The decision by Ulster Bank and KBC to exit the Irish market has caused shockwaves throughout the country. These departures will certainly change the competitive landscape. Ulster Bank announced it is to sell its performing non-tracker mortgage book to Permanent TSB while KBC is selling the majority of its mortgage book to Bank of Ireland.
Moving bank accounts
In April and May of 2022, both Ulster Bank and KBC contacted their customers to inform them that they had six months to close their accounts. Now that time is up for Ulster Bank customers.
New data from the Central Bank of Ireland reveals that as of the end of September 2022, around 854,000 accounts remained open in Ulster Bank and KBC Bank Ireland. What is more concerning is that close to 500,000 of these accounts were deemed to be still active in the two departing banks.
From the 11th of November 2022, Ulster Bank will freeze accounts meaning many businesses will need to take immediate action.
Businesses and consumers find themselves at a crossroads in the quest to find alternative providers for their banking needs. The void left by Ulster Bank, in particular, will be most felt particularly by those who had multiple accounts with the provider.
As many had availed of the bank’s international payments service, business customers and individuals will now be seeking alternative providers to meet this need.
Cross border payments – Why your high street bank may not be your best option
Many fintechs have the technology to provide frictionless cross border payments for both consumers and business customers. Non-bank payment providers combine innovation with client support, adapting a customer centric business model that appeals to catch up with a public that demands service quickly and efficiently
Banks have had to rely on legacy platforms leading to slower payments and provide little or no service for the delivery of less traded (exotic) currencies. When it comes to customer support, banks have much to do to match their fintech counterparts
A recent Irish Times article revealed that customers of Irish banks have had to endure waits of up to two hours for telephone support with as many as 50 per cent of one bank’s customers simply giving up and ending calls before being able to speak to a human being.
When it comes to the provision of international payments for SMEs, banks are also lagging behind their fintech counterparts when it comes to cost and transparency.
- Cost – Banks charge up to 4% for international bank to bank transfers, with some charging even more.
- Transparency – SMEs could find it difficult to compare prices of international payments. Often, the end price may differ from that originally agreed with fees/spreads hidden.
- Integration – SMEs with high volume cross border payments may find that bank services are difficult to integrate into existing workflows.
Research by the European Central Bank found that traditional financial service providers, across Europe, earn hundreds of millions of euros a year by overcharging on foreign exchange services to small corporate customers.
A better alternative for FX solutions
Currency movements can be sudden and large, as we saw with sterling in the aftermath of the Brexit vote and more recently in August and September of 2022. If your business has a material exposure to a non-euro currency you need to be aware that if you do not have a hedging strategy you are taking a gamble with your bottom line.
Fexco’s international payments division provides a range of solutions for SMEs who may feel underserved by their banks as well as bank-beating rates and unrivalled support for individuals with high-value money transfers.
For Business Customers
Firms can book a forward contract which eliminates the risk of exchange rate fluctuation. It allows the user to hedge expected foreign currency transactions by locking in a price today for a transaction that will take place in the future.
As a reputable and regulated payments provider, Fexco will provide you with an overview of foreign exchange hedging products and allocate a dedicated dealer to provide a tailored solution for your business requirements.
For businesses with high volume overseas payments, Fexco provides automated solutions that streamline the process for greater efficiency and cost savings.
Are you buying or selling overseas property or repatriating salary, an inheritance or investments made abroad? Whatever the reason, you need to be sure that your money is secure and that the process is as easy and as cost effective as possible.
Stop paying the bank huge fees for money transfers, whilst receiving little transparency on the process. Fexco offers you bank-beating FX rates and expert, personal guidance throughout the entire payments process.
Fexco is a leading provider of cross border payment solutions for SMEs and corporate customers. It also offers bank beating FX rates to individuals with high value money transfer requirements. If you are at a crossroads and are seeking to reduce costs in your international payments process, then we can help.
With swift onboarding, bank beating fx rates and unrivalled customer support, you can pay suppliers and overseas partners with ease. Make the switch today – talk to Eileen Bucke or Damien Murphy or contact us for more information
Fexco helps business and personal clients to save on their international payments with bank-beating FX rates and tailored money transfer solutions. Sign up for a free account today or contact us on IRL: 1800 246 800