The Banking Crisis
However, the onset of the banking crisis from the summer of 2008 plunged the Union into a period of unprecedented turmoil within the sector as the Union moved into a defensive mode aimed at protecting members' jobs, terms and conditions against the backdrop of a severe contraction in the financial sector - which resulted in over 12,000 job losses as well as a lengthy pay freeze – as the landscape of Irish banking changed quite dramatically.
Of the six domestic banking institutions in existence at the start of 2008, only three remain: AIB and Permanent-TSB - which are, to all intents and purposes, completely State=owned; and Bank of Ireland which is 15% State-owned. Of the other three, EBS has been merged into AIB while Anglo Irish Bank and Irish Nationwide Building Society were nationalised and merged to form the Irish Bank Resolution Corporation (IBRC) on the basis that it would do no more new business and wind down by disposing of all assets by 2017. In the event the Oireachtas decided in 2013 to accelerate that process by liquidating the company as part of a wider arrangement to reschedule payments due to the European Central Bank for the IBRC's promissory notes. By the end of 2014, almost of all of the IBRC's loan book has been disposed of by the special liquidators (at a better price than had previously been expected) with the balance due to transfer to the National Asset Management Agency (NAMA) by the end of 2015. NAMA had been established in 2009 to acquire distressed assets from banks at a price well below their face value so that these insitutions could clean up their balance sheets in order to return to something closer to business as usual.
Of the foreign-owned institutions in existence in 2008, the National Irish Bank owned by Danske Bank Group has disappeared from the main street. Having finally shut down its personal and business banking operations in 2014, it now offers a niche corporate banking service (and all the more so following the decision in early 2015 to dispose of a substantal portion of its commercial loans to Bank of Ireland and Goldman Sachs. Nevertheless, Danske remains a significant presence in Northern Ireland - where, having rebranded the former Northern Bank, it remains as the institution least damaged by the crisis by virtue of its traditionally more prudent approach to lending. Unfortunately the same cannot be said of Royal Bank of Scotland and either ot its Irish subsidiaries, Ulster Bank or First Active Building Society which had been one of the first lenders to offer 100% mortgages. Although Ulster Bank had traditionally been a prudential lender, its entry into the RBS stable in 2000 - where it was joined by First Active in 2004 – led to a change in direction. With the First Active management team subsequently installed at the top of Ulster Bank, the lender began to develop a much more aggressive approach towards its competitors in terms of lending for major property development as well as more modest house purchases. The result was that the two RBS subsidiaries were particularly badly burned when the property boom came to an abrupt halt in 2008 - alongside the onset of the global banking crisis (which also had its roots in unsustainable property lending in the US).
An immediate consequence of the difficulties in the two RBS-owned lenders was the decision to merge First Active into Ulster Bank - with the loss of just under 1,000 jobs - setting in train a series of restructures which have continued into 2015 - involving a sucession of branch closures and the transfer of work to RBS facilities in the UK and beyond. However, the flow of job roles has not been completely in an outward direction. In February 2015 RBS announced the creation of 350 additional contact centre jobs in Belfast's Danesfort facility to undertake work for customers of RBS and NatWest as well as Ulster Bank.
All of the major retail banking groups have responded to the crisis by closing branches and accelerating the adoption of mobile phone and internet services. Although Bank of Ireland has stood out from the rest by implementing relatively few closures, its branch network is heavily dependent on on-site IT devices which customers are encouraged to use as an alternative to dealing directly with staff whose numbers have been correspondingly reduced. While most institutions that the roll-out of phone and internet services has been driven by customer demand, IBOA members in various employments have suggested that the adoption of these new channels has been forced upon customers by the run-down of traditional forms of interaction with the institutions and their staff.
Aside from reducing their physical footprint, another key trend among most employers in the financial services sector has been the acceleration in the outsourcing of various "non-core" activities to third-party service providers - domestic or foreign - or, in the case of Ulster Bank, to other units within the parent company's business outside Ireland. The Union's approach to outsourcing during this period has been to try to secure as many options as possible for any in-scope staff: to follow the work - on the nest possible terms and conditions - to the new employer; to redeploy within the existing employment; or to take voluntary severance or early retirement. The Union has also tried to retain the right to represent any members who opt to transfer in their future dealings with their new employer. As well as pursuing the interests of members immediately affected by these developments, the Union has also raised concerns with the Financial Regulator about the broader implications of this trend. With IT operations featuring strongly among the areas to be outsourced, the Union has highlighted the implications for the delivery of core banking services since IT is now so crucial to most banking transactions.
While the catastrophic "glitch" in RBS's IT system in 2012 - which had such a profound impact on the customers and staff of Ulster Bank - brought the hypothetical to life and eventually earned a major censure from regulators in both the UK and Ireland, it was not sufficient to place a significant constraint on the freedom of financial institutions to "sub-contract" day-to-day activity for key functions to service providers.
While the Union was largely successful in protecting its members' jobs in the immediate aftermath of the crisis - especially as other enterprises in the financial sector and elsewhere began to shed staff at a rapid rate, it was unavoidable that eventually the major retail banks - where the Union has traditionally been strong – would begin to rationalise and restructure. Ulster Bank was first into the field announcing around 1,000 job losses in 2009 – and a further 1,000 in 2011 – which were implemented on a voluntary basis, as a result of the Union's intervention. Though fewer in terms of absolute numbers but greater as a percentage of its workforce, National Irish Bank made an announcement in December 2009 of its plans for 150 voluntary job cuts along with the closure of 50% of its branch network. The stated justification for these measures was the alleged customer preference for mobile phone and internet banking. The subsequent restructure took place in 2010. In June 2012, Danske's senior management announced its intention to close the remainder of the branch network with the loss of at least 100 more jobs. Again "changing customer preferences" were cited as a key factor in the decision. During the course of 2013 further staff continued to leave Head Office operations in the now renamed Danske Bank (Republic of Ireland) until in October 2013, the Bank's senior execurtives announced plans to withdraw from personal and business banking completely by mid 2014.
The demise of National Irish Bank/Danske Bank Republic of Ireland stands in stark contrast to developments in its sister institution, Northern Bank/Danske Bank Northern Ireland - which, by virtue of its prudential approach to lending throughout this period, was the least impaired of the banking institutions on the island of Ireland.
In 2016, following a three-year strategic review of its internal operations and structures, the Union adopted new Rules to encourage wider membership engagement and adopted a new name, the Financial Services Union, to reflect more properly its broadening membership base within a much more diverse economic sector.
The Financial Services Union is proud of its honourable history of defending and - where possible, advancing the interests of workers in the financial services sector. But that history lives. So as each member enjoys the benefit of that legacy, he or she can continue to honour that prouid tradition by participating in and supporting their Union as it seeks to protect their jobs, terms and conditions.