Most Irish consumers believe the culture of banks has not improved since the financial crisis, according to a new survey carried out for the Department of Finance as it continues a review into the future of banking in the State.
Some 27 per cent of respondents to a Behaviour & Attitudes survey of 1,500 individuals said that the culture of Irish banks had got worse since 2007 and 2008, when the credit bubble burst and taxpayers were forced to guarantee the financial system.
A further 31 per cent said that banking culture had not changed, while 42 per cent said it improved.
"Those not using online banking are more likely to feel that the banking culture has disimproved," the report said, ahead of Minister for Finance Paschal Donohoe and Minister of State with responsibility for financial services Seán Fleming holding a stakeholders' engagement forum in Tullamore, Co Offaly, on Monday as part of the banking review.
Current accounts
The survey found that 97 per cent of the sample hold their main current account with a traditional retail bank, with one in 10 holding their main current account with Ulster Bank or KBC Bank Ireland, who are currently seeking to exit the market. Only 1 per cent hold their main current account with a digital bank.
Digital channels are the main form of contact for 70 per cent of consumers. However, 23 per cent said that their main form of contact was the branch where they hold accounts.
The survey also confirmed that switching rates remain low for all financial products, with only between 2 and 5 per cent having switched in the last five years, depending on financial product.
Mortgage switching
Changing mortgage providers was the most common form of product switching, according to the survey.
Still, the exits of Ulster Bank and KBC will drive up switching. More than one million deposit and current accounts are affected by the exits of the two banks.
“Retail banking has been undergoing significant change in recent years. It is a vital component of our domestic economy and in response to the changes under way and those that are ahead, last year, the Government agreed to a review of the retail banking system to assess how it can best support the social and economic needs of our citizens and businesses into the future,” said Mr Donohoe.
The banking review is expected to be completed by November. A public consultation period will run between Monday and July 8th.
