I attended the NIB media briefing yesterday.
The report is good on aspiration, and brings attention to a real need - but reform of payment systems can only be brought about by an alliance of the various participants in the system. No one bank, particularly a smaller bank which is currently shrinking its footprint in Ireland, can move significantly ahead of the others, because of the interlinked nature of payment systems.
There is already a payments strategy, currently called the National Payments Implementation Plan (NPIP), which has less challenging targets, and as a member of IPSO, NIB is already a participant in NPIP. Now, NIB clearly and publicly seems to move away from the NPIP and clearly signals its impatience with the progress of that plan. The real issue is whether the NIB initiative will act as a spur to bring a new level of urgency.
To deliver on the NIB plan, the banks will have to improve their payment systems and will have to improve the public perception of the banks as corporate citizens and as service providers. The other stakeholders, government, bank customers, and the general public all have their parts to play.
ASKABOUTMONEY regularly gives clear testament to the public mistrust of banks and failures of their systems. Those failures happen all too frequently. In these days, we rightly expect higher standards from our banks, just as we do from our retailers, our service providers, our manufacturers. The public mistrust is exacerbated when errors are not rectified as quickly as they should. The levels of electronic banking in Denmark, the home country of NIB, will never be achieved until confidence levels are raised significantly.
Initiatives like integrated ticketing are an urgent necessity to make progress. A journey from my house (Monkstown) to my brother's (Suburban Galway) requires Dart, Luas, and Railway tickets - all separate transactions, as well as a taxi which is unlikely (unwilling) to accept anything but cash.
Another urgent requirement is a system of linked online invoicing and payment such as is in constant use in Scandinavian countries. This is the only real way to get major reduction in business cheques.
The quoted figure of €1bn savings is based upon internationally sourced material rather than on Ireland. Nevertheless, I believe that the savings would be very substantial and may be in that region. Those savings would be widely spread through the economy any may include inter alia:-
1...Very large numbers of staff reductions among front-line staff at bank branches, particularly among cashier positions.
2...Large reductions of back-office staff in cash centres, cheque clearing operations, etc
3...Reductions in the cost of physical security in cash distribution, including costs of army/gardai
4...Reduction in costs at retailers and other cash handlers
5...More efficient payment systems eliminate the cost of cheque writing. Also eliminate the costs of stamp duty and postage associated with a cheque
6...Lower bank charges for both business and personal customers must be expected as bank costs reduce
The overall effect would be an improvement in the competitiveness of the economy, and therefore must be addressed with some urgency.
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