Banking on Trust: The Story of GraceKennedy’s Financial Group

Tackling the challenge of financial exclusion, Grace Kennedy Financial Group Limited (GKFG) has built a successful business around serving the financially disadvantaged. GKFG, the financial services division of GraceKennedy Group, has grown over the years to offer a range of services designed to empower those previously marginalized by the formal banking sector.

In an exclusive interview with the Jamaican observerGrace Burnett, GKFG’s first female CEO, proudly upholds the vision of the company’s founders, which has successfully included more than a million people who would otherwise be excluded from the banking industry.

“GK Financial Group’s customer base consists mainly of lower-income households, and our focus is on making them feel financially included,” she proudly emphasized.

GraceKennedy’s financial journey began in the 1990s and evolved through several name changes, culminating in the creation of GraceKennedy Financial Group (GKFG) in 2015. According to Burnett, the creation of GKFG was intended to consolidate the results and performance of the financial entities, which made monitoring possible. a separate entity within GraceKennedy. By establishing a holding company, GraceKennedy aimed to bring these entities under one umbrella, facilitating reporting and supervision by the Bank of Jamaica (BOJ) as required by the Banking Services Act.

However, merging the financial institutions into one entity was not without challenges, as each entity had its own specific culture and autonomous way of working, as described by Burnett: “Culture eats strategy for breakfast every day.” To address this, GK sought the expertise of an external partner to help integrate the financial group’s culture and create a unified identity. Through this collaboration, they successfully created a cohesive culture that the entire group could rally behind.

“We have done a significant amount of work in this area and I believe we have successfully created a unified culture that aligns with our current mantra of ‘one group, one purpose’. We are all on the same page now,” Burnett said.

GK Investments, later renamed GKFB, underwent a transformation, refining its offering and expanding its services. In particular, GK’s remittance business, which dates back to 1990, was a major milestone in GK’s financial services industry. However, the first financial services venture started with general insurance, which eventually became GK Insurance.

“As traders you discovered the need for insurance. And so we started out as agents for insurance companies in the UK and elsewhere to facilitate the food sector. So that’s basically how we got started in financial services,” she explained to the Business observer.

In 1990, GK decided to sign a contract and become a master agent with Western Union, creating an entirely new company now known as Money Services. Over time, this transfer company was joined by the payment company Bill Express and the cambio company FX Trader. It recently added coin exchange, which is still unknown to many and collects coins on behalf of the BOJ.

During the same period, GK acquired Global Bank, marking its entry into commercial banking under the leadership of Don Wehby, before he became group CEO. This move led to the acquisition of Trafalgar Commercial Bank, which was later renamed First Global Bank. Subsequently, First Global Financial Services was sold and a few years later GK Capital was founded, which dealt with banking and investments. GK also has an equity investment in Barbados-based Signia Financial, in partnership with Cape Shepherd. GKFG’s suite of financial services includes insurance, with the largest commercial broker in Jamaica, Allied Insurance and GK General. More recently, Key Insurance Company in St Lucia and GK Insurance Eastern Caribbean Limited were added, expanding life and health insurance services to 14 markets. Burnett explained that this diversification was intentional as the company recognized a concentration risk in the money services business.

“One of the things we would have recognized is that we have a concentration risk in money services. And as a company you always try to say: ‘Okay, suppose something goes wrong here. What’s happening?’” she asked rhetorically.

GK decided to invest in insurance, which now represents more than 50 percent of its turnover. Although money services still dominate in terms of profitability, their share has not declined because profits have fallen, but because insurance profits have grown significantly.

“We always ask ourselves how we can make the customer’s life easier,” Burnett said when asked about technological innovations over the years.

Starting with the online insurance GKG, which allowed customers to create their own policies and decide how much they wanted to spend. Over the past three years, a substantial amount has been spent on digitalization, with an emphasis on making services easily accessible to customers. Now with its own digital factory, GK has built out GKONE, a digital interface and ecosystem that allows customers to access every service under the GK umbrella. However, according to Burnett, the main focus of the group’s success is its focus on financial education and helping those who are excluded from banking options because they are struggling financially.

“We always look at how they (with financial problems) can get the respect they ask for,” says Burnett. “They often feel disrespected by many of us. And on their journey to respect, it’s about how we can help them get there. So we believe that ambitions, big or small, are meant to be pursued.”

GraceKennedy’s efforts in financial inclusion were exemplified by the 2022 launch of its prepaid Visa debit card, with Shelly-Ann Fraser-Pryce as the cover photo. Initially designed to be funded by wire transfers without the need for a banking connection, the card can be loaded with money at any Bill Express location and used for online and in-store shopping. Since launch, 50,000 people have purchased the card, which can be collected in any parish and is supported by Visa and First Global Bank, benefitting both parties. A key aspect of GraceKennedy’s 2030 plan is to achieve a high percentage of digital transactions and be listed on the Jamaica Stock Exchange.

“Financial services are built on trust, and if you want trust, there’s no better name than GraceKennedy. We are extremely proud of our heritage, and what we try to do is leverage that, because I believe that is what makes our customers trust us. They rely on both our food and our financial services,” Burnett said.