BPFI Statement on the Terms of Reference for the Banking Review Report

“Operating environment for Ireland’s banks should not be significantly different from that of banks in other Eurozone counties”

Banking & Payments Federation Ireland (BPFI) has welcomed the publication of the Terms of Reference for the Banking review report to be prepared by the Department of Finance which sets out to review the current landscape for the provision of retail banking services in Ireland. While assessing the current environment, the Terms of Reference also indicates that the study will look at how the retail banking sector in Ireland has evolved with a view to exploring market trends and what they might mean for the sector over the next 5 to 10 years.

Welcoming the TOF publication today, Brian Hayes, Chief Executive, BPFI, said “What’s needed at this stage is an honest discussion on the challenges and opportunities that banking in Ireland faces. We see this Review as an opportunity to focus on the future and to learn from the past. Banking in Ireland today is entirely different to banking in Ireland a decade ago. And while the banking sector remains the key financial intermediary for corporate, SME, personal and household investment in Ireland – it’s also a sector that operates under European Banking Union. The operating environment for Irelands banks should not be significantly different from the operating environment for banks in other Eurozone countries”.

As set out in the recent EY-BPFI “Future of Retail Banking in Ireland” report the Irish retail banking sector is at an inflection point. There are a complex range of issues impacting the sector which is likely to determine its future direction, where the traditional retail banking model is being disrupted. In this context, it is important to note that the Review will consider issues such as viability of the sector, regulatory requirements, capital requirements as well as cost of doing business and operational issues arising from difficulties with staff recruitment and talent all identified as key considerations for the sector by BPFI’s recent report.

Brian Hayes went on to say “We need a viable, safe, innovative, and purpose-led retail banking system that serves its customers, the Irish economy and the wider society. An informed and open conversation by all stakeholders is key to a meaningful dialogue that will shape the future dynamics of Irish retail banking and ensure the sector realises its full potential and continues to play a central role in the Irish economy and society. We need a sector that is responding to customer demands, that’s competitive and is delivering on the pace of change with improved digital offerings across fully serviced retail banking.”

This review will help us to understand a wide range of issues affecting the sector where the primary challenge for the banking system is to run its core functions in a way that simultaneously achieves its own objectives while meeting the diverse needs of its stakeholders including customers, regulators, employees, shareholders, and society.”

At the same time, the changing landscape offers opportunities for Irish retail banks to further pursue their diversification, innovation and sustainable finance agenda and to play an even more central role in Ireland’s economic and social progress in the coming years.”

Mr Hayes concluded: “The Irish retail banking sector employs 22,000 people, and the wider banking sector contributes €1.6 billion directly to the Exchequer, and a further €11.6 billion to the economy each year. The sector provides loans totalling €152 billion for Irish households and businesses, including over 822,500 mortgages to homeowners in Ireland and will play a critical role in future economic growth and development as we exit from the Covid pandemic.

Article Published: 24/11/2021