imposition of asset taxes and tight liquidity conditions.

Despite this, we here at Scotiabank are encouraged by the positive signs emerging in the economy. We continue to see effort on the part of our authorities to implement growth-inducing policies. For example, (i) over the last few years we have undergone significant fiscal reform as effected by an IMF (International Monetary Fund) agreement and (ii) the creation of employment through the introduction of new sectors, ICT/BPO sector.

What are the unique challenges facing the group?

JS: The greatest is the cost of doing business. Financial institutions have an almost 50 per cent tax rate — income tax, asset tax based on total assets instead of a flat rate and non-recoverable GCT. Finance houses also cannot benefit from the employment incentive tax rebate. This is the highest effective tax rate which is a real cost. It inhibits our ability to invest in new technology and innovations for customers, and the cost of doing business is extremely high.

Another of our biggest challenges has been keeping up with the increasing regulatory environment. It’s becoming very challenging for banks to be able to comply with all the new requirements coming out. They are very costly initiatives.


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