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Smoothing the process for SMEs switching banks

AIB has been working with thousands of business customers around the country to establish new banking relationships as seamlessly as possible

The exit of two banks from the Irish market has seen AIB working with thousands of customers around to country to establish new banking relationships with the emphasis on making the process as quick, easy and seamless as possible. “We are very conscious of the fact that the customers didn’t choose this,” says John Brennan, head of SME for retail banking with AIB.

“This is a headache they could have done without,” he continues. “They are very busy running their own business and don’t want to spend time on setting up new bank accounts. Also, many of them have had long-standing relationships with their banks and it’s quite difficult to leave that behind. We want to establish long-term relationships as well and work with them to help build a sustainable future for their business.”

AIB opened 420,000 new accounts up to the end of November 2022, 382,000 of them for personal customers and 38,000 business accounts. “We are now heading for three million customers,” notes Brennan.

A significant proportion of the 38,000 new business accounts is the result of migration from exiting banks. “New business account openings have been running at double what we would normally do during the year and in September and October it was three times the normal level,” Brennan points out.

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Planning ahead

The bank anticipated that uplift in activity. “We had been planning for the exit of the banks and the impact on customers,” he explains. “There has been quite a degree of collaboration on it across the industry and we have been working with the regulator as well. We have hired 600 temporary staff to work with our new customers. They are working in branches, call centres, and on back-office activities like regulatory checks, credit assessments and so on.”

We want to establish long-term relationships as well and work with (customers) to help build a sustainable future for their business

Technology has also played a role. “We have invested in significant technology enhancements. Our mobile banking app has been upgraded to allow people open accounts from the comfort of their own home or office. People can also interact by phone or by secure email and we can send documents to them for digital signing.”

AIB’s nationwide branch network is very important. “It helps that we have a physical presence in about 95 per cent of the places where the exiting banks were located. That has stood us in good stead. While more than half of the new accounts were opened digitally, a customer can walk into one of our branches and more than likely open an account that day. They can also make an appointment to see someone in the branch if they want to discuss their business needs in more detail. We are offering customers a real choice in how they want to engage with AIB.”

He points out that the average wait for an in-person branch appointment is just seven days with 100 per cent of new customers being seen in four weeks or less.

Those face-to-face engagements can be very useful. “Opening a new business account can be more complex than the process for a personal account,” Brennan explains. “Businesses can have multiple accounts, there can be multiple directors on an account, they can have lots of direct debits set up for suppliers and other services. They might also have credit facilities like overdrafts, loans, and credit cards and these do not automatically transfer to a new provider and may require some time to establish. We work with our customers to understand their business and its needs. We want to build long-term relationships with them and help create a sustainable future for their business.”

This complexity is seeing many customers adopting a phased approach to account switching. “The data shows that many of them are maintaining the relationship with their old bank while they switch over to AIB. They are taking control of their finances and moving direct debits over a period of months and making arrangements for overdrafts and credit cards and so on over time. Once they are happy that everything has been done, they close the old account.”

AIB’s focus is on making that process as easy as possible. “Business account opening is not always simple. There are regulatory obligations to be met, for example. We try to smooth the process by ensuring our forms are as straightforward as possible and by allowing customers complete them in their own time and digitally sign them and send back to the bank. We carry out the various checks in the background and make the overall experience as quick and seamless as possible.”

Family enterprise

One business which has switched to AIB is free-range egg producer LS Farms. Based in Clenlough, Smithboro in Co Monaghan and owned by Sinéad and Laurence Hughes the company provides free-range eggs to Greenfield Foods, which supplies supermarkets, wholesalers, and food service outlets around the country.

The business dates back to 1992 when Sinéad and Laurence established a poultry business on 22 acres of land. Unfortunately, their main customer went bankrupt in 1998 and they were forced to close. In 2008, they decided to go back into business and built an 8,000 bird free range poultry house.

Our mobile banking app has been upgraded to allow people open accounts from the comfort of their own home or office

It’s very much a family enterprise. “Our three children help out,” says Sinéad. “Ryan works with Mercury Engineering during the week and helps out in the business when he is home at weekends. Lauren is studying nutrition in Sligo and loves getting the wellies on to help. Niamh is studying to be a vet and also has a big interest in the business.”

In 2015, they decided to expand the business and bought an additional 22 acres of land nearby with a plan to build another poultry house on it. Delays during the planning process meant that it took until earlier this year to get permission to move ahead with the project. They had originally planned to get a loan from Ulster Bank to finance the construction work but that was overtaken by the decision by the bank to exit the Irish market.

“When the news of the bank’s closure came, we went to AIB,” says Sinéad. “First to Agri Advisor Barry Hyland. And Leo Costello, the business manager in AIB got the loan for us. He has been a great help. We spoke to him about our plans, and he put his faith in us and said he’d give it a go.”

“We were very lucky in getting Leo Costello,” Laurence adds. “He was very encouraging and helped to ensure the process was very easy and smooth. If we had any issues at all we were able to call him. In fairness, we have had no problem with any aspect of our dealings with AIB. We started to put birds into the second house in December and it’s in production now.”

This is the experience that AIB aims at for all its business customers, according to Brennan. “We are a customer first organisation, and we want to work with our business customers to build mutually beneficial relationships. What we are finding is that our new business customers are not just discussing their existing needs. They are talking about things like succession planning and pensions as well. This opens up new opportunities for them to work with AIB to support the future success of their business.”

For more information visit aib.ie/business/business-accounts