As the recent baking crisis has clearly illustrated, you need more than 1 bank. We recommend at least 3.
The most obvious of these is what we call a pillar bank. These are also referred to as Systemically Important Banks (G-SIBs).
In Ireland, there are 2 pillar banks, AIB and Bank of Ireland (BoI). We predominately work with BoI as we have found that they are more open to working with start-ups that have an international ownership and managerial structure.
Deposit Interest Rates
At the time of writing, AIB or BoI are not offering deposit interest rates. So, if you have cash in the bank, it is just sitting there. It could be worse, last year there were negative interest rates. However, you are still losing out when you consider inflation is currently running at 9%.
Unfortunately, there are no options here.
Bank fees for the 2 pillar banks tend to be high. It is difficult to make comparisons to other EU banks, because bank fees are varied and confusing. We estimate that on average, our clients are spending upwards of €4,000 a year on the various bank fees charged.
This is not to be dismissed or overlooked. If your bank has good technology, it can really help with the running of your business. There tends to be a learning curve with both pillar banks technology, they are based on legacy systems that were designed before the internet, mobile phones and Apps were invented. They can be both limited and frustrating.
The human touch
Both banks tend to score well here. Invariably there is an account manager who is there to help. You can email, phone, zoom or even meet this person in the flesh. These account managers tend to be good people who are motivated to help you open a bank account.
Credit Cards, Loans, Financing, Pensions
These are all available but you need to establish a track record with the bank first. You need to trade with them for at least a year before you can get any type of debt funding from them. Irish Banks are very risk-averse.
How safe is your money?
Irish Banks are subject to the same regulation as any EU bank but in real terms, your money is very safe. Both AIB and BoI effectively went bust in 2008/2009 and the Irish government guaranteed everything and injected billions in cash to shore up their respective balance sheets.
Irish banks tend to be much more tightly regulated as a result of this meltdown, so while nothing is 100% certain, it is hard to imagine a safer bank than either of the two Irish pillar banks.
So what next?
If you have an Irish company, then you should have an account in one of these banks. You can 100% run your company through this account but we think that a fintech bank like Revolut makes your business life easier. Parking some of your funds in one of the pillar banks is an essential part of your diversified banking strategy.