Irish banks do not compete with each other on retail charges, but their fees are amongst the cheapest in the world, according to a new survey.
A study of bank charges for services like ATM cards, current accounts and online and telephone banking, shows that the Republic's financial institutions charge an average of €59 a year, compared with the global rate of €108.
They come out even better when compared with their counterparts in the other 11 members of the euro-zone currency area, where the average is €130.
The study by consultants Capgemini, and paid for by the Irish Bankers' Federation (IBF), ranks Ireland as the third cheapest of 20 countries for retail banking.
London-based Capgemini vice-president Brian Gannon said yesterday that as a consequence, Irish banks do not compete for new customers by offering reduced charges.
"They do not seem to be using pricing as their main competitive strategy," he said. "It's more based on customer service and relationships."
However, IBF general secretary Pat Farrell said yesterday that some Irish banks have recently begun to compete in this area by introducing reduced fees, or cutting them out altogether.
He pointed out that since the federation introduced a new code of practice for its members to make it easier for consumers to switch accounts from bank to bank, they have stepped up competition in this area.
The IBF expects that 10,000 people will have switched accounts by next month, when the code will have been operating for six months. Mr Farrell said this "far exceeds" the rate at which UK consumers changed banks when a similar code was introduced there.
The Capgemini study covered AIB, Bank of Ireland, NIB, Permanent TSB and Ulster Bank, which account for 86 per cent of the Irish retail market.
It covered 19 services under the headings of account management, payment methods, cash deposits and withdrawals, and occasional services like cheque stopping, drafts and document searches.
The Irish Financial Services Regulatory Authority (Ifsra) regulates bank charges and has to approve increases proposed by individual institutions before they can impose them on consumers.
It did not take into account any taxes such as the ATM card charge levied by the State. It also focused only on the fees charged for retail services and excluded products like savings, insurance, mortgages and other credit.
Capgemini completed the survey three months ago. The study is part of a global report on bank charges that the consultancy carries out every year.
Nineteen other countries, including the other 11 euro-zone members, the US, UK and China, are included in it.
Up to this year, Capgemini did not include the Republic. Mr Gannon pointed out that it regarded the market here as "too small and too peripheral". However, after the IBF approached the company it agreed to include the Republic in the report.
