23,000 customers dump their bank for Permanent TSB’s free banking

AROUND 23,000 people have dumped their bank to take advantage of Permanent TSB’s free banking offer since it was launched earlier this year, the bank said yesterday.

But only one in three of these customers benefited from the new code on switching current accounts which was brought in by the Irish Bankers’ Federation (IBF) in January to encourage bank customers to shop around.

Permanent TSB said its campaign to snatch customers from other banks was “off to a flying start” and ahead of its original expectations.

“In the first six months of the year, we’ve opened 34,000 new current accounts,” said head of marketing Niall O’Grady. He said 23,000 of those - or 1,000 a week - were being opened by new customers while the rest were existing customers upgrading their accounts.

The bank said the numbers signing up in the six-month period compared favourably with last year, when just over 35,000 new accounts were opened over the full year.

Research by the bank found younger customers were more likely to switch, with 42% of new customers aged between 26 and 35. This age group is considered crucial in the banking industry because these customers are most likely to take out high-value products such as mortgages, life assurance or pensions.

Almost one third of switchers (29%) came from the 36-45 age group, while 7% were aged between 46 and 55. Meanwhile, the over-55 bracket accounted for 10% of switchers.

AIB and Bank of Ireland were the big losers from Permanent TSB’s initiative, shedding 19,000 customers between them. Both banks have ruled out matching Permanent TSB’s offer and maintain their pricing packages are competitive. Research by the financial regulator published earlier this year found typical bank customers stood to save in the region of €100 a year by signing up for free banking.

Mr O’Grady said only 7,000 customers had used the IBF code on switching banks to make the transition easier. The code aimed to shift the burden of paperwork involved in switching from customers to banks and to encourage competition in the current account market.