The announced departures in 2021 of KBC Bank Ireland and Ulster Bank from the Irish market represented an unprecedented level of change and presented banks and customers with major challenges. The departure of two banks required large numbers of customers to move their bank accounts to one of the three remaining banks or another financial services provider in the market over the last twelve months. The switching process, and the unprecedented scale of the movement of bank accounts involved, was the subject of extensive media coverage and public and political discussion, including some negative predictions about the potential outcome for customers and banks. Customers impacted by the departure of the two banks from the market, along with stakeholders and advocates were understandably very concerned about access to banking services arising from these changes. Particular concerns were raised for customers in a vulnerable position and in need of additional support.
In May 2022 the IBCB along with the Banking & Payments Federation Ireland (BPFI) announced a set of Guiding Principles agreed to by our mutual member banks for the management of this account migration.1 The principles were motivated by the necessity to protect customers and staff throughout the process of change and centred on commitments to ensure adequate resourcing, and on providing both groups with timely, clear, and specific information and all necessary support. As part of these principles, the IBCB committed to assess adherence to the principles through our ongoing éist Public Trust in Banking Surveys.
Most of these challenges have been met through a combination of extensive and coordinated work on behalf of the banks themselves and the significant efforts of their customers. All key stakeholders in the sector, from the BPFI, individual banks, the CBI, customer advocates, direct debit originators, and the IBCB worked effectively together to ensure there was clear communication with customers on the actions they needed to take. Banks allocated dedicated staff to the process and vulnerable customers were prioritised. Exiting banks, working with stakeholders, identified that some customers required more time to complete the process, and timelines were adjusted accordingly. The IBCB member banks reported regularly to the Board on the progress being made on the current account switching process, and responded in detail in relation to questioning on how the interests of customers were being protected throughout.
The scale of account migration was enormous, highlighted in CBI statistics, published on 19th May, covering the period up to 28th April 2023, which stated that “In total 1,200,810 current and deposit accounts were opened across the three remaining retail banks since the beginning of 2022.”2
The departure of the two banks has inevitably been reflected in the findings of the IBCB’s 2023 éist Public Trust in Banking survey.3 The survey results highlight that the impact of two of these banks leaving the market has understandably significantly impacted perceptions of trust and as a result, the wider trust score for all IBCB member banks is slightly lower than the collective industry. Survey respondents are clearly unhappy with the extent of the change in the banking market and in relation to the IBCB member banks, the remaining banks are trusted more than those departing. The average trust level across the two departing banks is –38, which is materially lower than that of the three banks whose collective score is –4.
Our survey highlights that notwithstanding the scale of the migration, and the threat it posed to public sentiment towards banks, 48% say they are generally satisfied with the bank they have joined and only 16% say the process has undermined their trust in banks. Of those who were obliged to switch banks, 39% found the process easier than expected with 37% saying they felt supported by the bank to which they were switching.
After a slow start and despite the scale of account transfers, we believe that our member banks have managed the process well over the last twelve months, in cooperation with customers and other stakeholders and through significant effort by front line staff.