Banks ‘ill-prepared for Irish banking sector’s biggest logistical challenge since euro’


EXITING IRISH BANKS should not write to customers to switch service providers until all stakeholders are ‘satisfied’ that a ‘sound’ plan is in place to handle the disruption, the Financial Services Union has said .

Ulster Bank and KBC Bank are currently in the process of winding down their operations in the Irish market.

Last week Ulster Bank announced that over the next few weeks it planned to start writing to its more than 900,000 personal account customers, giving them six months’ notice to choose a new provider, switch providers and close their old accounts.

Letters and emails will be sent to the bank’s nearly one million personal customers “on a progressive and rolling basis, giving them six months’ notice,” the bank said in a statement Wednesday.

Bank of Ireland, AIB and Permanent TSB all foresee a very rapid increase in the volume of former Ulster Bank and KBC customers looking to switch providers over the next few months.

But across the market, clients are already seeing longer than usual wait times for appointments with their local institutions.

Recent cuts, branch closures and resulting ‘poor service levels’ at bank branches across the country could create ‘the perfect storm’ for Irish banks and their customers, said John O’Connell, Secretary General of the Financial Services Union (FSU).

“Since the introduction of the euro, I think this is the biggest logistical change in the history of Irish banking,” he said. The newspaper.

“You have 960,000 Ulster Bank accounts and you have over 300,000 accounts in KBC Bank. He has the makings of a perfect storm.

Among other things, customers changing banks may need to transfer all of their existing direct debits to their new account provider for data protection reasons, O’Connell said. In the worst-case scenario, customers could find themselves “unbanked”, O’Connell added, if they close their existing accounts with one of the outgoing banks, only to then wait to open an account with one. new supplier due to delays.

It comes the same week as the Financial Services Ombudsman published its 2021 complaints overview. It revealed that a quarter of all complaints – and 28% of complaints received relating to the banking sector in particular – were about customer service. Last year.

Banks are currently using a “lean staffing model,” O’Connell said, which could leave branches vulnerable in the coming months.

“What Covid has revealed is that when something happens in a branch [like an outbreak of the virus]they have to close the branch, move the branch staff to another branch and so on.

Bank of Ireland has significantly reduced its physical network over the past two years in a bid to cut costs, closing 100 branches and cutting 1,700 jobs through a voluntary redundancy plan.

AIB has only closed 15 branches but is in the process of cutting 1,500 jobs through voluntary redundancies.

Against this backdrop, O’Connell said there is huge potential for disruption and expressed concern about the strain on staff.

“The feedback from our members on the ground is that customers are already extremely frustrated and they are feeling the brunt of it.”

If you put yourself in the shoes of someone who works in a bank—in a call center, for example—and I’m a customer who waits two hours and I have to have a conversation to resolve a problem, after two o’clock I’m no longer going to be a nice person when I talk to this employee. It’s just human nature.

O’Connell added: “The Irish Banking Culture Board has carried out two surveys which show that staff working in the banking sector have experienced significant levels of stress. It will now get worse.

“We are very worried.”

In response to questions from The newspapera Bank of Ireland spokesman said the lender was “delighted to welcome new customers”.

They added: “We are committed to making the process as easy as possible for customers moving to Bank of Ireland or opening an account for the first time. We are also providing targeted assistance to customers who currently need it through our Vulnerable Customer Unit.

The departure of Ulster Bank and KBC from the Irish banking sector is unprecedented in the Irish banking sector. In addition to the strong and supportive role we will play in the period ahead, minimizing disruption to customers who switch banks will also require the collaboration of multiple stakeholders across the economy, including service businesses public, government departments and agencies, and employers.

In a statement, an AIB spokesperson said: “AIB is keen to welcome customers of KBC and Ulster Bank who are looking for a new bank headquarters.”

On the issue of wait times for appointments, the spokesperson said: “Depending on the location of the chosen branch, wait times for account opening appointments may vary.

“To support customers in places where demand is particularly high, we have increased the number of account opening appointments available by offering weekend appointments. We are also in the process of allocating substantial additional resources and staff to meet the increase in the number of customers wishing to open an account with us.

central bank

Questions about banks’ preparedness for the changes were also raised last week at the Oireachtas Joint Committee on Finance, following recent comments from Colm Kincaid, director of consumer protection at the Central Bank of London. ‘Ireland.

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Speaking on RTÉ News in March, he said banks ‘are not where they need to be yet’ to prepare for the surge in customer numbers as Ulster Bank and KBC head out .

“It’s a very important exercise that they need to invest resources in and do well, and I think they’re not where they need to be yet, but I know there’s a lot of work going on in the institutions to make it happen,” he said.

At the time, the Banking and Payments Federation of Ireland (BPFI) – the main Irish banking industry lobby group – described the challenge as “an unprecedented event” in Irish banking history.

BPFI Chief Executive Brian Hayes said: “This will require the involvement and support of multiple stakeholders across the economy, including the banking industry, regulator, utility companies, government departments and agencies. and employers working together.

“BPFI and its member banks are already working intensively together as an industry as well as with stakeholders in the economy, to assess and plan for the unprecedented task of transferring millions of accounts and direct debits from personal and business customers. through the economy.

Asked about preparedness levels, Central Bank Governor Gabriel Makhlouf told the Oireachtas finance committee last week: “Everyone at the Central Bank, but also in the other institutions, is fully aware the importance of doing things right.

“I wouldn’t say everyone is ready at all costs… but what I can also say is that we are fully engaged with the institutions on this. And to be fair, I think they are fully aware of the scale of the challenge they face and they also know their obligations.

FSU’s O’Connell said The newspaper this the union would like the Central Bank to step in and tell outgoing banks not to proceed until all stakeholders are satisfied.

“Everything currently indicates that there are significant difficulties,” he said.

“We do not want letters to be sent to customers until the Central Bank and other stakeholders – including ourselves, consumer associations etc. — aren’t convinced there’s a solid plan to handle it in a way that doesn’t upset consumers. »

To find out how to change your bank account, you can follow this link to the Competition and Consumer Protection Commission website.

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