The covid-19 pandemic and its related lockdowns have had a number of effects on the financial landscape both in Ireland and worldwide. One of the biggest effects has been the shift to contactless payments and online banking. This trend was only increased due to lockdowns, as the bank’s physical locations were closed, leading to more customers accessing their money online or through the bank’s app.
On Tuesday, Allied Irish Banks (AIB) said that it had conducted a “detailed strategic review” to examine the changes in how customers interact with banks. In the review, the bank stated that “Following the unrelenting shift in customer preference for digital banking over the last number of years, AIB is announcing the amalgamation of 15 branches in locations across the country by December this year”. The vast majority of these 15 branches being closed are in urban and suburban locations in Dublin and Cork. Accounts in the closing branches will be moved to neighboring branches, and these closures will leave AIB with 170 remaining physical branches. About 100 AIB employees will be affected by this decision, and the bank said that is communicating with staff. This comes after AIB cut 1,500 jobs and left three of it’s Dublin offices last December.
AIB says that these are necessary changes to evolve to a market that is currently seeing increased competition from non-traditional lenders. Managing director of AIB Retail Banking Jim O’Keefe says that while the bank is committed to maintaining its presence in Ireland’s towns and communities, they are seeing a need to evolve their services to the needs of their customers. To support this statement, he added that customers currently interact with AIB’s mobile app 1.54 million times a day, in contrast to just 35,000 visits to AIB’s physical branches.
Despite the data showing that consumers’ demands are shifting drastically away from physical banking to online, the decision to close branches has been met with much criticism from organizations like the Financial Services Union (FSU). The FSU said there was a “social obligation” on the banks to help struggling SMEs to recover from the pandemic, but said it was “clear our two main banks have placed additional profits before their societal obligations”. The FSU also accused banks like AIB of using the pandemic as a cover to ignore the needs of customers, removing crucial services from communities across the country to line their own pockets.
Michael Kilcoyne, Chairman of the Consumers Association also had some choice words regarding the matter. he called the closure decision “appalling”, further stating that “They have no regard whatsoever for the consumers who made them what they are. And the service from AIB is terrible despite all the money taxpayers put into it.”
