IFSRA to track bank accounts switch
On Monday, the 14 financial institutions that offer personal account products will implement a new framework which should, in theory, make it easier for account holders who want to switch.
The Code of Practice on Switching Accounts, drawn up by the Irish Bankers’ Federation, will place the onus on the institutions, and not the account holder, to smooth the changeover.
But it is a voluntary framework, meaning there are no guarantees for consumers it will be a trouble- free process.
However, the Irish Financial Services Regulatory Authority (IFSRA) confirmed yesterday that it will monitor the effectiveness - or otherwise - of the new framework. If unhappy with its progress, IFSRA says it will consider introducing a statutory scheme that banks will have to adhere to so as to ensure customers can switch institutions with ease and speed.
“We will monitor the effectiveness of the code,” an IFSRA spokeswoman said yesterday. “One of the things we’re looking for is the extension of it to business customers.”
The framework in its present form will cover only current, deposit and savings accounts held by personal customers.
The spokeswoman said the benefit of a statutory scheme was that it would allow for sanctions to be imposed “if the banks were not compliant.”
IFSRA has set no timeframe in which to make a decision on whether a statutory framework is necessary.
Meanwhile, some of the 14 banks are actively attempting to entice customers away from other institutions ahead of Monday’s launch of the code.
Ulster Bank says it will waive the charges for setting up standing orders and direct debits during the first three months of a new account.
It means that customers who switch their accounts from another financial institution to Ulster Bank need not fear being hit with a series of levies to transfer their existing standing orders and direct debits.
That could represent a significant saving, as the bank charges existing current account holders €4 to set up a standing order and €3.17 to set up a direct debit.
Ulster Bank is the second big player in the market attempting to make their personal account products more attractive to consumers thinking of switching.
Permanent TSB has announced the launch of a new current account, entitled Switch, which will carry no regular transaction charges.
Switch account holders will pay no quarterly charges; no withdrawal, lodgement or laser fees; and no set-up fees for standing orders and direct debits.
However, they will pay charges in a small number of eventualities, such as if they exceed their overdraft without prior agreement.
The bank believes its new account could save consumers more than €100 in bank fees.
