Bank will be lucky if it can overcome inertia of the public

Analysis: Texting customers before they go into the red and when their salary has been paid into their account may be a cute gesture from a bank, but will it really help "change the landscape of banking" in Ireland?

National Irish Bank (NIB), which yesterday unveiled details of its new personal banking offering, thinks it will.

The bank celebrated Easter by completing its move to the technology platform of Danish financial institution Danske Bank, which bought NIB and Northern Ireland's Northern Bank from National Australia Bank last year.

If it is to justify its part of the €1.4 billion price tag, the €70 million change programme and a further €20 million investment announced yesterday, NIB will have to boost its market share significantly. Yesterday it said it was aiming to more than double its slice of the current account action to 10 per cent over five years. NIB chief executive Andrew Healy maintains there is room for the bank to grow, pointing to switching rates in Denmark that are 10 times higher than here.

But while its television advertising campaign may be filled with commercial actors desperately seeking a bank that speaks to them, NIB will be lucky if it can overcome the "inertia, fatigue and cynicism" of the general banking population.

Chipping away at the dominance of AIB and Bank of Ireland will not be easy. The marketing activities of the smaller players have forced both banks to offer free banking (albeit in limited circumstances), giving their customers less incentive to leave.

And it could well prove that any frustrated AIB or Bank of Ireland customers who were going to leave have already done so, migrating to the welcome embrace of Permanent TSB and Ulster Bank.

NIB, on the other hand, once described its existing Freebank account as its "best kept secret".

All of the main banks now offer free banking of some kind, with the exception of Bank of Scotland (Ireland), which has yet to launch its current account or open more than a handful of branches.

NIB yesterday dismissed the "ambitious claims" of its rivals as lacking real impact. It is distinguishing its offering by packaging together current accounts with credit cards and pre-approved overdrafts that have the lowest interest rates in the market.

The bank already offers the ultimate all-in-one financial package, the offset mortgage. However, the product is thought of as a niche offering with limited appeal. The bank is competitive on mortgages, although its focus to date has been on switchers and not first-time buyers.

It did not elaborate on its business banking package, but promised that small and medium enterprises (SMEs) would be "treated like corporates".

Yesterday's briefing opened with a video presenting the case for Danske Bank's omnipresence: the group has over 3.5 million retail customers. Its acquisitions in Sweden and Norway resulted in those banks increasing their market share from about 3 per cent to 9-10 per cent. If NIB cannot achieve the same in the Irish market, it could quickly become Danske's weak link.