Irish banks to report monthly account openings as Ulster Bank and KBC retreat

Banking & Payments Federation Ireland (BPFI) will next week start reporting monthly figures on the extent to which remaining banks in the State are opening accounts as Ulster Bank and KBC Bank Ireland customers seek new homes for their savings and day-to-day banking, according to sources.

It is expected that figures from credit unions and An Post will feed into the aggregate reports in the coming months, and that the publication may ultimately be built out to include data on direct debit and regular payment mandates.

Ulster Bank and KBC recently started writing on a phased basis to holders of more than a million current and deposit accounts, giving them six months’ notice to find alternative banking arrangements as they retreat from the market. KBC’s deposit accounts are set to transfer to Bank of Ireland as part of a wider deal that also involves the sale of its almost €9 billion of performing loans.

A key concern exists around the handling of the opening of current accounts with new providers, together with their attending direct debits, standing orders and regular payments. Even in cases where existing direct debit arrangements can, in theory, move under a Central Bank switching code, many direct debit originators and receivers will take instructions directly only from their customers, according to banking industry officials.

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Senior executives from the two departing lenders, three remaining retail banks and BPFI attended a round-table meeting with the Central Bank on Tuesday, following on from the initial gathering in May, to advance industry-wide planning for the unprecedented scale of account transfers, which is expected to peak around the end of September and early October.

“This work is focusing on collaborative planning, customer supports, customer communication and stakeholder engagement,” said BPFI chief executive Brian Hayes in a statement on Wednesday

A dedicated so-called customer transition working group has been established under the auspices of the BPFI, and including direct-debit originators, relevant Government departments and organisations representing customers in vulnerable circumstances, to try to deal with issues that will crop up in the coming months.

“This is a real opportunity for the retail banking sector to deliver on the public commitments made in recent years in relation to cultural change and improving confidence in the banking sector,” said Derville Rowland, director general for financial conduct at the Central Bank.