The withdrawal of KBC and Ulster Bank is a challenge facing consumers and SMEs as they need to switch their current and other accounts to new providers. It is important that the Irish banking sector rises to this challenge. All stakeholders in this process must play their part in ensuring it is carried out successfully, with minimal disruption for all impacted customers.
My priority is to ensure that each bank withdraws from the market in an orderly manner. My officials and I have emphasised the importance of this in all engagements with Ulster Bank and KBC and both banks will meet with officials and provide relevant information regarding account closures to the Department of Finance on a monthly basis. This will help to identify any emerging trends and potential issues for consumers.
The Central Bank and I expect all retail banks, both those exiting the market and those remaining, to have plans in place to manage the impact of the broader changes and consolidation in the retail banking sector in Ireland. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.
I have been informed by the Central Bank that this week it has written to the CEOs of the five main retail banks to set out its expectations on some key items related to the account migration process.
The purpose of these letters is to reinforce and, to any extent necessary, clarify the application of the expectations set out in the Central Bank's previous letter of June 2021 and to invite the CEOs to a roundtable meeting, hosted by Director General, Financial Conduct, Derville Rowland on the following five key issues/risks:
- Notice periods
- Application of the switching process
- New provider making commercial decisions in a manner that facilitates a customer making and executing a switch
- Direct debit originators and/or other service providers
- Vulnerable customers
In terms of the preparedness of the remaining banks, the Banking and Payments Federation of Ireland (BPFI) has advised that the industry is resourcing up significantly and that over 100,000 accounts have been opened at the three remaining retail banks so far this year. The Department of Finance is engaging with the BPFI on an ongoing basis to ensure that the industry is responding to the challenge appropriately.
I and my officials will continue to monitor and engage with the existing and remaining banks over the coming months regarding their preparedness and the progress being made on moving customers. My officials are also meeting with other financial service providers that offer current accounts to discuss how they can support customers opening new accounts because of the withdrawal of both Ulster Bank and KBC.