Banking research reveals huge dependency on main retail banks, as review event takes place
Just 1% of people here have their main current account with a digital bank, a survey of consumers carried out on behalf of the Department of Finance has found.
While thousands of people use services like Revolut to transfer money, the fintech recently expanded their presence in the Irish market offering a full banking service with deposit accounts and personal loans.
Other rival financial technology companies offering a banking service here include N26 and Dutch bank, Bunq, which recently officially launched in Ireland with an Irish IBAN for banking customers.
However, despite the growth in online-only challenger banks, the survey found that 97% of people continue do their main current account banking through a traditional retail bank.
One-in-ten keep that main current account with the departing Ulster Bank or KBC Bank Ireland.
The proportion of the population using digital-only banking is expected to increase in the months and years ahead as Ulster Bank and KBC exit the market, leaving hundreds of thousands of customers looking for a new banking service provider.
Seven-in-ten of those surveyed said digital channels were their main means of contact with their bank, but just 28% of those aged over 65 said they were weekly online banking users.
23% said they interacted with their bank principally through branch visits – although this figure is significantly higher among those aged over 65.
Switching rates were found to be low for all financial products, with only between 2% and 5% having switched in the last five years – depending on the financial product.
Almost one-in-three said they are very satisfied with their main banking provider, with an additional half being relatively satisfied and 7% dissatisfied.
More than two in every five indicated that they feel the banking culture has improved in Ireland since the 2007-2008 financial crisis, but over a quarter feel it has gotten worse, and nearly a third feel culture has not changed at all.
The in-depth survey of 1,500 people was conducted by Behaviours and Attitudes on behalf of the Department as part of a review of the retail banking sector.
The results are being published as a public dialogue event, organised by the Department, takes place in Offaly today.
The Retail Banking Review Dialogue provides a forum for key stakeholders to communicate their views on the future of retail banking.
It will also include a public consultation which opens today and continues until July 8.
Interested parties are invited to engage and submit their views.
Ahead of today’s discussions, the Financial Services Union called on stakeholders to use the review as an opportunity to build a ‘stakeholder banking system’ that is ‘inclusive and customer centric’.
The FSU said a structured profit-sharing arrangement should be implemented by the banks.
“We hear a lot of talk about the difficulties in attracting senior management in the banking sector because of the €500,000 pay cap but little about the 23,000 staff who cannot receive just reward for their work,” John O’Connell, General Secretary of the FSU said.
“Structured profit-sharing arrangements are common across the European banking sector, and it has been European Union policy for 30 years,” he added.
He said such an arrangement would act as an incentive to encourage staff retention and enhance productivity in the sector.
Article Source – Banking research reveals huge dependency on main retail banks, as review event takes place – Brian Finn – RTE