Online banking services may face disruption as part of a major restructure of the island’s banks.

But the financial services regulator insists customers should not lose out.

From January 1, 2019, banks in the UK have to separate or ’ringfence’ their retail operations from their riskier investment arms.

It’s a move that was recommended by the Vickers Report in an attempt to avoid a repeat of the 2008 credit crunch when the UK taxpayer was forced to bail out the perilously over-leveraged banking industry.

But in 2019 the Isle of Man and other Crown Dependences will fall outside the ring fence.

This means that an island-based bank cannot be a branch or subsidiary of a ringfenced UK bank.

Different banks have announced different ways of restructuring their operations in the Crown Dependencies.

Barclays Bank plc, for example, is creating a new ring-fenced bank in the UK called Barclays UK. Barclays Bank plc will continue as a non-ringfenced bank that will have a branch in the Isle of Man.

HSBC has announced similar plans, with the creation of a new ring-fenced bank in the UK called HSBC UK but with the Isle of Man and Channel Islands branches remaining part of HSBC Bank plc.

HSBC customers have been told one of the key changes in the next few months will be dedicated Isle of Man online and mobile banking services.

But some things won’t be available via online banking from the outset including applying for a new overdraft, credit card or a loan. These will be only be accessed via telephone banking or in the branch.

But HSBC notes, however: ’We’ll continue to make enhancements and re-introduce tools and functionality to both on-line and mobile banking following their launch.’

There have been concerns that some credit card providers have stopped issuing cards to customers in the island.

The larger UK banks says they will continue to offer new cards and renewals.

Andrew Kermode, head of the banking, funds and investment division at the island’s Financial Services Authority, said: ’One of our main focuses has been on the services and products that the banking industry offers to its customers, whether local residents, businesses, corporates or non-residents, and how the structural reforms will impact on them.

’We want to make sure people continue to have access to all the products and services they have today.’

He said the FSA was satisfied that the new set-up being proposed by the banks would have ’no material impact’ on products and services including current accounts and lending services.

Mr Kermode said that credit cards were a separate issue to banking reform.

He said: ’Local residents can still avail themselves of credit cards but there is a more limited choice when compared to options for people living in the UK. That’s something government is watching and reviewing.’

Mr Kermode explained that when UK ring-fencing was originally announced, the Crown Dependencies held a number of meetings with the UK authorities to understand what this would mean for large UK banks operating here, in terms of their legal structure, and what options there may be for banks here - in or out of the ring-fence or a combination.

He said that in drawing up its legislation the UK decided it did not wish to extend the ringfenced bank or ringfenced group beyond the UK - although under EU law it had to permit EU operations to be in the ringfence if required.

’No special arrangement was given to the Crown Dependencies,’ he said.

So will our money be any less safe in the new structure?

Mr Kermode pointed out that the Isle of Man depositor compensation scheme will continue to apply and the UK Prudential Regulation Authority will continue to be the lead regulator for UK banking groups with a presence in the island.

He said banks will need to have group-wide recovery plans in the event of a bank failure. ’The UK has a resolution regime for dealing with a large bank failure and the Isle of Man is to start work on its own recovery and resolution framework soon,’ he said.