Switching of current accounts moribund, report finds

Less than 5,400 of the Republic’s five million current account holders switched provider in the first half of the year, according to a new report from the Central Bank.

A virtually moribund switching market would suggest that banks will continue to be able to impose higher fees and additional charges without consequence.

While the Central Bank accepted that switching levels under the switching Code remain low there is evidence that switchers are opting for providers offering more competitive fees and charges. It also found that 99 per cent of the number of switches completed under the Switching Code were finished within the timeframes prescribed by that Code.

The report shows that the level of competition in the current account sector has decreased from nine providers in the middle of the last decade to just six today while the number of people who hold current accounts is also in decline.

The number of current accounts in the Republic fell from over 5.4 million in 2013 to a little under 5.3 million in the middle of the summer. While the account numbers are decreasing there has been an increase in account values.

Complaints on current accounts represent less than 1 per cent of the overall current account numbers but still made up the largest number of banking complaints and the numbers of such complaints has increased.

All told there were more than 40,000 complaints made to Irish banks by current account holders in the 12 months to the end of June compared with just under 33,000 over the preceding 12 months.

More than half of the complaints involved issues to do with the administration and processing of account information while just over 9,000 were connected with fees and charges and just under 5,000 were connected to concerns over poor customer service.