She left AIB to start her own bank, having felt that customers wanted something different to what they were being offered. But, given the inertia in the Irish market, can Anne Boden’s new pretender Starling bank usurp the incumbents – including her old employer – with her new digital-only banking offering?
Irish consumers are slow to change. Figures last year from the Central Bank showed that just 3,600, or 0.06 per cent, of the State’s 5.2 million banking customers switched their current account in the first half of 2016.
And it’s not that there aren’t better deals out there. It’s impossible to avoid a quarterly fee with Bank of Ireland for example, which means that switching to another bank with a free banking offer will undoubtedly save customers. Yet according to the bank’s latest annual report, current account balances continue to rise, up by 11 per cent on 2015.
So if we’re not switching, how will the entrants win enough business to make it worth their while coming into the Irish market?
While Irish people may be statistically unlikely to switch, they may be likely to open a second current account for a trial period. If you don’t have to pay fees on the new account, it will encourage some banking customers to conduct some of their banking activities on it. The fact that you have to pay stamp duty per credit and debit card may encourage people to make the switch sooner rather than later, however.
London based Revolut, for example, says it has already signed up some 30,000 Irish consumers with its app-based mobile banking account, while Berlin based N26, which was awarded a full European retail banking licence last year, said in February that it had already signed up about 10,000 Irish customers.
And it may not be existing banking customers that the start-ups are banking on. So-called digital natives are used to doing everything with their phones. They’re also used to paying as little as possible for everything online related – so why should banking be any different?