HOME NEWS

Portugal’s banking system is preparing for an important reform.

The Bank of Portugal (Banco de Portugal) has officially announced that it will “soon present significant regulatory simplification measures regarding the opening and closing of bank accounts.” The announcement was made by the Governor of the Bank of Portugal, Álvaro Santos Pereira, during this week’s annual banking sector conference.

This signals that procedures long considered bureaucratic — including account opening, closure, and switching banks — may soon undergo substantial improvement.

Switching Banks Without Changing IBAN? A Key Barrier May Be Removed

Currently, customers in Portugal who switch banks are generally required to change their IBAN (International Bank Account Number). The IBAN is the unique international identifier for each account, and transferring to a new bank automatically means receiving a new number.

This system has long been viewed as a structural barrier to competition within the banking sector.

Changing an IBAN requires updating salary payment details, direct debit mandates, utility payments, tax registrations, and other linked services. For both individuals and businesses, this process involves administrative effort and practical inconvenience, often discouraging customers from changing banks.

The Portuguese Competition Authority (Autoridade da Concorrência) has previously identified IBAN non-portability as a market obstacle and recommended the introduction of IBAN portability.

Governor Santos Pereira acknowledged this concern and stated that the Bank of Portugal will “consider providing IBAN and/or account portability and transfer mechanisms for customers wishing to switch banks.”

If implemented, switching banks without changing IBAN could become a reality.

Boosting Competition, Reducing Friction, Strengthening Investment Appeal

The Bank of Portugal emphasized that this regulatory simplification aims not only to respond to long-standing customer concerns but also to enhance competition in the financial sector.

For investors, the implications are broader.

A more efficient and lower-friction banking system means smoother capital flows for businesses, reduced interbank switching costs, more flexible account management, and greater transparency and predictability within the financial system.

In today’s global investment landscape, where administrative efficiency and financial convenience are increasingly decisive, improvements in banking infrastructure directly contribute to a country’s attractiveness as an investment destination.

Optimizing account management systems is, in effect, a step toward modernizing financial infrastructure.

Proposal for an Independent Entity to Improve Account Switching Services

Beyond IBAN portability, the Competition Authority has also recommended the creation of an independent body to oversee and manage bank account switching services.

Although an account switching mechanism already exists in Portugal, its adoption rate remains relatively low. Establishing a dedicated entity could improve transparency, operational efficiency, and overall user adoption, further reducing barriers to mobility within the banking sector.

Such measures would make Portugal’s banking system more flexible and better aligned with modern competitive standards.

Financial Modernization: A Further Upgrade to Portugal’s Investment Environment

This reform sends a clear message: Portugal is not only advancing digital government and public administration reforms but also strengthening the structural efficiency of its financial system.

For domestic businesses and international investors alike, this translates into a more convenient capital management environment, greater institutional transparency, and a more competitive market framework.

While simplifying account opening and closure procedures may appear technical in nature, it represents a meaningful sign of financial system maturity.

At a time when global capital increasingly values institutional quality and administrative efficiency, this reform adds another positive signal to Portugal’s investment landscape.

Portugal’s banking system is moving toward becoming more open, more efficient, and more competitive — reinforcing the country’s position as an increasingly attractive destination for investment.

Reference link: https://zap.aeiou.pt/regras-simples-abrir-fechar-conta-bancaria-729690

For more details, please refer to: https://adlinvestment.com/en/about/