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Monday 11 December 2023 Dublin: 10°C

AIB says it 'will not proceed' with plans to make 70 branches cashless in wake of massive backlash

The bank confirmed the news in a statement this afternoon.

AIB HAS ANNOUNCED that it will not proceed with its decision to close cash services at 70 branches around the country from late September due to “customer and public unease”.

It comes after the decision prompted widespread concern across the political spectrum, including Taoiseach Micheál Martin calling on the bank to reconsider.

In a statement this afternoon, the bank said there has been a dramatic increase in the use of digital banking services and a decline in branch visits and cash usage in recent years.

“In AIB’s case, there are 2.9 million daily digital interactions compared with 35,000 customer branch visits. There has been a 36% decline in cash withdrawals from ATMs and a 50% fall in cheque usage over the past five years.”

The statement said it has also seen a fall of almost 50% in branch over-the-counter teller transactions, while mobile and online payments have increased by 85% in that same timeframe.

“It was in the context of this evolving banking environment and the opportunity to enhance its long- standing relationship with An Post that AIB took the decision to remove cash services from 70 of its branches,” the statement said.

“However, recognising the customer and public unease that this has caused, AIB has decided not to proceed with the proposed changes to its bank services.

“The bank continues to retain its 170-strong branch network in its entirety and will also continue to offer banking services through its relationship with at An Post at its 920 post offices nationwide.

The decision has been welcomed by Minister for Finance Paschal Donohoe, who said that banks have a key role “in maintaining the flow of cash through the economy and ensuring appropriate access to retail banking services for all in society, including the vulnerable”.

“I note the significant public reaction to AIB’s announcement earlier this week and I welcome the Bank’s decision not to proceed with the proposed changes to customer services in certain branches,” he said.

“We have seen many changes to our banking sector in recent years, driven by factors including advances in technology and changing consumer demand. It is against that background that I launched the Retail Banking Review to assess how the sector can be best positioned to meet current and future customer needs.

“I look forward to receiving the recommendations of the Review later in the year,” he added.

Sinn Féin spokesperson on Finance Pearse Doherty said the bank’s reversal was “a welcome one”.

“It is clear that AIB has climbed down from these disgraceful plans in response to a groundswell of anger from customers, communities and civil society and the fact that the State maintains majority ownership of the bank,” he said.

This needs to be a clear warning shot to government not to continue its plans to sell-off AIB shares and pass the bank into private hands.

He said serious questions remain regarding how the original decision was reached.

“Removing vital banking services from communities is a serious decision that impacts citizens and businesses – it is not a day-to-day business matter. AIB made this decision without consulting communities or stakeholders,” he said.

Government ‘asleep at the wheel’

“We need to know what communications the bank had, if any, with the Minister for Finance or his Department in the run-up to the original decision being announced.

“As the majority shareholder in AIB, it is clear to me that the Minister for Finance should have been informed. It appears that the government was asleep at the wheel.”

Doherty added that he was “deeply concerned” by the Taoiseach’s remarks that we are moving towards a more cashless society, saying that cash is “secure, inclusive, ensures privacy and freedom – and it is not going away”.

The CEO of the Irish League of Credit Unions (ILCU), David Malone, also welcomed the bank’s announcement.

“Credit unions, as member-owned, community based, not-for profit financial institutions are ideally positioned to support impacted communities and to play an enhanced role in providing a wider range of services and supports to consumers and SMEs throughout Ireland,” he said,

While credit unions continue to ‘digitise’ their services, there is a clear understanding of the importance of retaining ‘face-to-face’ engagement and in delivering the unrivalled member service which credit unions are famous for.

Malone said that credit unions are already beginning to fill the void left by departing banks “with the roll-out of current accounts and mortgages in many credit unions across the country”.

“However, for credit unions to bring additional services to the retail banking sector, credit unions need a level playing field and a more flexible, enabling legislative and regulatory framework,” he added.

He said the ILCU, working with other credit union stakeholders, has contributed to the Retail Banking Review submission, which is being conducted by the Department of Finance.

“We believe that this review is now even more critical, given the continued withdrawal of banking services from local communities.

“It is imperative that credit unions’ essential role in Ireland’s socio-economic fabric must not only be protected but unleashed to its fullest potential. We stand ready to play our part in unlocking this potential.”

The bank’s announcement comes after three Rural Independent Group TDs arrived at AIB headquarters this morning “demanding a meeting” with the bank’s CEO over plans to close cash services at 70 branches around the country. 

‘Great news’ for rural Ireland

Kerry TD Danny Healy-Rae, Tipperary TD Mattie McGrath and Cork’s Michael Collins said they were seeking a meeting following the failure of Colin Hunt to meet with the group “after repeated requests over the last two days”. 

The group were also demanding that the Government recall the Dáil to discuss the matter, and that it should issue a “robust direction to AIB to permanently reverse the entire cashless branch decision”.

Reacting to the bank’s decision, Collins said it was “great news for the people of rural Ireland and for people throughout the country”.

“Our whole reason for being here today was to make sure we got a reversal of that decision, and that’s happened”, he said.

He said he and his colleagues had left their constituencies at 3am and 4am this morning “to fight for the banks in all communities and in communities in rural Ireland”. 

“We had made very clear inside the bank today, who were very courteous to us, that we were not leaving until we met with Conor Hunt, so that we get a very clear message to them of the hurt that they have caused people of rural Ireland,” he said.

He added he was “astonished to think” that the Minister for Finance was blindsided by the bank’s announcement to close cash services “when we own 63.5% of the bank”.

Speaking in Donegal this morning, Minister for Rural and Community Development Heather Humphreys had called on AIB to pause their decision to go cashless.

“I’ve been visiting rural communities all over the country this and they are rightly angry at this decision by AIB,” she said.

AIB have shown a complete disregard for rural communities and have not consulted with them. At the very least, AIB should halt this decision until the comprehensive review of retail banking is complete later this year.

Humphreys said that while more people are using cards and moving away from cash, small businesses and older people in particular depend on these services. 

She said the review of retail banking is looking at “the entire landscape of retail banking in Ireland including the business model, consumer choice and expected trends over the coming decade”.

“I believe it would make sense for AIB to halt this decision and await the outcome of that review.”

Finance Committee

Chairman of the Oireachtas Joint Committee on Finance, Fianna Fáil’s John McGuinness confirmed yesterday that AIB had agreed to appear before the Committee early next month over the decision to make 70 branches cashless.

He said that the Committee were also liaising with both Finance Minister Paschal Donohoe and the Central Bank around appearing before the committee.

In a statement, Fine Gael Senator Sean Kyne said that AIB must still come before the Oireachtas Finance Committee to explain how the decision came about, “causing such shock and worry to businesspeople and vulnerable customers all around the country”.

Sinn Féin spokesperson for Public Expenditure and Reform, Mairéad Farrell said the Government have been “caught on the hop” and need to explain why this was the case.

“Customers need to know exactly how this debacle came about and need reassurance that it will not happen again. This means that the Finance Committee meeting on this matter must still go ahead, so that customers can get these vital answers and assurances from the Finance Minister and senior AIB figures,” she said.

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