Banking conference hears of low levels of customer account switching in Ireland

Minister for Finance Paschal Donohoe says the withdrawal of KBC and Ulster Bank is an immediate challenge for consumers and SMEs. File Picture: PA

Switching levels in retail banking dropped as low as 2% in some areas over the past five years as customers struggle to find alternative providers for services including savings accounts, a banking conference has heard.       

This is just one of the issues within the retail banking sector outlined by a the Government ahead of an event with banking stakeholders.

“The retail banking sector is undergoing a period of significant change. Some long-standing providers are departing while we are seeing new entrants and other providers taking on expanded roles,” Finance Minister Paschal Donohoe said at an event discussing Ireland’s retail banking sector.

“In addition, technology is driving a fundamental shift in how the vast majority of services are delivered with significant implications for consumers, SMEs and the wider economy,” he said.

The event hosted by the Department of Finance was part of the Government's Retail Banking Review, which it announced last year to deal with the crisis in banking caused by the departure of Ulster Bank and KBC Bank from the Republic. It is due to be completed in November. 

“The withdrawal of KBC and Ulster Bank is an immediate challenge for consumers and SMEs as they need to switch their current and other accounts to new providers,” Mr Donohoe said.

Experts have said that competition has lessened significantly in Irish retail banking in the past 10 years.  

Since 2014, around 250 branch offices have either closed or are scheduled to close representing almost one third of the total countrywide network.

John O’Connell, general secretary of Financial Services Union (FSU), said new thinking will need to be applied to address the interests of customers and the banks.    

“The FSU campaigned for the best part of a year to convince the Government to establish a retail banking review," he said.