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Sasko Lazarov

Banks 'ill-prepared for the biggest logistical challenge in Irish banking since the euro'

Concerns have been raised that the exits of Ulster Bank and KBC Bank could be “the perfect storm” for the remaining banks.

EXITING IRISH BANKS should not write to their customers about switching service providers until all stakeholders are “satisfied” that there is a “robust” plan in place to manage disruption, the Financial Services Union has said.

Both Ulster Bank and KBC Bank are currently in the process of winding down their operations in the Irish market.  

Last week, Ulster Bank announced that over the coming weeks, it plans to start writing to its over 900,000 personal account customers, giving them six months’ notice to choose a new provider, switch over and close their old accounts.

Letters and emails will be sent out to the bank’s roughly one million personal banking customers “on a phased, rolling basis, to give them six months’ notice”, the bank said in a statement on Wednesday.

Bank of Ireland, AIB and Permanent TSB are all anticipating a very rapid uptick in the volume of former Ulster Bank and KBC customers looking to change providers over the coming months. 

But across the market, customers are already noting longer-than-usual waiting times for appointments with their local institutions.

Recent cutbacks, branch closures and ensuing “poor service levels” in bank branches across the country could create “the perfect storm” for Irish banks and their customers, said John O’Connell, General Secretary of the Financial Services Union (FSU).

“Since the introduction of the euro, I think this is the biggest logistical change in the history of Irish banking,” he told The Journal.

“You have 960,000 Ulster Bank accounts and you have over 300,000 accounts in KBC Bank. It has the makings of a perfect storm.”

Among other things, customers switching banks may need to transfer over all of their existing direct debits to their new account provider for data protection reasons, O’Connell said. In a worst-case scenario, customers could be left “unbanked”, O’Connell added, if they close their existing accounts with one of the outgoing banks, only to be left waiting to open an account with a new provider due to delays.

It comes in the same week as the Financial Services Ombudsman published its 2021 Overview of Complaints. It revealed that a quarter of all complaints — and 28% of complaints received about the banking sector specifically —  related to customer service last year.

Banks currently operate a “lean staffing model”, O’Connell said, which could leave branches vulnerable over the coming months.

“What Covid exposed was that when anything happens in a branch [like an outbreak of the virus], they have to close the branch, move the branch staff to another branch and so forth.”

Bank of Ireland has significantly reduced its physical network over the past couple of years in a bid to cut costs, closing down 100 branches and shaving 1,700 jobs with a voluntary redundancy scheme.

AIB closed just 15 branches but is in the process of cutting 1,500 jobs through voluntary redundancies.

Against this backdrop, O’Connell said there is huge potential for disruption and expressed concern about the strain being put on staff.

“Our feedback from our members on the ground is that customers are already extremely frustrated and that they’re feeling the brunt.”

If you put yourself in the shoes of somebody working in a bank — in a call centre, for example — and I’m a customer waiting two hours and I have to have a conversation to resolve some issue, after two hours I’m not going to be a pleasant person when I get on to talk to that employee. It’s just human nature. 

O’Connell added, “The Irish Banking Culture Board have done two surveys, that show staff working in banking suffered significant stress levels. That is now going to be exacerbated.

“We’re very concerned.”

In response to questions from The Journal, a spokesperson for Bank of Ireland said the lender is “delighted to welcome new customers”.

They added, “We’re committed to making the process as easy as possible for customers moving to Bank of Ireland or opening an account for the first time.  We are also providing targeted support for customers who require it at this time through our Vulnerable Customer Unit.

The departure of Ulster Bank and KBC from the Irish banking sector is unprecedented in Irish banking.  In addition to the strong and supportive role that we will play over the coming period, minimising disruption for customers who will be changing banks will also require the collaboration of multiple stakeholders across the economy including utility companies, Government Departments and agencies, and employers.

In a statement, a spokesperson for AIB said, “AIB is keen to welcome customers of KBC and Ulster Bank who are looking for a new banking home.”

On the issue of wait times for appointments, the spokesperson said, “Depending on the branch location selected, wait times for account opening appointments can vary. 

“In support of customers in those locations where particularly high demand is being experienced, we have increased the number of account opening appointments available by offering weekend appointment times.  We are also in the process of allocating substantial additional resources and staff to accommodate the increase in customers looking to open an account with us.”

Central Bank

Questions around how prepared banks are for the changes were also raised in the Joint Oireachtas Committee on Finance last week, following recent comments by Colm Kincaid, Director of Consumer Protection at the Central Bank of Ireland.

Speaking on RTÉ News in March, he said the banks “are not yet where they need to be” in preparing for the surge in customers as Ulster Bank and KBC head for the exit.

“It is a very significant exercise that they need to put resources into and do well, and I think they are not yet where they need to be, but I do know there is a lot of work going on in the institutions to get to that,” he said.

At the time, the Banking and Payments Federation of Ireland (BPFI) — the main lobbying group for the Irish banking sector — described the challenge as “an unprecedented event” in Irish banking history.

