Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): The Financial Services Union (FSU) is a union on the island of Ireland, the membership of which works in all sorts of roles in banks of all sizes. The FSU is here to give us an initial briefing that will inform our work. Thank you very much to the FSU representatives: John Burns, president; John O'Connell, general secretary; and Brian McDowell, head of communications and public affairs. I do not know which John wishes to give the opening statement. Is it you, John O'Connell?

Mr John O'Connell (Financial Services Union): Yes, if that is OK.

The Chairperson (Mr O'Toole): That would be really helpful, and then we will have lots of questions. You are aware that we just had a briefing from the Assembly's in-house Research and Information Service (RaISe). We are starting a piece of work that will be either a dedicated work stream or formal inquiry on the state of banking and financial services in Northern Ireland. Your organisation is the first external witness for that piece of work, and it is an apt one. Please go ahead with your opening statement. We will then ask some questions. As always, members, please indicate should you wish to ask a question.

Mr O'Connell: Chairman and Committee, thank you very much for the invitation to speak today. The Financial Services Union is the leading trade union for the banking sector in Northern Ireland and the Republic of Ireland. We represent members — your constituents — in securing better pay and conditions in the workplace. Our purpose is to support, enable and empower members to achieve their career ambitions, while leading the development of a sustainable and ethical financial services sector. We have a vision of being a union that is at the heart of the financial services community, is progressive and is recognised as supporting, representing and enabling its members, while protecting the interests of consumers.

The last time we presented to the Committee, Ulster Bank had announced that it was exiting the retail banking market in the Republic of Ireland. As we mentioned at the Committee, that announcement had the potential to have a direct impact on the jobs of over 500 staff in Northern Ireland, whose role was to support Ulster Bank operations in the Republic. I thank members of the Committee and others across the political parties in Northern Ireland for their support, which helped us to save over 150 roles in Northern Ireland by working with NatWest to offer new roles to the staff impacted by the decision who wished to remain working in Ulster Bank.

The Chairperson (Mr O'Toole): There were job losses. There were not as many as you feared, but there was a loss of 300-plus jobs.

Mr O'Connell: There was a loss, and the numbers looked catastrophic. However, some people chose to take different career paths at that juncture. With the assistance of NatWest and political support across the spectrum, we engaged with NatWest at the most senior levels and convinced it that there were people who wished to remain working in Ulster Bank, and they were allowed to remain, including through remote working.

The Chairperson (Mr O'Toole): They, effectively, did client work in the Republic that no longer existed because Ulster Bank was divesting from the South.

Mr O'Connell: Yes, because Ulster Bank was removing itself from the South.

Today, I would like to focus on the future role of retail banking; how changes made without proper consultation and agreement can have a detrimental effect on communities, staff and business; and how a stakeholder approach to managing change can lead to better outcomes for all in a constantly changing environment.

The FSU called for a banking forum to be established in Northern Ireland back in 2020. We congratulated the then Minister of Finance, Conor Murphy MLA, for agreeing, at the FSU triennial conference in Belfast in 2021, to create a round-table discussion forum on the future of banking. The first meeting, involving all relevant stakeholders, was a success, with issues such as access to cash, branch closures, banking hubs and financial literacy on the agenda. It resulted in a paper being submitted to the Treasury in London with clear recommendations to support the sector and its staff and customers.

The Chairperson (Mr O'Toole): Is the paper available? I have not seen that.

Mr O'Connell: It is, yes. We have a copy here that we can make available to the Committee.

The Chairperson (Mr O'Toole): Great. Thank you.

Mr O'Connell: The fall of the Executive shortly after meant no further round-table discussions occurred, but we are delighted that, after our meeting earlier this year with the current Finance Minister, Caoimhe Archibald MLA, the banking forum is to resume in November. That is an important and welcome announcement. The forum gives us all a stage to set out our ideas and agree together on what the future of retail banking should look like.

The issues that we raised at our previous meeting with the Committee are still as relevant today. Despite the call by our union, supported by politicians from all political parties and communities and businesses from across Northern Ireland, banks are still closing branches and leaving communities bereft of local banking services. Danske Bank and Ulster Bank have closed branches this year, despite knowing that the closures will have a particularly detrimental effect on vulnerable people and small businesses. Post offices are also closing, leaving communities bereft of any financial support.

