Finance union chief to retire after 32 years fighting automation
Union head calls for State to maintain bonus cap on bank executives’ salaries
Financial Services Union general secretary Larry Broderick has ruled out joining corporate boards after he retires next year. Photograph: Tommy Clancy
The head of the Financial Services Union (FSU), Larry Broderick, has called on the State to maintain a bonus cap on the bailed-out banks and set out a strategic vision for the industry as he announced he plans to retire next year.
Mr Broderick joined the union, formerly known as the Irish Bank Officials’ Association, 32 years ago and became general secretary in 2001. The organisation has begun an international search for a successor, expected to be named early next year, who will faced the challenge of increased job uncertainty as banks resort increasingly to digitalisation and artificial intelligence.
“We’ve been here before. When I joined here in 1984, it was after a dispute between the union and the banks about putting 15 ATMs across the whole of the industry,” said Mr Broderick said in an interview with The Irish Times. “The banks themselves, other than saying things can be done more efficiently, are not sure about what [the ultimate impact of digitalisation] looks like. They don’t know what their staffing complement is going to look like.”
The Irish Times reported last week that Bank of Ireland aims to cut more than 1,000 jobs from 2019 as the group comes to the end of a €900 million project to overhaul its technology systems. The figure, arrived at before the bank’s new chief executive Francesca McDonagh took over last month, equates to almost 9 per cent of its 11,208-strong workforce, which has shrunk by 30 per cent since 2008 as lenders across the industry sought to slash costs in the wake of the financial crisis.
The FSU estimates that banks in Ireland have eliminated 25,000 jobs in a decade of unprecedented restructuring as bailed-out lenders’ businesses contracted, overseas-owned lenders such as Bank of Scotland, Danske Bank and ACCBank retreated from the market and Anglo Irish Bank and Irish Nationwide imploded.
As Irish lenders and peers globally have focus on outsourcing in the past decade and currently find themselves weighing ventures with financial technology companies, the FSU is targeting fintech firms to attract new members.
“There’s going to be loads of jobs in the fintech sector,” said Mr Broderick. “The role of the union is more important today than it ever ways in a kind of environment when you are talking about artificial intelligence and bringing in people on short-term contracts and then ditching them.”
A mistake by the wider trade union movement in recent decades has been “that we’ve been more focused on looking after the terms and conditions of existing members and, to an extent, people coming in have been given different terms and conditions of employment,” Mr Broderick said. “If there’s a lesson, we have to be even more concerned about people coming in after us.”
Meanwhile, Mr Broderick said he is most concerned that banks have not learned lessons from the past, as the industry deals with a controversy where up to 30,000 borrowers were wrongly denied low-cost mortgages tracking the European Central Bank benchmark or were put on the wrong rate.
“One would have thought that having gone through [the crisis], installed new management teams and rebuilt their profitability, that the banks would have worked on trust, treating customers fairly, and building brands that look after staff,” said Mr Broderick. “That seems to be lacking at the moment.”
While Minister for Finance Paschal Donohoe last week ordered the Central Bank to prepare a report for him “on the current cultures and behaviours” of banks as a result of the tracker issue, Mr Broderick said the State needed to take a more broad-sweeping approach.
The FSU is looking for the State to examine what kind of banking sector the Irish economy needs in the long term, the Government’s remaining stakes in banks and regulation of the emerging fintech sector.
Mr Broderick also said that the State should not remove an effective ban on bonuses at bailed-out banks which has been in place since the onset of the financial crisis. The restriction was reinforced by a measure in that the 2011 Finance Bill, which imposed a 90 per cent tax on such payments.
“I think there’s a strong argument in having a relationship between what the chief executive and the lowest-paid member in an organisation receive – and it should not be bonus-related,” he said.
Mr Broderick, who turns 60 next year, said he plans to do pro-bono charity work when he retires next year, but has ruled out joining corporate boards, as such a move would “compromise” him and the FSU.