The public has a right to adequate banking services – and banks like AIB need to remember that

Allied Irish Bank’s announcement that it was converting 70 branches to cashless outlets sparked panic and anger and the decision was rightfully reversed. The plan’s one-fall swoop scale shouldn’t have even been considered.

n recent decades decisions by this bank have caused tremendous hardship and AIB would be well advised to show more consideration and humility in the future. The bank’s acknowledgment of “public uneasiness” at the announcement should have been foreseen and would have been if management had been attuned to the communities it claims to serve. Questions remain as to why and how the decision was made, which are expected to be addressed before the Oireachtas Finance Committee. AIB and Treasury Department officials are required to attend these meetings where they can expect a thorough scrutiny.

Ireland’s retail banking sector is undergoing significant change as some incumbent banks exit and new entrants and other providers assume expanded roles. These changes have caused a great deal of concern among customers, as anyone who has dealt with a bank in recent times would attest.

Technology is driving a fundamental shift in the way most banking services are delivered, but the significant impact of change on consumers, businesses and the wider economy needs more consideration.

Last year the Bank of Ireland went cashless in 88 branches and a similar program is being implemented by the smaller Permanent TSB, which has announced the withdrawal of cash services from 44 branches.

The pace at which these announcements are made needs to be slowed down and more consideration given to alternatives that need to be created for the many people who are not up to date with the digital revolution.

The proposal to develop a community banking sector here is justified. The increasing role that credit unions and An Post play in providing banking services to the community is a key element of this conversation. Community banking should place more emphasis on a local dividend than, in the case of AIB last week, on shareholder gains.

Since the global financial crisis, the number of banks in Germany has fallen from 12 to five, with the upcoming exit of KBC and Ulster Bank announced in 2021 to three. Since 2014, around 250 bank branches have either closed or are scheduled to close, accounting for nearly a third of the entire nationwide network.

Recent announcements regarding the exit of Ulster Bank and KBC and the closure of branches elsewhere provide an opportunity to look at the structure and future of the banking sector. Technological advances, the entry of innovative fintech players and the expansion of lending to non-banks mean a more diverse banking sector is emerging.

Against this background, the government announced a review of the banking sector. The public consultation period ended earlier this month. AIB should have awaited the outcome before announcing its intent last week. The public has a right to adequate banking services – and banks like AIB need to remember that

Fry Electronics Team

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