Speaking at the Banking and Payments Federation Ireland’s national banking conference in Dublin, Mr Kincaid said there is an array of cases in the public domain involving errors, or redress to consumers, where the regulator “continued to face more to-and-fro with firms than should be necessary”.
He said the Central Bank has observed that when issues are brought to its attention by consumers and it becomes involved, the problem is escalated to the financial firm’s management team, and then the firm recognises that its performance is sub-standard “and rectified the situation”.
While it was good to see that responsiveness, Mr Kincaid said, “too often it begs the question why it took a Central Bank intervention to bring this level of senior management attention to an issue a customer was already complaining about, and that clearly called into question how the firm was delivering for its customers in general”.
The director said a more consumer-focused culture is being embedded within financial firms that are regulated by the Central Bank, and there is a “good level of responsiveness by regulated firms” to the bank’s interventions.
The time has come for firms to pay more attention to the basic levels of service consumers receive
“However, the level of service a consumer receives, especially when things go wrong, cannot continue to be so differentiated based on whether or not the specific matter is one on which the Central Bank is focused at that point in time with your firm,” he said.
“Responsiveness to regulatory interventions is not enough, and the time has come for firms to pay more attention to the basic levels of service consumers receive, and how the sector is going to deliver for those consumers into the future.” Mr Kincaid noted that the primary source of complaints to the Financial Services and Pensions Ombudsman was linked to customer service, accounting for almost a quarter of all cases. For the banking sector, that rose to 32pc of all complaints.
This was not an isolated trend, he noted, as it was backed up by customer-sentiment analysis published by the Department of Finance last year, which found that customers service was the main reason for dissatisfaction with the banks, both in branches and online services.
“We can also see this in our own social-media trends monitoring, and analysis of the complaints made directly to firms,” Mr Kincaid said. “For examples, banks have reported to the Central Bank that during 2023 their customers complained to them 81,000 times. Over two-thirds of those complaints were about account processing and administration, and other customer-service issues, resulting in almost €1.6m in redress to those customers.” The director described the financial institutions’ record on customer engagement as a “mixed bag” with some good initiatives, but also firms falling short of internalising a consumer-focused culture in their commercial decision making from the outset, independent of any intervention by the Central Bank. There is also a lack of attention to the level of service received by consumers in their day-to-day activities, including where there are complaints about that service.
Mr Kincaid added that firms could do a lot a practical level to make improvements to customers service and could expect to see an increasing focus on this topic in the Central Bank’s supervisory work.
The bank is reviewing the Consumer Protection Code to make sure it remains fit for purpose, which will include new protections and a targeted package of new measures on digitalisation, frauds and scams, and effective information on mortgage credit and switching.
“Consumers will benefit from the added clarity on their regulatory protections, as well as a package of new protections that reflects how most are accessing financial services today.”
