FOR many Jamaicans, banking comes with a familiar frustration: There are several banks to choose from, but not always enough real choices.

You can open an account, compare fees, or apply somewhere else. But when the decision is big — a mortgage, business loan, car loan, or debt refinancing — the market can still feel smaller than it looks.

So, are Jamaicans getting a fair deal from banks?

The answer, based on a new Fair Trading Commission study, is not a simple yes or no.

The study, An Empirical Assessment of Competition in Jamaica’s Commercial Banking Sector (2000–2024), prepared by FTC Competition Analyst Carlton Thomas, found that Jamaica’s banking sector has become more competitive over the last 25 years. But it also found that the market remains dominated by a few large institutions.

National Commercial Bank Jamaica Limited (NCB) and Scotiabank Jamaica remained the two constant giants of the sector, while assets, loans and deposits all remained highly concentrated.

The study describes Jamaica’s commercial banking sector as “a concentrated industry in motion” — changing, but still shaped by the strength of established players.

For customers, that is the central point: the market has improved, but it has not opened up as much as the number of banks may suggest. The real issue is not only how many banks exist, but whether Jamaicans can easily use that choice to get better rates, lower fees, faster credit, clearer terms and more bargaining power.

More choice, same big players

The grip of the largest banks has weakened since 2000, but not disappeared.

In 2000, the top three commercial banks controlled 88.7 per cent of total assets, 91.1 per cent of loans, and 87.7 per cent of deposits. By 2024, those shares had fallen to 71.3 per cent of assets, 68 per cent of loans, and 69.7 per cent of deposits.

That is real progress. Still, even after 25 years of new entrants, acquisitions, and market changes, the three largest banks continued to control more than two-thirds of assets, loans, and deposits.

For most of the period covered by the study, NCB and Scotiabank Jamaica remained the two central players. The third major player shifted over time — from RBC Royal Bank Jamaica in the earlier years, to Sagicor Bank Jamaica after Sagicor acquired RBC’s Jamaican banking operations, and then to JN Bank after it became a commercial bank in 2017.

By 2024, the three largest banks by share of assets were NCB, Scotiabank Jamaica, and JN Bank.

The market has also had more players. Jamaica had six commercial banks in 2000 and eight by 2024, though the number moved up and down along the way because of mergers and acquisitions. The entry of PanCaribbean as a commercial bank, later becoming Sagicor Bank, followed by JN Bank and JMMB Bank as commercial banks in 2017, helped reduce concentration and gave customers more options.

But more banks do not automatically mean the power is evenly spread.

The study uses the Herfindahl-Hirschman Index, or HHI, to measure concentration. The higher the number, the more concentrated the market. The study treats anything above 1,800 as “highly concentrated”.

By that measure, Jamaica’s commercial banking sector remained highly concentrated across assets, loans, and deposits every year from 2000 to 2024.

Large banks still have advantages that are difficult to match. They have bigger balance sheets, stronger brands, wider branch networks, deeper customer relationships, more data, and greater lending capacity. New entrants have made the market better, but they have not erased the power of the biggest players.

What the study does not say

The FTC study does not conclude that Jamaican banks are overcharging customers. It does not find that banks are acting illegally, and it does not prove that borrowers or savers are being directly harmed.

It shows that even in a market that has become more competitive, the structure of banking still gives large institutions significant advantages. Those advantages can affect how easily customers compare products, switch banks, refinance loans or negotiate better terms.

Why real choice is harder than it looks

For customers, competition is not felt in a table. It is felt when they try to get a better deal.

That is where banking becomes complicated.

A customer may have several banks to choose from but still feel tied to the institution that handles their salary, bill payments, online banking, debit card, and loan history. A small business may know another bank is offering better terms, but hesitate to move because its overdraft, payroll, card services, and daily transactions are already tied to one institution.

Changing lenders can be harder still. A homeowner trying to refinance a mortgage may face new valuations, legal fees, insurance documents, income checks, and weeks of uncertainty. A business owner seeking credit may need collateral, financial statements, and guarantees before another bank will even make a serious offer.

That is why the number of banks is only part of the story. The bigger question is whether customers can use that choice easily enough to make banks compete harder for them.

A market can look more competitive than it used to while still leaving many customers with limited practical power.

Why borrowers should still shop around

The study’s year-by-year data show that competition varies across different parts of banking. The FTC says the loans market is the most concentrated of the three areas examined, while deposits showed the lowest concentration.

That matters because borrowing is where many customers feel bank power most directly. People judge the banking system by whether they can get a reasonable mortgage, whether small businesses can access credit, whether rates and fees are clear, and whether refinancing is practical.

A more competitive banking market should make it easier for people to compare offers, negotiate terms, refinance debt, and walk away from a poor deal.

That means people seeking mortgages, car loans, personal loans, or business financing should not assume the first offer is the best one available. They should ask banks to explain the effective interest rate, not just the advertised rate, and compare fees, insurance costs, processing charges, early repayment penalties, and refinancing terms.

Savers should compare too — not only interest rates, but fees, service quality, and digital convenience.

Banks compete, but not fully

One of the more technical parts of the FTC study suggests that Jamaican banks behave competitively in some ways.

The study looks at how banks respond when their costs change, including the cost of deposits, labour and capital. It finds that bank revenues tend to move in a way that looks more competitive than the market’s concentrated structure might suggest.

In plain language, banks do respond to pressure.

But that finding has limits. The study says the sector is “competitive in conduct”, but still constrained by “structural frictions, barriers to entry, and enduring incumbent market power.”

The COVID-19 pandemic also showed that competition can weaken under stress. During the pandemic, the study found a “reduction in competitive intensity” compared with normal conditions.

That matters because customers are often most vulnerable during shocks. Households may need debt relief, businesses may need working capital, and borrowers may need flexibility. If competition weakens during difficult periods, regulators need to understand what that means for people who depend on banks.

The study’s message is not that Jamaicans have no banking choice. It is that choice is only meaningful when customers can use it.

A market with eight banks can still feel narrow if switching is costly, refinancing is slow, fees are hard to compare, and the biggest institutions retain most of the lending, deposits and customer relationships.

For borrowers, savers and small businesses, the practical lesson is clear: do not treat the first offer as the only offer. Compare the full cost, ask harder questions, and use whatever competition exists.

For regulators, the challenge is just as clear: competition should not be measured only by how many banks operate in the market, but by how much power customers actually have.