DUBLIN – The interpretation of Irish banking has diverted tremendously. Natwest which operates in Ireland under Ulster Bank claimed that it is shutting down its operations a couple of weeks ago. KBC Ireland was noticed talking about selling its loan book and led towards the exit.
This movement could leave only three financial institutions in the Irish market eventually. Two prominent players in the bank of Ireland, Permanent TSB, and AIB, facing warnings about the state of bank competition across the country. During all this, financial technology (fintech) upstarts at its tip-toes with venture capital funding, for example, N26 and Revolut, to evolve at a swift pace in the market. Revolut has uplifted approximately 1.3 million users all across Ireland, while on the other hand, N26 has boosted almost 200,000 users across the country.
The chief operating officer at N26 of Germany which is a completely regulated bank itself, Adrienne Gormley, is conscious of these tremendous conversions and alterations which proved to be revolutionary to the market. She affirmed that,
“First of all, we consider it as an opportunity, while the Ulster Bank news was possibly on the cards for the time being. I believe that people were surprised after the KBC announcement.”
This might provide prodigious opportunities but this leads us to the question that what problems, as well as challenges, are extremely frequent in the Irish market that the two main financial institutions will get rid of and leave?
“During our analysis of what is actually going on and why others are leaving, we still need to keep an eye on our potential customers and focus on evolving customer demands in the market. We need to come across the answer to the question: are others leaving because they have to have a grip on a lot of capital?”
The popularity, as well as the emergence of digital banking, is playing a pivotal role in reshaping the dimensions of banking all across the globe, especially after the pandemic of COVID-19 when everything was prone towards digitization at a swift pace. Bank of Ireland announced its plan during the initial months of the year to shut down 103 branches across the country. SEO Francesca MacDonagh claimed that the conversion and acquisition of online services was the major reason for that decision. The arrival of fintech competitors and the emergence of digital banking has reshaped the dimensions of the banking market in Irish. This leads us to a very serious question: what this actually means to potential customers?
Financial Transactions via Synch App
Neo banks or fintech operators have taken the acquisition in instant payments and left numerous incumbents figuring out how to claw back the market share. An alliance of Irish banks which includes Bank of Ireland, AIB, KBC, and Permanent TSB for the time being, are striving to attain the customer base with their own applications. The application which is titled Synch will permit instant financial transactions among accounts and each of the banks.
The financial infrastructures shufti pro which are involved have been tightly lapped on the project, professor of finance at Dublin City University, Michael Dowling affirmed that the prospects give a boost to a few of the warnings on the competition.
According to Dowling’s opinion, the Synch app seems like a closed shop where the financial institutions want to set up such a system where they can effortlessly exclude others from their payment network. Furthermore, he said that mechanisms for example SEPA Instant already reside for the banks situated in Europe to carry out instant transactions and payments.
The Synch app proposal from the bank is presently sitting with Ireland’s Competition and Consumer Protection Commission. An early filing by financial institutions was rebuffed by the regulator because of the lack of details. Shortly afterward, a second filing was made. An industry group called The Banking and Payments Federation Ireland was harmonizing with the efforts of Synch with banks’ decline to the opinion, citing the CCPC procedure.
What To Expect In The Future?
One thing that might have been cornered by fintech companies is instant transactions and payments, but the question regarding the future of mortgages and long-term lending is still revolving around the head of people. N26 has sheared into lending in other markets but it has not yet brought those services and solutions to Ireland.
Gormley claimed that,
“As we are a completely licensed bank that’s why it is interesting for us to understand what might be a product suite that can possibly work in the Irish market. From the news of KBC and Ulster Bank, we notice a very drastic shift in Irish banking. We now have to pay strong attention to what and how we provide to the Irish market.”
Dowling affirmed that the overview of the competition which is progressing in the Irish banking market seems exposed to the decreasing number of financial infrastructures. However another relative intruder among the fintech startups, Starling Bank is pursuing its banking license with the central bank of Ireland.
Dowling declared that,
“I believe that there is not any possibility of another financial institute to pop up. Regulations are required for the prevention of monopolistic behavior among those financial institutes which are left.”
Moreover, Dowling also claimed that there exists no such competition. There are only three financial institutions and that’s it. That was the only point when regulations were required to come in and think creatively to resolve this issue and come up with an effective solution. That’s the only revolution we are looking for because there is not an external savior which would be coming in a few of the fintech firms might develop but the only thing which is required right now is an enforced competition.
