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MALTATODAY 13 October 2019

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18 maltatoday EXECUTIVE EDITOR Matthew Vella MANAGING EDITOR Saviour Balzan Letters to the Editor, MaltaToday, Vjal ir-Rihan, San Gwann SGN 9016 E-mail: dailynews@mediatoday.com.mt Letters must be concise, no pen names accepted, include full name and address maltatoday | SUNDAY • 13 OCTOBER 2019 14 October, 2009 PM mum on breach of ethics PRIME Minister Lawrence Gonzi has come out in full defence of his beleaguered Finance Minister this week, after revelations last Sun- day that Tonio Fenech had accepted an invi- tation to accompany businessmen Joe Gasan and George Fenech on the latter's private jet to watch an Arsenal match in Spain. In so doing, Fenech breached the Code of Ethics for Ministers on at least three counts: "No Minister should accept gifts or services such as might be deemed to create an obliga- tion, real or imaginary. The same rule applies to the spouse of a Minister and to his minor children." (Section 58) "Ministers occupy a position that makes them more than ordinarily open to undue pressures from persons who would like the Minister to use his position to gain some undue advantage for themselves. Ministers are duty bound to totally and immediately reject any attempt of this kind, but when the attempt is accompanied by the offer of some gift, whatever its value, the Minister should also report this to the Prime Minister without delay." (Section 59). The same code also specifies that when travelling, Ministers should inform the Prime Minister in writing beforehand, and submit a report of their trip upon their return. It transpires that Tonio Fenech, an avid Ar- senal fan, was accompanied on this trip by his young son and nephew, and that – contrary to initial reports – also by George Fenech himself, who is the owner of two casinos: the Oracle in Qawra, and the Portomaso casino in St Julian's. Lawrence Gonzi gave Fenech his full permis- sion to participate on a freebie flight – paid for by leading entrepreneurs, at last one of whom had (and still has) a direct interest in a sector the same finance minister was shortly to re- form – regardless of the conditions of the eth- ics code, which clearly prohibit such behaviour on the part of ministers. In an interview with The Times yesterday – widely perceived to be an exercise in damage limitation, following Sunday's revelations in MaltaToday – Tonio Fenech further revealed that this was only one of several such invita- tions sent to him via email by Mr Gasan, and "the only one he accepted". The timing of his 'one-off' acceptance is however bound to raise eyebrows. The Finance Minister chose to accompany George Fenech to Spain last April: just a month after Tonio Fenech himself had presented a yearly report to Cabinet, proposing a series of changes to the Lotteries and Gaming Act. The Finance Minister admitted this in his interview with The Times: "The reality is that these regulations have long been coming and Cabinet had rejected them a number of times. MaltaToday 10 years ago Quote of the Week Crossing the digital divide Editorial "I will respect member states in the choice of legislation and policy that regulate this matter" European Commissioner for Equality Helena Dalli on her support of female sexual and reproductive rights, and EU states' liberty to legislate on abortion NEWS that HSBC will be closing eight branches this year and the next did not come as a surprise for those who have been following develop- ments in the sector. HSBC has for long now been on a cost- cutting drive, with multiple attempts to drive customers away from costly brick-and-mor- tar facilities to the online world. The bank has been scaling down its pres- ence in the community for years, as it filtered its client base to weed out those who are costly to administer and from whom no re- turn is possible. Nonetheless, the closure announcement has clearly taken many people by surprise: not least, clients who live in areas where HSBC branches will shortly be closing, and who have responded by expressing concern, or even alarm. At a glance, the move may indeed appear ominous. HSBC branches in Birzebbuga, Cospicua, Fgura, Hamrun, Marsascala, St Julian's and St Paul's Bay will all close by the end of 2019; to be replaced by self-service ATM and deposit machines. Its Balzan branch will also merge with its Qormi 'flagship' branch, in a move designed to shift more retail banking services online. This closure, slated for 2020, will make its principal Qormi office HSBC's largest branch in the country. The bank also announced "subject to MUBE agreement, a reduction in roles within the organisation on a voluntary basis". But while many are concerned that this may portend further downsizing, if not an eventual withdrawal from Malta altogether – a possibility often misleadingly predicted in the past – the reality on the ground paints a different picture. The latest announcement is clearly a re- positioning of the bank within the Maltese economy. It was definitely not prompted by any profit warning – only last June, the bank announced mid-term profits that were 30% higher than those achieved in the same pe- riod last year. HSBC has described its actions as a re- sponse to changing customer attitudes and needs. With more people going online and using their phones to bank and transact in money, running branches becomes an expen- sive venture. Instead, the branch closures reflect more investment in digital capabilities for custom- ers. Research conducted by HSBC Group globally shows that 80% of banking transac- tions are completed digitally, with 45% on mobile devices. Similarly, data gathered by HSBC Malta in- dicates that Maltese customers' use of tradi- tional banking services is decreasing by more than 10% per annum, while mobile usage is increasing by 65% each year. In the words of HSBC Malta CEO Andrew Beane: "We are delivering enhanced digital solutions, a modernised branch network with new wealth management centres, and more flexible access to a range of self-service solu- tions. With the closure of some branches, this will all be delivered through a more cost- effective operating model which will help us mitigate the long-term impact of negative interest rates on the bank's profitability in Malta." While branch banking will continue to be a critical part to HSBC Malta's service, Beane added that "what branches do for their customers and how and when they do it is changing." There is a reality here that cannot be ig- nored. And it is positive that HSBC is re- sponding to this changed landscape. But the truth is also that people are shifting online to those financial services platforms that offer ease of use at minimal or no charges, disrupt- ing the traditional banking model. Within this context, it is not as though HSBC has announced any form of reduced charges for online users, or cut its commis- sion on card sales made by traders. The loss of HSBC's physical community presence – which is also a serious inconvenience for many clients, especially the elderly – does not come accompanied by any additional incentives to turn to the digital platform in- stead. As things stand, the community has been left to contend with fewer branches, and to deal with unspecified job reductions. So while HSBC may legitimately claim that the changes are 'an investment in the fu- ture'… they also entail consequences for the present. There is a social cost to HSBC's decision to claw back on its branches. In most of the localities targeted, the branches are primarily used by elderly people to cash their pension cheques, and go about their banking require- ments the traditional way. Moreover, the premise of HSBC's deci- sion overlooks the fact that not everyone, even among younger generations, may be IT literate enough to avail of the new digital technologies. Among European countries, Malta remains on the low side when it comes to general access to the Internet: a fact that should also be taken into account, when im- posing such changes onto an unsuspecting public. The bank, which after all is a commercial enterprise, should not feel beholden to the traditional way by clients who refuse to shift to modern methods of banking. But HSBC is arguably more than just a bank. It is one of two giants that operate in Malta, and so it carries a certain level of social responsibility that goes beyond its pure commercial inter- est. HSBC's dominance, along with that of Bank of Valletta, makes these two banks important economic and social players. It is incumbent on them to make it easier, not harder, for people to cross the digital divide.

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