Bank research reveals heavy reliance on major banks

Only 1% of people here have their primary checking account with a digital bank, according to a consumer survey conducted on behalf of the Department of Finance.

While thousands of people use services like Revolut to transfer money, the fintech recently expanded its presence in the Irish market by offering a full banking service with deposit accounts and personal loans.

Other rival fintech 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.

Yet despite the growth of online-only challenger banks, the survey found that 97% of people continue to do their primary checking account through a traditional retail bank.

One in ten maintain that main current account with Ulster Bank or KBC Bank Ireland outgoing.

The proportion of the population using only digital banking is expected to rise in the coming months and years as Ulster Bank and KBC exit the market, leaving hundreds of thousands of customers looking for a new banking service provider.

Seven in ten respondents said that digital channels were their main means of contact with their bank, but only 28% of those over 65 said they were weekly users of online banking.

23% said they interacted with their bank primarily through branch visits, although this figure is significantly higher among those over 65.

Exchange rates were found to be low for all financial products, with only 2% to 5% having been changed in the last five years, depending on the financial product.

Nearly one in three said they were very satisfied with their main banking provider, with an additional half relatively satisfied and 7% dissatisfied.

More than two in five indicated that they feel the banking culture has improved in Ireland since the 2007-2008 financial crisis, but more than a quarter feel it has worsened and almost a third feel the culture has not changed at all.

The in-depth survey of 1,500 people was conducted by Behaviors and Attitudes on behalf of the Department as part of a review of the retail banking sector.

The results are published as a public dialogue event, organized by the Department, taking 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 that opens today and continues until July 8.

Interested parties are invited to participate 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 banks should implement a structured profit-sharing arrangement.

“We hear a lot about the difficulties in attracting top management in the banking sector due to the €500,000 salary cap, but little about the 23,000 employees who cannot be fairly rewarded for their work,” John O’Connell, General Secretary of the FSU said.

“Structured profit-sharing arrangements are common throughout the European banking sector and have been the policy of the European Union for 30 years,” he added.

He said such an arrangement would act as an incentive to encourage staff retention and improve productivity in the sector.

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