The new hot topic is replacing branches with banking hubs. To be clear, a banking hub is no replacement for a full working branch. An individual sitting with a laptop one day a week offering minimum banking services is not what businesses or communities require. Hubs can, like a post office, complement the offering of banks, but they cannot replace them. We have three hubs in Northern Ireland: one opens five days a week; one opens four and a half days a week; and the other opens four days a week. It is not a full banking service as we know it, nor does it offer the same access to banks.

The Chairperson (Mr O'Toole): They are in Portrush, Kilkeel and Warrenpoint.

Mr O'Connell: Correct. Warrenpoint opened yesterday.

The Chairperson (Mr O'Toole): Breaking news.

Mr O'Connell: We understand that LINK will also address the Committee. LINK is a bank-funded initiative and should have clear operating criteria, including that it is not a solution to closing more branches. We ask that LINK, which has the responsibility to state whether a hub is required in a particular location, be required, as part of its remit, to talk to local people and businesses to ascertain their views prior to a decision. We also ask for full transparency, including that LINK publishes its findings and presents them to local councils; and that, on a regular basis, LINK is called to the Committee to explain its recommendations. It is in everyone’s interests that we have a process that is fully transparent and inclusive.

Prior to holding the FSU triennial conference in Belfast in May, we partnered with Ireland Thinks, a polling company, and commissioned research into the views of people in Northern Ireland on several topics in relation to retail banking. One question that we asked was:

Some 59% of respondents said that it was very important, and 28% said that it was somewhat important. The second question was:

Ninety-one per cent, which is a significant percentage, said that they would like to have a choice of channel. Thirdly, we asked:

Eighty-seven per cent said yes, which, again, is a strong endorsement. There are institutions across the globe that are giving that commitment. The Commonwealth Bank of Australia and Nationwide in the UK have made commitments to maintain the current level of branches.

Retail banking in Northern Ireland is evolving, and changes to the structure and purpose of retail banking are taking place. Our view, which is validated by the research, is that those changes are being implemented by the banks for the banks, and that the interests of consumers and staff come a distant second in banks' priorities, as profits trump all other interests.

The Financial Services Union wants to see a thriving banking sector. We want to see a sector that is profitable and sustainable and that rewards its well-educated staff. We want to see a retail banking sector that is based in the community, looks out for business, advises and supports vulnerable people, and offers a banking channel that people want to use. That is also what our members want, as the research tells us. It is important to acknowledge that banks are starting to invest in some branches, but it is vital that they invest in all branches without exception. There should be a blended model of banking that has the user of the services at the core of its business plan, that rewards its staff, that provides good places to work and that people can trust. The FSU contends that, as part of that blended model of banking, banking hubs are complementary to the existing banking structure and not a replacement for community bank branches.

We ask for your support in calling for a moratorium on branch closures for the next five years. That would protect existing services and give us time to manage the change that is coming, with a focus on what is best for people, communities and business. As I said, Nationwide in the UK and the Commonwealth Bank of Australia have made commitments to maintain branch networks at current levels.

I will also talk a little about access to cash —

The Chairperson (Mr O'Toole): Are you saying that Nationwide is the only bank that has —

Mr O'Connell: It is the only UK bank that has made that declaration. NatWest has declared —

The Chairperson (Mr O'Toole): Is Nationwide still technically a building society?

Mr O'Connell: I think that it merged with Virgin Money UK very recently or is in the process of merging, so I would say that it is a full bank in that context. In this jurisdiction, NatWest — Ulster Bank — has given a commitment until the end of 2026. That is helpful, but we want to build on that.

I will talk a little about access to cash, and financial literacy. The new access-to-cash legislation is welcome. It was raised and discussed at the most-recent banking round-table meeting, and the FSU raised it in subsequent discussions with the Financial Conduct Authority (FCA). Northern Ireland, as an economy, has a particular reliance on access to cash. We would like to see ATMs that have been removed over the past few years replaced, and those areas of business that have gone cashless required to accept cash as a payment.

We would like to see a financial literacy programme funded and rolled out in communities across Northern Ireland. A large number of people are vulnerable to financial exclusion; have no access to advice and support; and are open to financial manipulation and worse. It is our duty, and a societal duty of the banks and legislators, to protect, support and educate people on how best to manage their finances.

