THE CENTRAL BANK has called a meeting of Ireland’s main banks to discuss how “more needs to be done” to support customers affected by KBC Bank and Ulster Bank’s planned departures from the market.
The banks have been told they must protect consumers, including assisting vulnerable customers, as many close their accounts and switch to a new bank.
Both Ulster Bank and KBC are winding down their operations in Ireland, leaving Bank of Ireland, AIB and Permanent TSB to fill the gap in a landscape that has been described as the “biggest logistical change in the history of Irish banking”.
The Central Bank has identified that a “number of concerns” are arising for customers changing their accounts over to a different provider.
Some of the key risk areas banks have been told to mitigate include notice periods, the switching process, and “commercial decisions” that facilitate customers making the change to a new bank.
The Central Bank has invited the CEOs of Ireland’s retail banks to a meeting on 17 May to “reinforce” its expectations on how the banks should be helping customers.
In a statement, the Central Bank’s Director General of Financial Conduct Derville Rowland said that “since the announcements by the boards of the departing banks in February and April last year, we have engaged intensively with the five banks to assess and manage the implications of the transactions”.
“We issued our first industry letter in June 2021, setting out our expectations of how consumers must be treated throughout this period of change and consolidation,” Rowland said.
As the process of closing bank accounts now commences, the imperative for departing and remaining banks to demonstrate that they have sufficient plans, preparations and resources in place to deliver on our expectations.
“We are assertively supervising the banks to ensure they prioritise the interests of customers and prospective customers throughout this unprecedented volume of account migration.”
Earlier this month, Ulster Bank gave its customers six months’ notice to switch their current and deposit accounts to a new provider and close their existing accounts.
At the same time, KBC Bank announced it will start writing to its current account customers on a phased basis from June with a 90-day notice to switch.
Rowland noted the “unprecedented scale involved” and that “staff within the banks are working extremely hard in challenging circumstances to provide customers with the services they require”.
“We are keenly aware of the impact on both staff and customers in that regard,” he said.
“But while recognising the challenge an exercise of this scale represents, it is also clear that, in terms of the banks’ overall plans, more needs to be done.”
Experts have advised affected customers to take action as soon as possible to avoid difficulties finding a new bank, but not to panic.
Speaking to The Journal, Director of Communications at the CCPC Grainne Griffin said customers should think about what their banking requirements are.
“People really need to think about how important is it for them to have a branch that they can walk into. Do they have a lot of direct debits and subscriptions? How much does it matter that they have the ability to cash a check? All of those various things,” she said.
“There’s actually a bit of work that goes into getting a handle on all of that.”
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