Mr. Gerry Cross:

I will lead off on this topic. My colleagues may contribute as well. This question raises some important issues. Deputy Tóibín will have heard Governor Makhlouf say earlier that the reduction in the number of retail banks from five to three was a matter of concern from a competition perspective. That is the case. In my opening comments, however, I tried to briefly set out how much we are currently in a state of flux in respect of the evolution of our financial system. It is important to say those are not just words; this is truly what we see happening. During the last five years, we have seen significant evolution in the financial system. As I mentioned in my opening comments, we have moved from there having been four authorised payments firms four years ago, to there now being more than 40, with 30 more in the approval pipeline. Real change is happening in the sector.

It is also worth saying, because it is striking, that approximately 10% of new mortgage lending is offered by non-bank lenders. Regarding the point made by the Deputy, that does not take up all the capacity that was serviced by Ulster Bank and KBC by any means, but it is a material amount of participation by these non-traditional lenders. On the SME lending side, the equivalent figure is about 20%. These are not exact numbers, but they are broadly correct. This is without mentioning all we are seeing in respect of the technological change in this area. The Deputy was correct in saying we cannot talk about some of these innovative newcomers as being the same as the retail banks in respect of their embeddedness. That is true. It is important to recognise as well, however, how rapidly the whole ecosystem is changing. Ultimately, this is about the provision of services to customers, users and the economy.

From our perspective, Governor Makhlouf mentioned we do not have a competition promotion role and that it was for others to undertake that aspect.

It is important for us, as we do our regulatory activities and engage with firms, to understand how what we are doing relates to and impacts on competition. This includes how we engage with innovative firms and technology companies and how we are available to that cohort, so that we fully understand the changes that are taking place.