Businesses are being advised to act early if they need to establish new banking arrangements in the months ahead.
With Ulster Bank and KBC Bank Ireland leaving the market here, thousands of individuals and businesses are being given six months to close their accounts with the departing banks and move their custom to another institution.
However, for commercial entities the process is generally more complex and it will likely take more time than an individual moving accounts.
The volume of account transactions for firms is higher than for personal customers and there is generally a broader range of accounts required, the Banking and Payments Federation of Ireland (BPFI) advises.
As it launches a national awareness campaign on business account switching, it has appealed to firms to act early ahead of an expected rush to move banks in the coming months.
“For some businesses, the needs may be a straightforward account with an online business banking capability and perhaps a deposit account,” Marian McCarville, Head of Business Banking & Taxation with the BPFI said.
“Many more businesses will require cash management facilities or payment facilities such as payroll. For others who are importing or exporting, you may need trade finance products, foreign exchange risk management products or interest rate risk management products,” she added.
Ms McCarville emphasised that where credit facilities exist – such as loans, leasing, overdrafts or invoice discounting – they will not transfer automatically and will have be arranged with the new provider.
“It will take longer to process applications for credit facilities, so it is important to allow enough time for new credit facilities to be put in place,” she warned.
As a first step, businesses are being advised to source necessary documentation such as proof of identity and contact details for directors, account signatories and beneficial owners.
They will also require business documentation such as bank statements and audited accounts as well as proof of business ownership, registration and legal documentation.
Firms are also being told to be alert to potential fraud in the switching process, particularly invoice redirection scams, where fraudsters advise the business to change their bank details for paying future invoices.
“Phone a known contact or look up the number independently. Do not use the contact details on the letter or email requesting the change,” the BPFI advises.
Marian McCarville told Morning Ireland that it wasn’t that businesses had been slow about starting the process but that there was a concern that some might put it on the long finger.
“There’s a lot of documentation to be gathered and the sooner they start that process and engage with a new provider, they will tell them what information is needed,” she explained.
That, she said, would likely involve a business plan, profit and loss statements and cashflow projections.
“The requirements will vary depending on the type of business. It’s going to be different for a sole trader than it will be for a limited company, for example,” Ms McCarville added.