Liam Croke: barnacle or butterfly - which one are you?

I couldn’t help think of that great Queen classic, Another One Bites The Dust, last week when ACC and Danske Bank announced their withdrawal from the Irish market.

I couldn’t help think of that great Queen classic, Another One Bites The Dust, last week when ACC and Danske Bank announced their withdrawal from the Irish market.

They have followed the likes of Anglo, Irish Nationwide, Halifax and Postbank, leaving us with very few choices to do our day-to-day banking with.

This really is not good news because it could pose a problem for us all, leaving us at the mercy of whoever is left in the market, in particular the big two: AIB and Bank of Ireland.

They have the lion’s share of the current account market in Ireland and where you have two dominant entities in any market, it is a situation commonly known as a “”duopoly”. This typically means that the consumer ends up paying more than they would have to in a competitive market.

So, what can we do? Switch providers is the obvious answer to someone like PTSB, who are actively promoting their current account, where they won’t charge you any of those really annoying direct debit fees, or transaction fees when you lodge or withdraw money; or the most annoying fee of them all, the quarterly account fee.

Why, then, have BOI or AIB not come out to try to match PTSB’s offering? Probably because they know that, yes they will lose some accounts, but not enough to concern themselves with because they know we are more like barnacles than butterflies – we are more than likely going to stick with the bank with whom we lodged our First Holy Communion money.

Yes that’s right, research carried out recently found that about 70% of us will remain with the bank with whom we opened our very first account, regardless of what they charge us.

Is it any wonder these banks actively look to get us to open our children’s accounts with them. And do you think it is just a coincidence that some banks are on campus in universities?

They are probably not that profitable as branches but they are grooming students so that they will continue to stay with the same bank long after they leave university.

And they are absolutely right, because the very same study I just referred to found that nearly 80% of us will stick with the bank where our first pay cheque is lodged.

Complaining about bank charges is something I hear all the time from people. A sum of €0.28 cent for the privilege of lodging money into your account in a branch or €10 for setting up a new standing order and so on, but people do very little other than complain.

They don’t move their account for four reasons: (a) they don’t have the time; (b) they don’t think the effort will be worth the savings; (c) they think it will be lots of hassle changing direct debits and notifying utility providers of their new account details; and (d) some people think that their current bank will look more favourably on them if they ever look for a loan in the future because they have this relationship with them or the branch staff know them personally.

All valid reasons by the way, or should I say ‘excuses’? I always think if you had a strong enough reason why to change current account providers then you would.

I recently changed current account providers, after years of being with the same one, for two reasons. The first was non-monetary: I found my current account provider to have incredibly poor customer service. I could only put up with it for so long – boy oh boy were they bad.

A lot of people will have experience of helpdesks and know the level of service can be very poor. Another survey carried out by IBM recently found that some international banks fail to answer online customer queries, either by providing wrong answers to customer questions or, worse, providing no answer at all; I have had experience of this.

My second reason as purely for money. I was paying out €80 every three months – €320 per year in fees. This was partly my own fault because of the number of transactions on my account but the straw that broke the camel’s back, which made me make that move, was when we received our annual property tax bill for €315. So, rather than having to come up with “new” money to pay this tax, I decided that if I switched my current account, where I didn’t have to pay fees any more, then what I was paying the bank could go instead to pay my annual property tax bill.

That was the big ‘why’ I moved – and if the ‘why’ is big enough, it will make you take action.

So, what was it like moving banks? Quite simple. Under a code of conduct on switching current accounts with credit institutions developed by the Central Bank which came into effect on October 1 2010, when a customer contacts their existing bank they have to provide you with a switching pack.

In this pack is an account transfer form that you need to sign and it indicates what direct debits, standing orders etc. you wish to continue to be paid from your new provider. They send this account transfer form to your existing provider, who must then facilitate the transfer – and do so within 10 days to comply with the new code. So it’s a lot less hassle than you might have imagined.

The biggest enemies of financial well-being are inertia and loyalty. And loyalty in particular rarely pays when it comes to financial institutions and their products.

So if you continue to stay with your existing provider, just be aware you are unlikely to be getting the best deals possible.

As the saying goes, if you want loyalty, get a dog.

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