Confusing processes are delaying customer switching activity from exiting banks KBC and Ulster Bank 

Delaying switching accounts to a new bank could leave customers vulnerable to risks, warns competition watchdog. 

Transferring direct debits was one of the main issues facing Ulster Bank and KBC customers when switching. 

Less than half of KBC and Ulster Bank customers have switched to a new bank, due to confusing processes.

KBC and Ulster Bank customers that are delaying switching their accounts ahead of the two banks leaving the Republic of Ireland retail banking market are vulnerable to risks, said the Competition and Consumer Protection Commission (CCPC).

“Consumers need to be very proactive to ensure that all Direct Debits are moved over to their new account to ensure key payments on bills and loans go through without disruption,” said Brian McHugh, CCPC commission member.

Over 10% of respondents who had completed or started the process of switching identified transferring direct debits as the biggest challenge faced. This was followed by a lack of suitable alternatives, difficulties accessing in-person support, too many forms and documentation required, and challenges in switching multiple financial products to a new provider.

The competition watchdog warned these customers that have not yet switched that delaying the process to the last minute could lead to regular payment disruptions, loan repayment arrears, security risks and a negative personal credit rating.

“We are very aware that switching a current account can be challenging for consumers, particularly those on low incomes,” said Mr McHugh.

The research showed that 7% of respondents felt the biggest challenge was the amount of time and hassle it took to switch, with 15% Ulster Bank customers more likely to note this as their biggest switching challenge, as well as 16% of those switching their main current account.

Over half of the respondents were unaware of the Central Bank’s Switching Code, which sets out the rules that most providers must follow when customers are moving their current account to another provider.

The watchdog said that one in five customers with these banks have not taken any action yet to switch current accounts to a new bank.

CCPC research found that 47% Ulster Bank customers were more likely to have already opened a new current account when compared to 27% of KBC customers, 20% respondents to the research said that they had decided on their new current account provider but had yet to open an account.

Over a quarter of respondents said they would consider an online-only provider to replace their main current account.

The response to this research was highest amongst KBC customers at 35% compared to just 18% of participating Ulster Bank customers.