Wise research reveals 3 in 4 consumers frustrated with high banking fees

New research unveiled by Wise, the international money app, shows a growing frustration among Irish people with high costs for basic banking services and hidden fees for international transactions. As a result, more people are taking a hybrid banking approach or using digital only alternatives.

Results from the second annual ‘State of Irish Banking Report’ reveal that three quarters (73%) of consumers believe that fees charged by traditional Irish banks for basic services such as account maintenance and ATM withdrawals are excessive.

The 2024 report, conducted with Censuswide reveals a shift away from standalone traditional banking services. Just one in five (20%) now use traditional banking services alone, a 6% decrease on last year. In contrast, 36% now prefer using only app-based financial services – suggesting Irish banking customers have reached a tipping point in their adoption of fintech. The remaining 49% are hybrid customers, using both traditional and app-based financial services providers.

Other traditional banking frustrations identified by Irish consumers include:

• A lack of competitive interest rates (37%)

• Poor customer service and lack of responsiveness (29%)

• Costly and slow international transactions (27%)

• A lack of transparency on fees (25%)

  

“We are witnessing a tipping point for banking and fintech in Ireland,” said Harsh Sinha, Chief Technology Officer at Wise. “The 2024 State of Irish Banking Report highlights how high fees and outdated processes are driving momentum for faster, more competitive, transparent, and consumer-friendly financial providers in the market.”

Irish consumers feel ripped off for spending abroad

Managing finances abroad is a worry for Irish consumers: Those surveyed transferred up to €75,000 into other currencies last year, with the average respondent sending €661, yet the majority (73%) say they don’t understand overseas transaction fees or believe that their bank should make these clearer. Adding to the sense of frustration over this lack of transparency, 43% think their bank overcharged them on hidden exchange rate fees last year.

Irish consumers are also growing increasingly frustrated with the lack of convenient banking options when spending money abroad. Nearly four out of five (79%) are now demanding banks offer simple solutions to transfer and spend money abroad. This desire for transparency is underscored by a 12% year-on-year rise in the number of people now using digital payment apps when travelling.

Competition and innovation a concern for customers

A lack of competition in the banking sector has been blamed for high costs and stifled innovation by Irish consumers, following high-profile exits from the market from players such as KBC and Ulster Bank. As a result, two thirds (66%) of Irish consumers want to see better integration and collaboration with fintechs to enhance traditional banking services.

When considering switching to digital providers:

• 6 in 10 (61%) cite faster transactions as their favourite thing about digital payment apps, while 41% appreciate the ease with which they can use apps to manage and budget when travelling, and 39% enjoy lower payment fees.

• More than half (56%) of Irish consumers using app-based providers rely on them for everyday spending, while 60% opt for app-based financial services when online shopping.

• Over half (54%) say they would switch to an app-based provider if their traditional bank closed tomorrow, citing faster transactions and lower fees as advantages of app-based providers.

• A majority (54%) have considered switching service providers this year. Among those who haven’t considered switching, three quarters have stuck with their traditional bank because they think it’s too much hassle to move.

Speaking on the launch of the report Roisin Levine, Head of UK & Europe Partnerships at Wise Platform said: “Across Europe, we’re seeing a clear mandate for change in financial services. Irish consumers, like their European counterparts, are demanding faster, more transparent, and cost-effective solutions to manage their finances – something fintechs such as N26 and Wise are currently offering in the market.

“Our research shows that Irish people want to see banks increase their use of fintech solutions, and provide simpler ways to manage their money. This isn’t just about modernisation – it’s about creating a financial ecosystem that matches the pace and innovation we’re seeing across Europe. Both banks and fintechs have a crucial role to play in delivering the technological advancement that consumers now expect.”

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