Yahoo Finance Central Bank could take action to delay withdrawal of Ulster Bank and KBC
Ireland’s Central Bank Governor has indicated that it could take measures to delay the withdrawal of two banks from the Irish market as customers face difficulties in making the switch to new providers.
Gabriel Makhlouf also admitted that some people’s experiences of trying to switch “leaves something to be desired”, and mentioned issues such as delays with answering phones.
“It’s not particularly new, but people are just finding the whole thing a bit of a hassle, I’m paraphrasing.
“It’s just difficult to talk to people,” he told reporters at a financial sector conference held in Dublin.
It comes as new research showed that 60% of KBC or Ulster Bank consumers reported challenges with switching, with the most significant issue being transferring direct debits and payments (29%).
A further 10% reported difficulties in accessing in-person support, according to research by the Competition and Consumer Protection Commission (CCPC).
Ulster Bank and KBC Bank announced within two months of one another in 2021 that they plan to leave the Irish market, affecting hundreds of thousands of people and businesses in Ireland.
The three remaining banks, AIB, Bank of Ireland and Permanent TSB, gave evidence to an Oireachtas committee earlier this year about the measures they were taking to support people who had to switch, particularly elderly and vulnerable customers.
Speaking to reporters on Wednesday, Governor Gabriel Makhlouf said that more needed to be done to help people switch banks, and that it it was within the Central Bank’s power to take action to delay the withdrawals if required.
“We can take that sort of action,” he told reporters.
“But let me just say that the answer to this is not for us to just say ‘OK, there’s just going to be loads more time’.
“The answer to this is to actually get everybody to be working towards the transition, but certainly at the end of the day, account holders are not going to be left stranded.”
Mr Makhlouf added: “It’s quite clear that more people need to get on and switch, so I think more needs to be done by everybody, actually.
“By the banks who are leaving, by the banks who are receiving, by us, by people like the CCPC itself, which I think is an important role to play in communicating messages, etc.
“By the BPFI (Banking and Payments Federation Ireland), which is playing a bit of a galvanising role in getting all this going.”
Research published on Wednesday by the CCPC found that 52% of consumers who have their main account with Ulster Bank or KBC have opened a new account.
It also found that almost two-thirds of Ulster Bank customers who plan on switching expect to have done so within the next month.
Kevin O’Brien, CCPC commission member said the CCPC was strongly encouraging consumers to try and switch banks as soon as possible so they don’t experience any banking issues over Christmas.
“Ulster Bank have indicated they will start freezing certain accounts in the coming weeks so consumers could lose access to their money if they haven’t completed their switch,” he said.
The CCPC’s research also found that one in eight consumers have yet to decide on a new provider, compared to one in four in July.
Almost one in four consumers are prepared to consider an online-only banking provider without branch services in Ireland but 73% would not consider it.
Mr Makhlouf said that the 25% figure was “fascinating” and that it was further evidence that the banking sector in Ireland is changing.
“It’s our individual actions ultimately, as consumers of financial services, that will determine what is the future financial landscape.
“It’s not the decisions of the senior executives of the banks (that) are going to decide, it is consumers ultimately, who will decide what sort of financial services world they want to live in.”
