Central Bank urged to extend Ulster Bank and KBC withdrawal timelines

The Financial Services Union (FSU) has urged the Central Bank to order Ulster Bank and KBC Bank to extend their timelines for leaving the Irish market until the end of 2023 to give customers enough time to set up accounts at a new bank.

The call comes amid mounting concerns for the wellbeing and welfare of banking staff who are attempting to resolve the frustrations of Ulster Bank and KBC Bank customers.

“It does not take much understanding of the sector to know that the exit of two retail banks would overload an already creaking system,” FSU general secretary John O’Connell told the Oireachtas Finance Committee on Wednesday.

“We have growing concerns for the health and safety of staff, faced every day now with customers frustrated because they cannot open accounts on demand,” he said, adding that staff resilience was “waning”.

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A survey commissioned from polling company Ireland Thinks found that 88 per cent of bank staff feel stressed at work either on a regular or very regular basis, while 73 per cent say their workload has increased due to the exits of Ulster Bank and KBC, and 87 per cent say their departments or branches are short-staffed. This rises to more than 90 per cent in the case of AIB and Bank of Ireland.

Some 87 per cent feel staffing difficulties have led at some point to bad customer service. When asked what arrangements are put in place to resolve short-staffing issues, the predominant answer was “none”, Mr O’Connell said.

“These results should not be tolerated in any sector, but when the State is a shareholder and the sector is regulated by the Central Bank, these results should act as an urgent call to action for both.”

The pressure on the system comes as KBC Bank Ireland is set to give customers up to six months to close their current accounts following the receipt of an account closure notification letter, which it will begin issuing in June. It originally set a timeline of 90 days. Ulster Bank began issuing closure notifications with a six-month notice period in April.

The FSU, which believes these timelines are unrealistic, is calling for the establishment of a taskforce to co-ordinate an agreed implementation plan that will give clarity on both staffing levels and the rate at which accounts are being closed and switched on a weekly basis. It also wants a reversal of the reductions of call centre opening hours made during the pandemic.

Mr O’Connell said it was hard to quantify the number of staff working on account switching. Although the banks are “definitely recruiting people”, the level of employee churn is “unclear”. He described the making permanent of supposedly temporary reductions in call centre hours during the Covid crisis as “one of the most cynical moves” by the industry that had led the Central Bank to identify customer wait times of up to two hours, with up to half of customers abandoning calls.

“Put yourself in the shoes of someone working in that call centre who receives that call from any of us after we have waited two hours. It is not going to be a pleasant exchange, but that’s their exchange every day. That’s why we have concerns in terms of mental wellbeing.”

The exit of the two banks is being used as a “Trojan horse” by the remaining banks to force people to use digital platforms rather than branches and call centres, he said.

Labour TD and finance spokesman Ged Nash, a member of the committee, said the FSU had been “absolutely right” to date about the workloads that would be created by the withdrawal process, while Fine Gael TD Bernard Durkan said wait times for customers trying to contact call centres were “utterly crazy nonsense” that would not be tolerated in other countries.

Mr Durkan also highlighted the removal of the ATM from Leinster House, a matter he raised in a written question to Minister for Finance Paschal Donohoe earlier this month.

“ATM machines have been closed down all over the country, but worst of all is the insult that the ATM machine in the Houses of the Oireachtas has been closed down, and they didn’t have any consultation with the members of the Oireachtas… instantly, it was gone,” Mr Durkan said.

“Of course the people we represent throughout the country have no chance at all if the Houses of the Oireachtas are going to be treated in that fashion.”

Paperwork

Electric Ireland later told the committee that 4,000 customers of Ulster Bank and KBC Bank have so far updated their direct debits with the energy supplier. However, up to 86,000 electricity and gas accounts, relating to almost 65,000 residential and commercial customers, are paying through KBC Bank or Ulster Bank and will need to amend their details.

In a normal year, Electric Ireland handles 2,000 direct debit amendment forms, said Marguerite Sayers, executive director of customer solutions for ESB. “We would consider this to be our typical or business-as-usual switching activity,” she said.

This points to a large upswing in paperwork to come. To date, 25 per cent of departing Ulster Bank or KBC Bank customers to have amended their direct debits with Electric Ireland have used the Central Bank’s paper-based switching code which, Ms Sayers said, was not designed for “bulk switching activity”.

There is “a risk” that customers may not inform it of their changed banking details in a timely manner, Ms Sayers said.

“Electric Ireland want to assure the committee members that we will be firmly focused on ensuring that there are no energy supply related interruptions as a result of the departure of KBC and Ulster Bank.”

Sinn Féin TD and finance spokesman Pearse Doherty said he didn’t understand why, more than a year after the exits of the two banks were confirmed, there wasn’t a more seamless switching code and the situation was that “thousands of forms” would be sent to Electric Ireland and multiple other direct debit originators in a concentrated period of time.

“We’re talking about possibly millions of forms, paper, envelopes, to be hand-filled, processed, posted back. It’s just crazy stuff,” he said.