KBC’s innovative digital banking platform would not be part of sale to Bank of Ireland

KBC customer have taken advantage of the bank’s investment in digitisation

A pedestrian passes a KBC Bank branch in Dublin. Photo: Aidan Crawley/Bloomberg

Jon IhleKB

April 17 2021 02:30 AM

If KBC accepts Bank of Ireland’s proposed acquisition of its Irish business, banking customers will lose more than just a provider of mortgages and savings accounts. They’ll also lose the leader in digital innovation among mainstream banks in the market.

When KBC Group decided to commit to Ireland after a strategic review in 2016 and 2017, it bet big on two things: growing mortgage market share and investing in technology.

In a market where digital offerings are threadbare, this was a differentiator, as KBC Ireland was first with several digital features for retail banking.

In February, KBC Group announced a three-year €1.4bn digital investment project to upgrade its businesses across Europe.

But KBC Ireland was already running ahead of its rivals. In 2020, 34,000 people opened current accounts with the bank, attracted by its market-leading app and digital wallet relationships with Apple Pay, Google Pay, Fitbit Pay, Garmin Pay and Wena Pay. Last year, the bank had a 57pc increase in contactless payments, too.

It is understood, however, that if Bank of Ireland acquires the performing part of KBC Ireland’s business, the tech platform and tools won’t come with it. The memorandum of understanding between the two banks covers products, assets and liabilities, but not proprietary tools owned by KBC Group.

That’s a pity for KBC customers, who have taken advantage of the bank’s investment in digitisation.

Bank of Ireland, by contrast, has struggled to get to grips with digital banking, with its technology investment plan run overdue and over-budget in recent years.

Notoriously, the bank was the last in the market to introduce Apple Pay – three years after it became available in Ireland.

Tellingly, Revolut and N26 got there ahead of the pillar bank.