Consumers consistently look for the best deal, with competitive TV advertisements feeding this need for value. However, consumers must start considering the value in their method of payment and not just the change they receive at the counter. Irish bank accounts are subject to some of the highest fees in Europe, a lasting hangover from the Irish Banking Crisis of the late 2000s.
In an Irish Times Pricewatch article, the extent of fees associated with bank accounts in Ireland was laid bare. Conor Pope offered ways to outmanoeuvre fees of up to 10c per card transaction but also highlighted the consumer disinterest in switching to more financially beneficial options. With just 0.06% of consumers moving account providers, they continue to foot the bill for these recovering banks. While the informed consumer is looking to disrupters and banks with low fees, the majority have, as Darragh Cassidy of Bonkers.ie describes, “an unearned loyalty” to their bank. This may be volatile for traditional banks to rely on. With the rise of technology and the raised expectations of consumers, the time is ripe for disruption.
In a recent speech at the Financial Centre Summit, The Central Bank of Ireland’s Deputy Governor, Ed Sibley, discussed the shift in technology’s role within the financial industry from as an enabler of business, to something completely transforming the game. It is enabling disrupters to enter the market, with the two most popular digital banks, N26 and Revolut, rapidly growing their customer base in Ireland. Technological developments have also raised consumers’ expectations, which are being not fulfilled by traditional banks. Digital banks are bringing an alternative to Irish banking customers, not only in functionality but also in their approach to fees. In contrast to Bank of Ireland charging from 1-10c per card transaction, Revolut and N26 charge nothing. Both digital banks are putting their customers in control of their money and removing what people dislike about banking – bureaucracy and unnecessary costs.
So why wouldn’t consumers make the switch? Fear? Laziness? Banks heavily target marketing at college age consumers, offering flights or cash which seems extreme, however, the bank often earns a lifelong customer. These are the people who in 10-15 years will choose this bank for their mortgage as they have been a customer for many years and may not have the interest to look elsewhere. Irish consumers need to question the norm and realise that switching is not arduous or something to fear. Revolut and N26 allow consumers to get set up using an app within in minutes. If digital isn’t the right option, even moving banks can save consumers a lot of money in fees. The Central Bank of Ireland has regulations in place to ensure that your new account should be operational in a maximum of 10 days.
This shift to digital banking is causing a ripple effect through the business world. Be inspired by consumer banking and look to disruptors when you are funding your own business growth. InvoiceFair uses technology to disrupt traditional working capital finance, providing an alternative to businesses who want to grow rapidly. The Platform connects companies directly with capital market funders who are eager to buy their invoices and purchase orders giving them immediate access to unrestricted cashflow in 24 hours. When you are not being offered enough by the status quo, disrupt your own funding.