Central Bank reinforces consumer protection expectations in context of changing retail banking landscape

• Banks must have sufficient plans, preparations and resources in place to respond to unprecedented migration of accounts
• Key requirements include sufficient notification periods, continuity of service for customers, and focus on vulnerable customers
• Roundtable with CEOs will focus on work by banks to ensure consumers’ best interests are protected

The Central Bank today reinforced its requirements for retail banks to protect consumers amid the profound structural changes taking place in the retail banking landscape.

In the latest phase of its supervisory engagement on this issue, the Bank has written (PDF 182.69KB) to the CEOs on core issues including notification periods, continuity of service for customers, and ensuring assistance for vulnerable customers.

The Bank will convene a roundtable of CEOs focused on the retail banks’ plans to ensure consumers’ best interests are protected.

Director General, Financial Conduct Derville Rowland said: “Since the announcements by the boards of the departing banks in February and April last year, we have engaged intensively with the five banks to assess and manage the implications of the transactions. We issued our first industry letter in June 2021 (PDF 283.35KB), setting out our expectations of how consumers must be treated throughout this period of change and consolidation.

“As the process of closing bank accounts now commences, the imperative for departing and remaining banks to demonstrate that they have sufficient plans, preparations and resources in place to deliver on our expectations. “We are assertively supervising the banks to ensure they prioritise the interests of customers and prospective customers throughout this unprecedented volume of account migration.

“I acknowledge the unprecedented scale involved, and also acknowledge that staff within the banks are working extremely hard in challenging circumstances to provide customers with the services they require. We are keenly aware of the impact on both staff and customers in that regard.

“But while recognising the challenge an exercise of this scale represents, it is also clear that, in terms of the banks’ overall plans, more needs to be done.”

The departing banks will issue letters in phases with a view to managing the flow of migrations over the period 2022 into 2023.

All duties of the existing provider under the requirements of Irish financial services legislation, including the Central Bank’s statutory codes of conduct, remain until the customer has been properly on-boarded to another provider. The legislation also applies to any prospective new provider to whom that customer wishes to switch their account.
In addition to convening the CEO roundtable, the Central Bank will in Q2 2022 repeat its review of call wait times on customer support phone lines in the main retail banks. The findings of the previous review resulted in action plans to ensure the level of customer service provided on support phone lines is sufficient to manage both normal call volumes and to deal with surge events.

Separately, the banks need to engage with other service providers, including direct debit originators (DDOs), to ensure a smooth and timely switch of a customer’s account.
As a number of the top twenty DDOs are regulated financial service providers (e.g. insurance companies and payment institutions), the Central Bank has written to the CEO of each of these regulated firms (PDF 53.69KB)to reinforce their duty to take action to ensure this exercise is completed efficiently.