A Central Bank review has found unacceptable delays in waiting times on some customer support lines across the five main retail banks here.
In some cases, the research found that customers had to wait up to two hours to have their calls answered.
On average, call wait times on some lines were "excessive" the regulator said and exceeded the Service Level Agreements of the banks concerned.
Call abandonment was also high as a result, with the review finding that on one phone line 50% of calls were ended by customers before they were even answered.
The level of resourcing for customer service lines varied considerably across the banks, the Central Bank said, and was insufficient in some cases.
The regulator has now instructed the five lenders concerned to implement robust action plans to tackle the problems that have been identified.
It comes ahead of an expected huge uptick in customer engagement with all the banks as Ulster Bank and KBC Bank Ireland prepare to exit the Irish market, forcing around a million customers to find new homes for their current and deposit accounts.
"This is even more important given the planned departure of two banks from the Irish market," said Colm Kincaid, Director of Consumer Protection at the Central Bank.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
"With these planned departures it is expected that the demand for customer services will increase across the banking sector as customers look to move accounts, access new services and seek information," he added.
The assessment was carried out on AIB, Bank of Ireland, Ulster Bank, Permanent TSB and KBC Bank Ireland.
The data sought included daily call volumes, average call wait times, above average call wait times, call abandonment rates, as well as adherence with internal service level standards and resource levels.
The review did find that the some of the banks had experienced unexpected spikes in demand on customer support line and that this had contributed to some of the excess call wait times.
The banks now have until the end of the year to report on their implementation of the measures they have agreed with the Central Bank.
Last June the Central Bank wrote to the retail banks and outlined its expectations about how they should handle the impact on customers of the departure of Ulster Bank and KBC.
The demands include demonstrating a customer focused culture, being transparent and clear in communications and giving customers as much notice as possible about account closures and product withdrawals.
Earlier this week Ulster Bank said it would shortly begin to contact customers who will need to start the process of choosing a new bank, moving their banking and closing their existing account.
In a statement, Brian Hayes, Chief Executive of Banking and Payments Federation Ireland said like companies in all sectors, the pandemic did have an impact on staff and services in the banking sector.
"Banks experienced absences of up to 25% on certain days, reallocating staff to customer facing teams and branches to minimise disruption.
"Thousands of contact centre staff in the five retail banks worked on-site to provide essential service at every stage of the pandemic, managing over 10 million calls in 2021," he said.
In relation to the surge in customer queries due to the exit of Ulster Bank and KBC Bank Ireland from the Irish market, Mr Hayes said the transition of over one million customer current and deposit accounts and millions of direct debits will be an "unprecedented event" in the history of Irish banking.
"It will require the participation and support of multiple stakeholders across the economy, including the banking industry, regulatory authorities, utility companies, Government Departments and agencies, and employers working together," he said..
"BPFI and its member banks are working intensively together as an industry, as well as with stakeholders, to assess and plan for this unprecedented task of transferring millions of accounts and direct debits of personal and business customers across the economy.
"This enormous task is an absolute priority for the banking sector, its customers and its stakeholders and will remain the number one issue at all levels of our operations this year," Mr Hayes said.
