The Irish Financial Services Regulatory Authority's has outlined its three-year strategy, promising to ensure that Irish consumers get value for money while ensuring that financial institutions here remain solvent.
The 36-page document contains few surprises and if it meets its objectives one can only hope that by 2006 consumers will have noticed its efforts.
It would be fair to say that the new regulatory body won't have made any noticeable impact on most consumers' financial dealings to date.
The regulator, which is an arm of the Central Bank, is now working hard to endear itself to the public and to show that it has the power to put more money in their pockets.
As a result of the publicity it has generated, thousands of disgruntled people have called its helpline to report their grievances and to seek advice on how they should tackle their problems.
Many more have visited its website to gather information on new products such as Personal Retirement Savings Accounts.
Its consumer director, Ms Mary O'Dea, was swift to row into the debate last year about whether banks here were fleecing their customers by their reluctance to fully pass on reductions in European Central Bank rates. Since then, IFSRA, has begun to closely monitor the rates of interest charged and paid to Irish consumers and hopefully ensure they are competitive.
Its efforts on this thorny issued will be greatly assisted by the monthly interest rate comparisons compiled by central banks across Europe. Data for November 2003 was issued yesterday and its regular publication will certainly provide a welcome and authoritative price comparison for consumers.
They now definitively know that mortgage rates in Ireland are among the most competitive within the euro zone. In November, for instance, the average mortgage interest rate in Ireland was 3.46 per cent compared to 3.59 per cent in Europe. This is welcome news for consumers as mortgages tend to be their biggest financial outlay with interest rates applying to the sum borrowed over 20 to 40 years.
The figures also suggest that Irish consumers are getting a pretty good deal on the rate of interest charged on loans taken out for home improvements and to purchase cars.
The average rate of interest charged on loans for consumption in Ireland was 5.27 per cent compared to 7.56 per cent elsewhere in Europe, some 2.3 percentage points cheaper.
The main reason why this rate appears so good is that here, it is increasingly linked to competitive mortgage rates.
More and more people are borrowing extra cash against their home availing of the increased range of equity-release type products on offer. As these loans are secured against a property they tend to attract a much lower rate of interest than unsecured loans.
Other loans were found to be almost one percentage point higher in Ireland at 5.06 per cent compared to 4.16 per cent across the euro zone.
Long suffering depositors are in a worse position than their European counterparts. Where funds were lodged for a minimum of two years, they were paid average returns of 2.2 per cent compared to 2.61 per cent.
The figures also provide Irish businesses with a good platform to demand keener interest rates. This sector is shown to pay more than one percentage point more for an overdraft, 0.4 of a percentage more extra on a loans up to €1 million and 1.11 per cent on loans over this amount.
IFSRA has considerable powers to smash some of the differential that exists for Irish consumers and its job should be strengthened by the Competition Authority which is also studying the banking sector. It will be interesting to look at these figures in 2006.
Its role is much wider than this though and it strategy document explains that consumers should expect it to ensure that financial companies operate ethically at all times and are fined, named and shamed, when they dupe their customers.
It is preparing codes of practice setting down very high standards to safeguard consumers where necessary.
Ms O'Dea said IFSRA will also be encouraging consumers to "vote with their feet" where they are unhappy with the term or service offered.
This year it intends to ensure that it will be much easier to switch a current account from one financial institution to another.
Banks will be expected to facilitate the customer in every way possible, helping them to set up direct payments and other regular automated withdrawals. If successful this could well boost the level of competition in this area.
It will also be stepping up its inspection of bank records, and particularly those related to mortgage lending, on foot of concerns that some borrowers may have overstretched themselves.
IFSRA chief executive, Mr Liam O'Reilly, has said it its committed to a principles-based approach to regulation and will be demanding very high standards from the senior management of Irish financial services companies.
"This can be achieved by the boards and top management of financial services providers committing, fully, to a culture of integrity, competence and best practice. In turn we would expect them to ensure that this culture flows throughout their organisations."
The regulator's chairman, Mr Brian Patterson, said the publication of its strategic plan demonstrated its public commitment to transparency and accountability.
Unfortunately, much of its dealings with financial institutions, which are being asked to part-fund its operations, will be behind closed doors and confidential, so it will be difficult for the public to monitor its progress. Tangible improvements in the cost of financial services and a greatly improved service to customers must be its goal and hopefully we won't have to wait until 2006 to see enjoy those benefits.
