AIB’s ‘customer focus’ derided at finance committee after failed cashless plan

Members of the Oireachtas finance committee have pilloried AIB’s “customer-centric” focus after the bank’s chief executive, Colin Hunt, admitted the company had failed to realise how a plan to turn 70 branches into cashless outlets would be met with customer and political uproar.

AIB abandoned the plan within days of the announcement in July and Mr Hunt, who became chief executive in March 2019, said the customer reaction had been “unprecedented in terms of the volume of complaints”.

He has pledged that the plan will not be revisited as long as he leads the bank, which has 170 branches across the State.

TDs and senators on the committee also used its first meeting after the Oireachtas summer recess to press executives from AIB, Bank of Ireland and Permanent TSB not to raise variable mortgage rates or introduce new fixed rates after the European Central Bank last week announced a second increase in the space of eight weeks.

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None of the three banks have yet moved their variable or new fixed-rate mortgage prices in response to the European moves. AIB will make a decision within weeks, Mr Hunt said. Bank of Ireland said it keeps its rates under constant review. Permanent TSB chief executive Eamonn Crowley said his bank “hasn’t moved” on the basis of the ECB hiking its rates by 1.25 percentage points.

On the branch closure plan, Sinn Féin TD Pearse Doherty asked Mr Hunt: “How can you have a customer-centric approach when you are so out of touch with where you customers are? In terms of where people were at, you got this drastically wrong.”

Mr Hunt said that there had been “no shortage of analysis” and that data had backed up the original plan, amid an ongoing decline in branch transactions which was accelerated by the Covid-19 pandemic. The number of customer transactions in AIB branches has fallen by 35 per cent over the past three years, while those in cash and cheque lodgement facilities have almost halved, he said.

Fianna Fáil TD Jim O’Callaghan said he was concerned that AIB’s non-executive directors were not in tune with the bank’s customers in rubber-stamping the ill-fated plan. Mr Hunt, however, said the bank was “very lucky to have a very experienced and a very diverse board”.

He insisted that the proposal to withdraw cash services, including ATMs, from the 70 branches, was to make the outlets more viable and maintain its existing network, which he was a “distinguishing feature” of the group.

However, he acknowledged that the bank had failed to “recognise and appreciate the importance of cash for a number of our customers” and that the lesson “is that you can’t get too far ahead of your customers”.

Mr Hunt confirmed that the bank had forwarded the Department of Finance a copy of documents sent to board members a week ahead of a meeting in late June, which contained the proposal on the cashless branches. Copying the department in on board packs is standard practice under a relationship agreement between the bank and the Government following the bank’s €20.8 billion bailout.

Officials at the department were also apprised of the branches decision four days before the announcement, he said. However, the bank came under intense political pressure two days later with Taoiseach Micheál Martin calling the bank asking it to “reconsider” its position.