Only 220,000 bank customers have switched as Ulster and KBC prepare to shut million accounts

People in Ireland have reported difficulties in getting appointments for switching from the departing banks, including difficulties in doing it online. Stock picture

Just 220,000 new personal accounts have been opened so far this year, despite the impending closure of around one million bank accounts in the coming months due to the departures of Ulster Bank and KBC from the Irish market, new figures show.

According to figures released by Banking and Payments Federation Ireland, under a quarter of a million new personal accounts have been opened by the three main retail banks so far this year — AIB, Bank of Ireland, and Permanent TSB — as consumers are forced to switch in numbers never seen before in the Irish banking system.

The BPFI acknowledged there is a “significant task” ahead given that, between them, Ulster Bank and KBC have in the region of one million account holders, and said its members will “continue our extensive efforts” until the last customer account is closed.

It comes after the Central Bank met with the main banks last week and said it made clear that the banks must meet customer expectations and that it was prepared to intervene if its expectations are not met.

Furthermore, there have been calls for the protection of customers and a redoubling of efforts from the banks to accommodate the hundreds of thousands who will need to switch accounts in the coming months.

KBC began writing to customers on June 1 informing them they had six months to close their accounts.

Ulster Bank began the same process of contacting customers in tranches and plans to finish this process of closing all customer accounts in the first quarter of 2023.

However, consumers have reported difficulties in getting appointments for switching and difficulty in doing it online, even as the banks have pledged to take further action to accommodate customers switching in the coming months.

'When you’re dealing with this many accounts, problems for a small cohort could still affect thousands of people,' says Age Action’s senior public affairs and policy officer, Nat O’Connor. File picture

Nat O’Connor, senior public affairs and policy specialist with Age Action, said that not everyone has the digital literacy or resources available to them to open an account online and that if it reaches a stage where their account is closed and they receive a cheque in the post, it would be a “disaster”.

“The banks may well process 10,000 a week,” he said. “But it’s the hard cases we’re worried about. People’s direct debits could fail, they could miss a payment.

“We’re talking a million accounts. The scale of the direct debit changes even, this is a lot of work that has to ripple through the system. 

"When you’re dealing with this many accounts, problems for a small cohort could still affect thousands of people.” 

Mr O’Connor that a key area of concern for customers switching over is the need to both clear their overdraft with their existing bank and ensure they can avail of that facility with their new bank if needed.

“They may just be living on a pension with their money tied up, and they need a credit facility to help manage their affairs,” he said. “People might not be aware that switching their accounts doesn’t mean they can bring that overdraft with them too.

“If you had a €2,000 overdraft, they’ll want you to clear that. People may have to juggle money for that, and then could be no for an overdraft from their new bank.” 

Daragh Cassidy, head of communications at Bonkers.ie, said that people could find themselves in difficulty if they’re asked to repay their existing overdrafts in a short period of time and struggle to get access to one if their circumstances have changed.

“I think there should be an amnesty in place for people who miss payments over the next few months over this,” he said. 

I fear some people will struggle to get all their payments switched over on time. 

Mr Cassidy cited the example of Eir, which lists a charge of €18.45 when a customer misses a payment.

“I would call on the Central Bank to make sure people aren’t unduly affected through no fault of their own,” he added.

Damien Mulley runs Mulley Communications in Cork said he called into a bank branch to switch his business account, but was told he must register for an appointment.

When he tried to do that, he received no reply and has just a few months to get sorted.

Mr Mulley is confident he will get things switched on time but is worried about ensuring all of his payments are switched over on time.

“I should’ve started this months back,” he said. “But if you’re a businessperson, you don’t have the time for that. All the admin stuff is done in the evenings and at the weekend, when the banks are closed. I’ve been talking to other businesses and they’d be the same.” 

To help support customers in the coming weeks and months, the five main retail banks launched a new website, movingaccount.ie aimed at providing a step-by-step guide for switching.

BPFI chief executive Brian Hayes said: “BPFI and its members fully recognise the upheaval which customers are currently experiencing and understand that many customers may feel daunted by the task involved in moving their banking services.

“Today we have also published new figures showing that over 220,000 personal accounts have been opened so far this year with over 9,000 personal current accounts being opened on a weekly basis.” Mr Hayes added the banks will publish data on a monthly basis, and track the numbers to assess and manage operational capacity in the system.