Many banks are failing to provide satisfactory information to consumers on how they can switch personal accounts to rival financial institutions, according to a new study.
The results of a mystery shopping exercise undertaken by the Financial Regulator to monitor compliance with the Irish Banking Federation's Personal Switching Code, found that just 59 per cent of the bank branches it surveyed were found to offer adequate information to customers on how to switch banking provider.
The switching code, which was introduced in 2005, is meant to make it easier for customers to change banking provider. Almost 59,000 personal accounts had been switched up to end of 2008, amounting to an average of 14,750 switched accounts every year.
Among the financial institutions who have subscribed to the switching code are ACC Bank, AIB Bank, Anglo Irish Bank, EBS Building Society, ICS Building Society, First Active, Halifax, IIB Bank, Irish Nationwide Building Society, National Irish Bank, Northern Rock, Permanent TSB, Postbank, Ulster Bank.
Fifty-one branches of seven banks were visited by Financial Regulator staff, posing as customers wishing to switch their main current account from another bank. The mystery shopper rated each branch to be satisfactory or unsatisfactory, taking into consideration the accuracy of the information provided, the helpfulness of the bank assistant, the bank assistant's awareness of the switching process and the provision of a switching pack.
The main reasons for branches being deemed unsatisfactory were that switching packs were not referred to or provided in some cases, that shoppers were not encouraged to use the switching process by virtue of the information provided; that staff were unable to provide sufficient information on how to switch accounts and that some shoppers were actively discouraged from using the process.
"The framework is supposed to facilitate ease of switching and it is clear that the banks must improve their approach to switching," said a spokesperson for the Financial Regulator.
The Irish Banking Federation (IBF) expressed disappointment with the results of the Financial Regulator exercise and said it was fully committed to working with its member banks in improving awareness levels about the account switching process among frontline staff in branches
It said it has written to all of the subscribing institutions to remind them that the provision of customer information is a requirement of the IBF code of practice.
“While we welcome the fact that 59 per cent of bank branches visited were found to be satisfactory, it is disappointing that as many as 41 per cent were deemed to be unsatisfactory”, said Eimer O’Rourke, IBF’s head of Retail Banking.
“It will always prove challenging for banks to attain a 100 per cent record, but the sector must make every determined effort to do better than this,” she added.
