Small and medium-sized firms (SMEs) that are customers of Ulster Bank and KBC Bank Ireland are being urged to take action on moving bank accounts, after Central Bank figures last week showed that 80 per cent of business current accounts in both banks at the start of the year remained open at the end of October.
The number of SME and other non-household current accounts fell just 20 per cent to 51,542 across the two exiting banks. Meanwhile, within the total, the number of main business accounts declined by only 20 per cent to 23,011 between July and October.
“Today we are urging businesses who have yet to take action to do so as soon as possible and engage with their new banking provider, particularly given the account transfer process can be a longer and more complex process for business customers than it is for personal customers,” said Banking & Payments Federation Ireland (BPFI) chief executive Brian Hayes.
[ Ulster Bank customers need to take action to switch accounts now - BPFI ]
“While some businesses may just require a straightforward account with an online business banking capability and perhaps a deposit account, more businesses will require cash management facilities or payment facilities. Of particular importance for a large portion of businesses is to ensure that credit facilities such as overdrafts, loans or credit cards are put in place, as these do not automatically transfer to a new provider and may require some time to establish.”
More than 63,000 business current accounts have been opened across the remaining banks so far this year. The figure includes accounts that would ordinarily be opened in a given year by existing customers as well as businesses transferring accounts from Ulster Bank and KBC Bank Ireland.
[ Over 60% of Ulster Bank and KBC Ireland accounts remained open by end of October, Central Bank says ]
There is also typically a lag between consumers setting up new accounts and closing existing ones, as they seek to make sure that new details for the likes of direct debit mandates, standing orders and inward payments are working properly.
Ulster Bank started to freeze accounts last Friday, seven months after giving an initial wave of customers notice to find alternative homes for their banking. It has initially focused on closing about 3,600 accounts that have been inactive for some time or have low levels of monthly transactions. KBC Bank Ireland will start freezing accounts from December.