Banking review an opportunity to change the retail banking sector for the better

15 May 2022

Stakeholder banking model the best way forward says FSU

John O’Connell, General Secretary of the Financial Services Union has called on all stakeholders in the retail Banking sector to use the banking review as an opportunity to build a stakeholder banking system that is inclusive and customer centric.

Roundtable discussions are taking place in Tullamore today as part of the Banking Review announced by the Minister for Finance, Pascal Donohoe TD.

Speaking ahead of the event Mr. O’Connell said:

“The FSU campaigned for the best part of a year to convince the Government to establish a retail banking review. We are delighted that the concept was accepted by Government and look forward to articulating our views on the future of banking in the roundtable discussions on the future of retail banking taking place in Tullamore.

Change is happening in the sector at an extraordinary pace. The imminent exits of Ulster Bank and KBC and the arrival of new digital platforms, taken together with hundreds of branch closures, removal of ATMs from local communities and ongoing reduction of staff across the main retail Banks shows a real need for the sector to actively plan for the future.

We cannot return to the way things were and accept a retail banking system that puts the needs of its shareholders above those of customers and staff.

A better and more innovative approach is required that involves all relevant stakeholders. We need to build a stakeholder banking model similar to what works successfully across other European Countries.

This requires new thinking from the banks and a willingness to change.

Better and more inclusive governance with the inclusion of worker directors and a consumer advocate on the board of each of the retail banks will put the interests of customers and staff at the centre of decision making.

The gender pay gap (GPG) is at an unacceptable level in the sector. CSO figures last reported in 2018, were at 32%, Bank of Ireland, the only bank to publish their figures report a GPG of 24%, this must be a priority to be addressed.

This will not be fixed without all of us working together in the sector. Action plans need to be agreed with the trade union movement together with an implementation plan that will see the GPG closed and eliminated over a short timeframe. It will not happen without the banks adopting an inclusive and progressive approach.

We hear a lot of talk about the difficulties in attracting senior management in the Banking sector because of the €500,000 pay cap but little about the 23,000 staff who cannot receive just reward for their work.

Structured profit-sharing arrangements are common across the European banking sector, and it has been European Union policy for thirty years.

Structured profit sharing is widely recognised as an incentive to encourage long term loyalty, engagement, and productivity within an organisation.

Between them AIB and BOI announced this year dividend pay out to shareholders and share buyback schemes worth a combined €317 million. It is time that people working in the sector get just reward for their huge contribution to the transformation of the sector.

The FSU call on all retail banks to implement a structured profit-sharing arrangement.

This will help reward, retain, and recruit staff into the sector and ensure that the retail banking sector has a new, inclusive, and bright future.”