AIB reverses plan to make 70 banks cashless following ‘public unease’

AIB has said it has “decided not to proceed” with the proposed changes to its bank services that would have seen a further 70 branches no longer process cash.

In a statement on Friday morning, the bank confirmed the U-turn in its policy.

The move was welcomed by Minister for Finance Paschal Donohoe.

“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,” he said. “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.”

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Taoiseach Micheál Martin had earlier called on the bank to reconsider the policy. “I think AIB should reflect on this. I think the banks are part of society; they’ve got obligations as well in terms of the social contract,” he said from Singapore.

“In recent years there has been a dramatic increase in the use of digital banking services and a decline in branch visits and cash usage,” AIB said in a statement. “In AIB’s case, there are 2.9 million daily digital interactions compared with 35,000 customer branch visits. There has been a 36 per cent decline in cash withdrawals from ATMs and a 50 per cent fall in cheque usage over the past five years.

“AIB has also seen a fall of almost 50 per cent in branch over-the-counter teller transactions, while mobile and online payments have increased by 85 per cent in that same time frame,” it said. “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.

“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.”

Earlier, Minister for Rural and Community Development Heather Humphreys had called on AIB to pause its decision to go cashless at 70 branches nationwide.

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

“We know more and more people are using card and moving away from cash, but small businesses and older people in particular depend on these services.

“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.”

Minister of State at the Department of Finance Seán Fleming said he and the Government had been “blindsided” by the decision and that the Minister for Finance and his department had been informed only shortly before it was announced.

It was not up to the bank to dictate to customers how they dealt with the bank, he said, adding AIB should focus on the needs of its clients instead.

AIB had been “well aware” the Government would shortly be publishing a review of retail banking needs in the country, he added.

One of the lessons learned from the banking crisis was that banks needed more supervision, Mr Fleming said. The Government response to the initial AIB decision had “crystallised” the public reaction, he said, adding the decision had been reversed, not paused.

Independent TD Mattie McGrath, who along with TDs Danny Healy-Rae and Michael Collins walked into AIB headquarters demanding to speak to the chief executive, said the bank’s proposal to make 70 branches cashless had been “a faceless bureaucratic decision”. The State had an almost two-thirds shareholding in AIB and as such “surely we deserve better respect than that”.

The decision had been “ham-fisted”, he added. It was also “incredible” to think the Minister for Finance had not been aware of the move. “We will be keeping a very close eye on this,” Mr McGrath said, adding the Rural Independent group of TDs would be seeking a meeting with the Central Bank on the issue.

Meanwhile, the general secretary of the Irish Postmasters’ Union has said the Government would have to invest in post offices if they were to be in a position to provide cash services no longer available at AIB branches.

Ned O’Hara said on Newstalk Breakfast that having cash at locations required security and that providing ATMs was an expensive operation.

“We do welcome the decision to give more business to the post offices, recognising the effect that it has on communities, recognising the impact on bank staff,” he said.

“But in relation to our domain, we need new services. We do provide banking services for Bank of Ireland, and we’ve been providing banking services for AIB for the last 15 or 20 years, and we do welcome the new business, and we do see it as giving us some substance as we go forward in a changing society.”

Mr O’Hara said postmasters believed they could provide cash services for bank customers.

“We do handle a lot of cash, we handle €7.6 billion and all the security that goes along with that. So all those arrangements are in place,” he said.

[ Taoiseach seeks meeting with AIB as he calls for it to reconsider move towards cashless banks ]

[ Cash no longer king in Irish banking ]

[ AIB to pull cash services from 70 more branches amid shift to digital banking ]

“We have highly trained staff, we recognise that there ... will be particular instances for individual businesses where they may handle a lot of cash, where they may have separate arrangements that need to be made. All those things in our view can be dealt with locally, by the local postmaster and the local businessperson coming to an arrangement that suits both parties locally.”

However, he said the Government would have to consider the investment needed if it was to provide ATMs.