Irish people fed up with high banking fees turning to digital-only alternatives

A new report has highlighted growing frustration among Irish consumers over high banking fees and 'hidden costs' for international transactions.

The second annual State of Irish Banking report, published today, shows that an overwhelming 73% of customers believe the fees charged by traditional banks for basic services such as account maintenance and ATM withdrawals are excessive.

Many consumers are now adopting a hybrid approach to managing their finances - opting for both traditional banks and digital-only alternatives.

The report reveals that 20% of respondents exclusively use traditional banking services - a decrease of 6% from the previous year. In contract, 36% now rely solely on app-based financial services. The remaining 49% are hybrid customers, using both traditional and app-based financial services providers

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The report outlines various frustrations experienced by Irish consumers, including:

• Lack of competitive interest rates (37%)
• Poor customer service (29%)
• High and slow international transaction costs (27%)
• Lack of transparency on fees (25%)

Chief Technology Officer at Wise, Harsh Sinha, commented: “We are witnessing a tipping point for banking and fintech in Ireland. The 2024 State of Irish Banking Report highlights how high fees and outdated processes are driving momentum for faster, more competitive, transparent, and consumer-friendly financial providers in the market.”

Many Irish people feel 'ripped off' with international transaction fees. The survey found that participants transferred up to €75,000 into other currencies in the past year, with an average transaction of €661. However, 73% of those surveyed do not understand the fees associated with overseas transactions or believe that their banks should clarify them. In addition, 43% suspect they were overcharged on hidden exchange rate fees.

The demand for better banking solutions when spending abroad is strong, with 79% of consumers calling for simple methods to transfer and spend money internationally. This push is reflected in a 12% year-on-year increase in the use of digital payment apps while travelling.

The lack of competition in the banking sector has also been linked to high costs and sluggish innovation, especially following the exit of major players like KBC and Ulster Bank. Two-thirds (66%) of Irish consumers want traditional banks to collaborate more with fintechs to enhance their services.

When considering digital providers, 61% of consumers cited faster transactions as their primary attraction, while 41% appreciated the ease of budgeting when travelling, and 39% were drawn to lower payment fees. More than half (56%) of respondents using app-based providers rely on them for everyday spending, and 60% prefer app-based options for online shopping.

Despite these frustrations, 54% of consumers have considered switching providers in the past year. However, many remain with their traditional banks due to the perceived hassle of changing services.

Head of UK & Europe Partnerships at Wise Platform, Roisin Levine, commented: "Across Europe, we're seeing a clear mandate for change in financial services. Irish consumers, like their European counterparts, are demanding faster, more transparent, and cost-effective solutions to manage their finances - something fintechs such as N26 and Wise are currently offering in the market.

“Our research shows that Irish people want to see banks increase their use of fintech solutions, and provide simpler ways to manage their money. This isn't just about modernisation – it's about creating a financial ecosystem that matches the pace and innovation we're seeing across Europe. Both banks and fintechs have a crucial role to play in delivering the technological advancement that consumers now expect."

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