Union calls on Government to outline strategic vision for Irish banking

Issued : 17 July 2012

Prospect of banking no-go areas in many parts of country

The Irish Government has been challenged to outline a strategic vision for the future of Irish banking by the trade union representing the majority of bank workers in Ireland.

Reflecting on recent media speculation about the closure of hundreds of branches by retail banks at its monthly meeting today, the Executive Committee of IBOA The Finance Union said that, in the absence of a co-ordinated plan for the financial sector as a whole, there is a real danger that many areas could be without any kind of physical presence by any of these banking groups.

IBOA General Secretary, Larry Broderick explained: "In recent days we have read commentary in the media questioning the need for branch banking in the future - which has in turn generated speculation about the number of branch closures being contemplated by the major institutions. This commentary and speculation has been deeply unnerving for bank staff and customers.

"While some banks have made general statements about restructuring, only one institution has so far confirmed specific closure plans. National Irish Bank has announced its intention to shut down its entire branch network. National Irish Bank has tried to justify this approach on the basis that the majority of its customers now conduct their business online or by phone.

"However, the recent experience of Ulster Bank demonstrates more graphically than any words how dangerous it could be to put all your eggs in the technology basket, no matter how attractive the proposition might seem at first glance. The staff in Ulster Bank have been immense during this crisis. Ultimately, they could make the difference as to whether the bank is able to retain business when the crisis subsides. They have demonstrated that when the going gets tough, there are some kinds of customer service that can only be delivered by living human beings. So any senior managers in some institutions who may have been getting carried away a month ago with plans for a brave new world of automated banking, should now think again.

"But aside from these operational concerns, there is also a bigger strategic question for Government especially with so much of Irish banking now in State ownership. If banks are allowed to operate entirely in their own self-interest - with no regard to the broader economic and social consequences, then we will have learned nothing from the recent baking crisis. In the absence of any comment from Government to the contrary, it appears that State-controlled banks may be allowed to close branches as they see fit without any regard for the impact on the local community. If some time in the future one or both pillar banks is sold off to a foreign buyer, as Government policy currently seems to favour, then the insensitivity to local needs is only likely to be increase. It is hard to imagine how a senior executive in London, Frankfurt or Madrid, would take heed of any representations from Ireland - especially if the institution was no longer subject to oversight by the Irish regulator.

"This may be the Government's position. It may not. No one can say with any certainty because - for all of the Government's interventions in Irish banking in recent years - we have yet to hear a clear vision enunciated about the future of the sector. If there is any joined-up thinking by the authorities, we have yet to see the evidence," said the IBOA leader.

"From our perspective of reviewing the trends emerging throughout the sector and throughout these islands, IBOA has found major issues of concern - not only in short-term developments but also in the possible scenarios arising in the medium to longer term. We need engagement - not only for the sake of our members, but also for the sake of the customers and the public at large. The capacity of Irish banking to contribute positively to economic and social development was never more essential. But this will not happen on the basis of a laissez-faire approach from Government.

"IBOA is willing and able to play its part in this national conversation. Indeed we would welcome a meeting with Government at the earliest opportunity in order to initiate this process. With this in mind, we are writing to the Taoiseach and the Tánaiste. In view of the possible impact of these developments for Northern Ireland, we are also seeking meetings with members of the Northern Ireland Executive."