Over 100,000 current accounts have been opened by AIB, Bank of Ireland and Permanent TSB in the first three months of this year, as customers of Ulster Bank and KBC begin switching - ahead of the withdrawal of the two banks from the Irish market.
Brian Hayes, chief executive of Banking and Payments Federation of Ireland, said half a million Ulster Bank and KBC customers will be looking to set up new accounts.
Speaking on RTÉ's Morning Ireland, he acknowledged that there is a capacity issue.
"Banks are resourcing up significantly," he said.
"Hundreds of new staff have been employed. There has been a significant redeployment across those three banks," he added.
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Mr Hayes insisted that there are also other providers in the market, including An Post and the Credit Unions.
"I'm suggesting that customers should look at all the providers that are in the market and look at all the options that are there," he said.
Mr Hayes said there has been active engagement with the direct debit originators to discuss their plans to address the challenge represented by so many customers switching accounts at the same time.
"I think the real issue is going to be how we deal with direct debit originators.
"The challenge won't be around opening an account or closing the account," he said.
"In a circumstance where there's going to be such change in the industry, and so many new people will be looking for new accounts - there obviously will be issues as we go forward," he said.
