How switching bank may not be as simple as you think
Mary* has been a customer with Ulster Bank for 30 years.
She is a sole trader based in the west of Ireland. She is 60 and considers herself to be reasonably tech-savvy since she has a successful business, selling her products online.
All of her personal and business banking is done through Ulster Bank.
The bank is leaving the Irish market and so Mary decided to try to open a new account with another bank.
She discovered it wasn’t a straight forward process.
“I have a business account because I am a sole trader. My online shop was linked up to that. All the business was done through the Ulster Bank. It’s not a huge business, which is where things went a little bit funny when I went looking for a new bank.
“I foolishly assumed that I would be going and getting a new bank, but it’s not really as straight forward as that because rather than it being a case of you interviewing banks, it’s the other way around.
“I also have this old-fashioned, quaint human need to talk to a human occasionally. I need to be able to walk into a bank. And sometimes I even get cheques.”
She decided to open an account with Permanent TSB.
“On their website, they say you can open an account online, and you have to go through this enormously complicated business. Well it’s not that complicated but I found it complicated because you have to take a photo of yourself online and it just didn’t work out so I had to go in,” she explained.
“I went into the bank and I queued up for a long time, and there was quite a lot of people in there doing the exact same thing as me.”
“I spoke to the lady behind the counter and she said she couldn’t open an account for me there and then. She said I had to make an appointment to see the manager,” she said.
“The manager! I don’t think I ever saw the manager of the Ulster Bank in the 30 years I’ve been with them.”
“I said, ‘OK. Can you give me an appointment and I’ll come back in? and she said the earliest appointment she could give me was in April. This was in January.”
To open a new business account, Mary has to bring in a household bill, a certificate of her trading name, a signed sole trader mandate and bank statements.
When she opens her new account, she plans to set up all her direct debits and standing orders, and inform her business suppliers of the change.
“That’s a fair chunk of work to get that done,” she said.
AIB, Bank of Ireland and Permanent TSB confirmed that they have seen a significant increase in the number of customers seeking to open a new account.
Bank of Ireland said it is currently experiencing volumes above normal forecasts, around 150+%.
AIB said that depending on the branch location selected, wait times for account opening appointments can vary. The bank has increased the number of appointments by offering weekend appointment times.
All of the banks are allocating additional resources to support the big switch.
Permanent TSB is currently recruiting over 200 staff across its branch and operations teams to support the increase in customer demand.
Daragh Cassidy, Head of Communications with Bonkers.ie, advises Ulster Bank customers (and KBC customers) to set up a new account sooner rather than later since over 500,000 people will be switching accounts this year.
Can you open a bank account online or do you have to go into a branch?
“All the main banks now allow you to open an account from the comfort of your home by using your smartphone meaning you don’t have to step into a branch or make an appointment. However I understand not everyone might feel comfortable doing this, particularly older and less online-savvy consumers,” Mr Cassidy said.
“Also, if you have a joint account, you’ll usually always need to set this up in a branch. You won’t be able to do it online. And if you do need to head into a branch, it’s best to make an appointment well in advance. If you simply drop into a branch without giving any notice you’re unlikely to be seen by anyone unfortunately.”
He said once the new account is open you can then transfer over your standing orders, direct debits in your own time and then close your Ulster Bank once everything is moved over.
Will Ulster Bank help transfer your direct debits to your new bank?
“If you use the CBI Switching Code your old bank will contact utility providers on your behalf to update your direct debits,” said Darragh Cassidy.
“However you’ll still need to update your employer, social welfare, or anyone who pays money into your account about your new account details yourself as your bank can’t do this for you.”
Mr Cassidy also point out that so-called ‘recurring payments’ for things like Amazon Prime, GoMo, Spotify, Netflix, and many gym memberships will also need to be updated by customers too.
There are many payments that are easily forgotten such as the M50 toll account which will also need to be updated.
“And of course, any of your favourite online shopping sites where your card details have been saved can only be updated by you,” he said.
“In short, the Switching Code isn’t perfect and realistically you’ll often end up having to do some of the legwork yourself.”
It means it is not just banks that need to prepare for the big switch, but service providers who accept monthly payments.
The Irish banking sector has never seen such a big player exit the market or seen so many people try to switch current account at the same time.
Are service providers prepared?
“No one really knows how the banks and utility providers will hold up over the coming weeks and months,” Mr Cassidy said.
“A lot of the focus will be on the banks, but big suppliers like Eir, Sky, Vodafone, Electric Ireland, Bord Gáis Energy, Irish Life, and Avia etc are all likely to be inundated with requests by former Ulster Bank customers to have their direct debit details updated.”
“Ever since Covid, customer service levels in a lot of these companies have been lacking. So if there isn’t adequate preparation, there could be chaos frankly.”
*Mary is not her real name