Banking system “broken” say retailers and RGDATA

RGDATA director general Tara Buckley
RGDATA director general Tara Buckley

RGDATA has published details of a survey which highlights persistent problems the retail sector is facing

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15 July 2015 | 0

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The Retail Grocery Dairy & Allied Trades Association has published the results of a survey exploring retailers’ relations with their banks across a range of heading, with eye-opening results. High fees, poor service, limited choice and an absence of competitive alternatives were common responses; RGATA director Tara Buckley said the survey demonstrates how the banking sector is still “closed for business” for retailers and not offering competitive choice or proper service levels to a core sector of the economy.

The survey, which put a range of questions to RGDATA’s 4,000 members, found that 56% of retailers are customers of Bank of Ireland, while 39% bank with AIB. Less than 10% are customers of Ulster Bank. 91% of retailers use online banking, with most visiting their branch at least twice a week; only 60% have a dedicated point of contact in their branch.

In terms of banking fees and services, the survey revealed only 30% of retailers had been offered a new service by their bank in the past year, while 34% said that increased charges on lodgements has negatively impacted on their investment in their business. Furthermore, 73% of retailers said that they would like to move banks to avoid these charges, but 60% of them were stuck with their current bank because of existing overdraft or loan commitments.

80% of retailers cited a sharp decline in service from their bank, with a reduction in customer service showing up as the greatest single complaint.

Speaking about the response to the survey, RGDATA director general Tara Buckley said it is clear that the banking sector in Ireland is still not fuctioning when it comes to retailers. “Retailers, who are the core of the SME service sector and significant employers nationally, feel they have been abandoned by the banking sector,” she said. “There are real concerns that the banks are operating to an agenda that does not recognise the challenges and opportunities presented by their retailer customer base.

“The absence of competitive choice is a real concern, as is the dominance of the two main banks in the retail sector,” Buckley said. “The high charges and poor service from the banks needs to be challenged given the absence of competition in the market. This is an area where the Government could usefully step in to address the imbalance involved.”

Buckley added that the Government should examine ways of unlocking competition and choice in the banking and financial services sector in Ireland. “The Banks have shown that when left to their own devices they will not behave reasonably or fairly with their customers,” she said. “There is an obligation on the Government and the regulatory authorities to ensure that an absence of competition in such an important area of the economy does not damage local businesses which have real potential to contribute positively to economic recovery.”

 

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