BPFI Chief Executive Brian Hayes said, “It will require the participation and support of multiple stakeholders across the economy, including the banking industry, the regulator, utility companies, Government Departments and agencies, and employers working together.” 

“BPFI and its member banks are already working intensively together as an industry as well as with stakeholders across the economy, to assess and plan the unprecedented task of transferring millions of accounts and direct debits of personal and business customers across the economy.

Asked about preparedness levels, Central Bank governor Gabriel Makhlouf told the Oireachtas finance committee last week: “Everybody in the Central Bank but also in the other institutions is fully aware of the importance of getting this right.

“I wouldn’t say that everybody’s ready by any stretch… but what I can also say is that we are fully engaged with the institutions on this. And to be fair, I think they are fully aware of the scale of the challenge that they have, and they know their obligations as well.” 

The FSU’s O’Connell told The Journal that the union would like the Central Bank to step in and tell exiting banks that they should not proceed until all stakeholders are satisfied.

“Everything at the moment is pointing to there being significant difficulties,” he said.

“We don’t want any letters issued to customers until such time as the Central Bank and the other stakeholders — including ourselves, the consumer bodies and so forth — are satisfied that there’s a robust plan in place to manage it in a way that isn’t disruptive to consumers.”

For information about how to switch your bank account, you can follow this link to the Competition and Consumer Protection Commission’s website.

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    Mute FacelessJuniorDoctor
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    Aug 8th 2020, 7:57 AM

    We have some of the least doctors per capita in the EU but despite this many of the doctors who came back from Australia to help are going back again because they weren’t offered permanent positions! Back to the status quo of dangerous understaffing & mammoth waiting lists it is….

    317
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    Mute Joe
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    Aug 8th 2020, 9:06 AM

    @FacelessJuniorDoctor: and one of the youngest populations!

    38
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    Mute Jonathan Regan
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    Aug 8th 2020, 9:14 AM

    @FacelessJuniorDoctor: Scheme/permanent jobs are highly competitive here. Hardly fair to give these automatically to people who came back from Oz over those who’ve worked here for years.

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    Mute Aaron O'Leary
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    Aug 8th 2020, 9:15 AM

    @Jonathan Regan: We literally asked them to come home and promised them jobs..

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    Mute Jonathan Regan
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    Aug 8th 2020, 9:23 AM

    @Aaron O’Leary: didn’t promise them Scheme/permanent jobs which seems to be insinuated by OP.

    23
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    Mute Aaron O'Leary
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    Aug 8th 2020, 9:26 AM

    @Jonathan Regan: ah fair. However Harris did mention permanent contracts when he put out the message and in fairness they didn’t even get part time work. It was a joke, it’s embarrassing really. Remember cringing when I saw the ad for it thinking “how’s this clown gonna mess this one up now”

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    Mute FacelessJuniorDoctor
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    Aug 8th 2020, 10:50 AM

    @Jonathan Regan: take your point. But as you know none of us have permanent jobs – they could have given them a non scheme year. Taken the opportunity to grow the workforce when it was actually there and time to plan for the expanded numbers next year.

    20
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    Mute Dave Harris
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    Aug 8th 2020, 12:16 PM

    @Aaron O’Leary: Many people think Harris did a good job because he repeated what the medical experts said and he put on his concerned smacked bottom face. This is another example of his ineptitude

    21
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    Mute Ciara Ní Mhurchú
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    Aug 8th 2020, 5:38 PM

    @Dave Harris: You have a problem with Harris because he listened to medical experts regarding a medical pandemic!?

    7
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    Mute Sinead Ni Coscraigh
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    Aug 8th 2020, 8:12 AM

    They left because there was no work for them, we got into bother put out a call for them to come HOME and help us !!! They answered that call and rushed home to help us. And now we are telling them that we dont want them anymore so they can go away again !!! What kind of way is this to treat our own ?? Shame on us for allowing our government to treat our brothers,sisters,sons,daughters,friends and fellow citizens like this !!!

    305
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    Mute Joe
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    Aug 8th 2020, 9:08 AM

    @Sinead Ni Coscraigh: so you want to give them jobs just for the sake of it. Our hospitals are currently functioning way under their capacity as everything has been cancelled and people aren’t presenting.
    If the government gave them jobs you’d be moaning about the waste of resources.

    33
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    Mute Aaron O'Leary
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    Aug 8th 2020, 9:17 AM

    @Joe: our government quite shamelessly begged them to come home and promised the jobs

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    Mute Ash Jordi
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    Aug 8th 2020, 9:25 AM

    @Joe: The government implored Irish medical staff to come home as an act of patriotism and many upped sticks and came leaving their jobs behind. Now they are jobless and unable to receive any welfare payments from the state that asked them home. It’s an absolute shame to treat our citizens who answered the call in this way

    64
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    Mute Aaron O'Leary
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    Aug 8th 2020, 9:28 AM

    @Ash Jordi: don’t bother it’s another FGFF spin bot

    23
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    Mute NotaWarder
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    Aug 8th 2020, 10:15 AM

    @Ash Jordi: they seemed to think that covid had been beaten and were able to proceed with forming a government and getting on with their merry lives.
    This will come back to bite them when the second wave hits.

