Union: Going ‘off-street’ could backfire

The bank union IBOA has warned that AIB’s move off-street — forcing its customers to bank online or by phone — could backfire as was proven by the Ulster Bank fiasco.

The bank is closing 67 locations across the Republic, including eight in counties Donegal and Limerick, seven in Cork, six in Dublin, and four in Kerry.

While it will introduce four “mobile banks” covering 31 rural locations across Donegal, Mayo, Galway, Clare, Tipperary, Limerick, Kerry, and Cork, it wants more customers to control their accounts electronically.

“One of the key assumptions behind this retreat from the Main Street is that customers will conduct their business online or by phone,” said the finance trade union’s leader Larry Broderick.

“But the recent experience of Ulster Bank demonstrates how dangerous it can be to put all your eggs in the technology basket, no matter how attractive the proposition might seem at first glance.

“The saving grace for Ulster Bank in the recent crisis was the performance of its human assets — the staff on the frontline — who could interact on a personal level with individual customers.”

He said Ulster Bank’s own programme of redundancies, which had been agreed before the crisis, has now been put on hold pending a review of the bank’s operations in the wake of the RBS computer glitch.

“AIB’s solution of providing a limited range of basic banking services through An Post’s branch network is by no means ideal,” he said. “Since An Post’s future operational decisions are likely to be dictated by its core business — delivering mail — they may not necessarily coincide with the needs of bank customers.”

Fianna Fáil’s finance spokesman Michael McGrath said communities across the country would suffer with the closure of so many branches.

“AIB will have to ensure that these communities will be offered essential banking services at their local post office before any branch closures are allowed to take place,” he said.

Mr McGrath also claimed the bank may be looking for “considerably more than the 2,500 redundancies it has publicly identified”.

“Today is also another black day for staff at AIB, many of whom will now have little choice but to avail of the ‘voluntary’ redundancy programme in place,” he said.

He said the closures, combined with the 0.5% variable rate mortgage increase “is further evidence that AIB has some distance to go on its painful journey to become a ‘pillar’ bank in the true sense of the word”.

“Many people will justifiably feel aggrieved that this is the thanks they get from a bank that has received over €20bn from Irish citizens,” he said.

The Irish Farmers Association said the branch closures, coming in the wake of recent similar announcements by Permanent TSB and NIB, will cause concern among rural customers.

“It is critical that the bank moves to reassure its farmer customers that a personal banking service will be maintained,” it said. “A strong working relationship between the farmer and his bank is an important part of any viable farm business. We have seen in recent weeks the continuing need for a responsive banking system that is aware of the challenges of the farming sector in 2012, arising from the difficult weather conditions and soaring input costs.”