Michael McGrath (Cork South Central, Fianna Fail)
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It is regrettable that Ulster Bank and KBC have decided to exit the Irish market, but these are commercial decisions of both banks. The priority since has been to ensure that each bank withdraws from the market in an orderly manner and to ensure the impact on customers is minimised.

Financial services continues to evolve rapidly, and my Department is engaging with national, European and international developments across a range of areas. I have also welcomed the launch of a public consultation paper on 8 November 2023 by the Central Bank of Ireland which contains proposals to enhance the Central Bank’s engagement on innovation. These proposals include enhancements to the existing Central Bank Innovation Hub and the establishment of an Innovation Sandbox Programme.

In relation to the broader issues of innovation and competition in Ireland’s banking sector, I would like to update the Deputy, in particular, on the recommendations in the 2022 Retail Banking Review, which was established to undertake a broad-ranging review of the retail banking sector as a result of the departures and other changes occurring in retail banking.

The Government approved the publication of the Retail Banking Review and the implementation of its recommendations on 29 November 2022. Each recommendation identifies the body or bodies responsible for delivery of that recommendation and where appropriate contain timelines for delivery of the recommendations. It is for the relevant bodies to consider and implement the recommendations addressed to them. The implementation of the recommendations that are directed at the Department of Finance have been embedded in the business plans of the relevant areas.

For example, in terms of competition, the Department of Finance has begun the scoping exercise to identify actions to facilitate increased sharing of information between the Central Bank and the Competition and Consumer Protection Commission across all relevant areas of their respective remits.

The Review also recommended introducing a requirement for the Central Bank to publish cost benefit analyses when bringing forward regulations that that consider the impact on consumer protection and competition.

The Retail Banking Review contained a recommendation for the Department to lead on the development of a National Payments Strategy in 2024, developing a new strategy that will take account of the changing landscape and determine how best to adapt to it. The National Payments Strategy will also take account of the EU legislative landscape, particularly the proposals on instant payments and payment services.

Implementation of several of the recommendations requires close collaboration between my Department and the Central Bank, and the Central Bank has informed me that it is working on the implementation of recommendations addressed to it.

Other recommendations require implementation by other State agencies, such as the CCPC, Government departments and other relevant stakeholders. It is also crucial that the retail-banking sector ensures the interest of consumers are a priority in their organisations and seek to work together, where possible, to deliver the best outcomes for the economy and citizens. The retail banking sector has been contacted regarding their role in carrying out those recommendations which fall to them.

The Deputy may recall that I published a Banking Consumer Sentiment Survey in September of this year. These surveys are very helpful to identify trends in consumer behaviour, including product choice, competition and innovation, which in turn feeds into evidence-based policy making.

Finally, the Deputy should note that the Credit Union (Amendment) Bill 2022 is due for Report Stage in Dáil Eireann next week, on 30 November. I feel it is important that credit unions continue to develop their lending capabilities in the community in a safe and cost-effective way through collaboration.

The two key amendments in the Bill to enable Credit Unions to be more competitive are:

1.to allow credit unions to take part in both loan participation and loan syndication; and

2.to allow credit unions to refer members to other credit unions in all circumstances, regardless of whether or not the referring credit union provides the services the member is seeking.

These are important enablers in ensuring that the credit union sector enhances member services, grows lending and expands membership.