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    Mute Rory J Leonard
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    Aug 8th 2020, 10:34 AM

    @Ash Jordi:

    These trusting, naive medical professionals must learn for this harsh experience and in future demand a zoom interview from Oz with potential employers in their homeland and a signed contract if successful, before they hand in their notice to local caring employers.

    20
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    Mute Aidan O' Neill
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    Aug 8th 2020, 8:07 AM

    Least amount if doctors but highest spend per capita on the health service. All that money going to overpaid pen pushers.

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    Mute Jane
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    Aug 8th 2020, 9:02 AM

    @Aidan O’ Neill: you’re not allowed to say that. You are not allowed to question the hold the public service unions have in this country.

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    Mute Donal Desmond
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    Aug 8th 2020, 9:27 AM

    @Jane: Unfortunately the unions have been far too lax especially during the leadership of Begg and O’Connor. Where did all the patients on trolleys go when the pandemic struck… According to Harris there was no money… The same Harris who threatened striking nurses with fines if they did not return to work…again no money…Hypocrisy at it’s best.

    56
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    Mute Micheal S. O' Ceilleachair
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    Aug 8th 2020, 8:42 AM

    It’s the Applaud and Abandon method. Even the Applaud bit is now gone. Why would nurses make themselves available in such circumstances?

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    Mute AOL
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    Aug 8th 2020, 8:16 AM

    A disgrace

    70
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    Mute Michael Patrick Newell
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    Aug 8th 2020, 9:59 AM

    Wish we could drive some of the over paid hse management and paper pushers out of the country like we do doctor’s and nurses

    70
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    Mute Paul
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    Aug 8th 2020, 8:35 AM

    The mind boggles

    31
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    Mute Seeking Truth
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    Aug 8th 2020, 9:27 AM

    There are many highly qualified non-Irish doctors in this country who cannot get registered with the HSE, are not allowed to take on medical card patients and are paid half the fees of registered GP’s for working SouthDoc. Yet GP’s around the country are suffering greatly and SouthDoc is becoming a “regular clinic” for those who cannot become a new patient at a regular GP and has no capacity for real after-hours issues.
    These non-Irish doctors need to be recognised and registered by the HSE and a huge problem could be solved!

    26
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    Mute Maria Quinn
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    Aug 8th 2020, 9:47 AM

    @Seeking Truth: true, non EU qualifications and non evidence of minimum level of English require to perform the job.
    These people are in the process to sit English exams and then the access to the course to level prior learning/ qualifications. They only could step in as volunteers … Are any data about this?

    10
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    Mute Ciara Ní Mhurchú
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    Aug 8th 2020, 5:42 PM

    @Seeking Truth: So employ doctors who do not speak the language and whose qualifications are not up to the same standards as our own?

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    Mute Alan James Dunne
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    Aug 8th 2020, 11:48 AM

    Spoke with a friend last night who reregistered as a nurse as she felt obliged to help out with her experience. She worked between two of Dublins main hospitals for 6 weeks. After initially being told she would only be charged €100 to reregister she was actually charged the full €350 fee.
    Ended up teaching on how to use ventilators but had to supply her own PPE as it was non exsistent.

    22
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    Mute John John
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    Aug 8th 2020, 9:29 AM

    It’s a scamdemic

    27
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    Mute Thornto84
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    Aug 8th 2020, 8:32 AM

    Not a chance this government will do something like that, it seems like it’s easier to blame the Irish people for everything during this and we are bigger fools for going along with it and arguing among ourselves about masks and everything else Covid related

    47
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    Mute Eamonn Tierney
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    Aug 8th 2020, 1:22 PM

    This issue is not making headlines at the moment with Covid 19 but will in the near future where those in “the pool” will be desperately needed on the frontline again

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    Mute Maria Quinn
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    Aug 8th 2020, 9:35 AM

    Yes, that recruitment campaign was a bit weird. PAS had three panels formed for adminstrative positions, Executive and Clerical. The temporary clerks panel was formed in January. You would have thought the Government would have taken people from this panel to assist the HSE but they didn’t. Then the government shutdown most of the departments’ services and redeployed the staff to assist the Welfare to process the PUPs. This is a task of HR and Accounts teams.

    So three large recruitment with people ready to work were paralyzed. People were “laid off” before starting, date of commencement delayed, they said but without any provision. Three – five months sitting in home; with lose from income of about €1000 per month; and the uncertainty, the jobs in Public Services are the first cut for paying off all the pandemic allowance to employees, employers and businesses
    And then the departments began to have time for their people, and began to call the people with date of commencement delayed …. it came an unfairness, people with lower score, below in the panel list, behind others … commenced to work earlier, gain full salary earlier, only for being assigned to one department and not to another

    Hopefully lessons will be learnt from this emergency. The Public Services was ready for this unprecedented emergency but the politicians failed …. as usual their perception of the public service staff is like – I take the money for the pups from the wages of my people-

    8
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