We are delighted that the new Minister of Finance has reconvened the banking round table, and we look forward to discussing those and other issues with all relevant stakeholders. A thriving banking sector that is inclusive and transparent is good for employers, employees, communities and business. That is an achievable aim if we work together.

Members of the Committee, in summary, we ask for your support for no branch closures for five years; Government support for financial literacy education for consumers; transparency from LINK on the roll-out of hubs; and a commitment to communities on access to banking services. Thank you again for the invitation to speak to you. I look forward to answering any questions that you may have, together with my colleagues.

The Chairperson (Mr O'Toole): Thank you very much.

The story of employment in the financial services industry matches the story of the shrinkage of the bank network and the digitisation of banking services generally. Can you give us a sense of how employment in financial services in the front office, as it were, or in customer-facing financial services, as opposed to other jobs, has decreased? Other jobs have been created for fintech, and other back- and middle-office roles have moved here. We welcome those, but they do not necessarily serve the "real" economy on the high street, as it were. Can you give us a sense of how the numbers of people in customer-facing roles has decreased?

Mr O'Connell: Yes. Over the past number of years, digitisation has had an impact. The unprecedented level of branch closures that we have seen over the past couple of years has had an impact. Human behaviour, influenced a lot by COVID, has also had an impact. Banks operate lean staffing models. In lots of instances, banks do not have leave reserves: if you work in departments and you are on leave, you self-cover. Over the past five years, in particular, there has been a decline in staffing numbers, not just in Northern Ireland but across the UK and in the Republic. In banks such as AIB and Bank of Ireland, there would have been 20,000 staff at the height of —

The Chairperson (Mr O'Toole): Was that 20,000 in AIB and Bank of Ireland together or in each?

Mr O'Connell: No, each would have had about 20,000. Each now has about 10,000.

The Chairperson (Mr O'Toole): Is that just in Northern Ireland, not across the island?

Mr O'Connell: That is across the island.

The Chairperson (Mr O'Toole): OK. It would be much less than that now, obviously.

Mr O'Connell: Yes. Each has about 10,000 now. Each had about 20,000 at their height, when they were larger groups. Equally, those banks had to divest when the crash came. Every bank crashed, but the Republic of Ireland banks crashed spectacularly.

The Chairperson (Mr O'Toole): Indeed, we are still dealing with some of the consequences of that in our banking on both parts of the island.

We may take evidence at some point from representatives of the banks, but I remember discussing branch closures with you in the previous iteration of the Committee a couple of years ago. I got the general impression that all four big banks in Northern Ireland have some level of all-island nature. There are other English/British banks. Ulster Bank is part of NatWest, which is still 20%-owned by the UK Government. AIB is still approximately 20%-owned by the Irish Government. Bank of Ireland has, in the past two years, become private again, and the Irish Government have divested. Danske Bank — the inheritor of Northern Bank/National Irish Bank, which was another effectively all-island bank but is not anymore — was alone of the four in not having to be bailed out, as far as I am aware.

My general impression is that, because perhaps there was ownership of some of those big banks either in London or Dublin, it was viewed to be impolitic to proceed with certain branch closures at a certain pace, but, because some of the political power that could have stopped that happening did not rest in Northern Ireland, it was easier to shut branches on this side of the border or on this side of the Irish Sea. That is my perception. It may be wrong. What do you think?

Mr O'Connell: Certainly, if the head office is based in the jurisdiction, you have a better chance of influencing. Banks are influenced by culture and local employment, whereas we find that, if it is done remotely —. At one stage, Danske Bank, when it was Northern Bank, was owned by National Australia Bank. That was really remote. It made decisions and just implemented them with no sense of or feeling for the local community. Outsourcing and offshoring also happened quite a bit. At long last, regulators now take a keen interest in holding boards to account on outsourcing and offshoring. The conditions that some people work in are now under the spotlight, with regulators asking the right questions and holding board members to account. It is no longer feasible to say, "An IT glitch occurred. We do not know what happened". You have to be accountable.

The Chairperson (Mr O'Toole): I welcome the fact that the banking forum will resume. We, as a Committee, will want to understand the terms of reference from the Department. Does the Department chair the banking forum? Does it convene the meetings?

Mr O'Connell: Yes, and it invites all stakeholders, such as the Post Office, credit unions, banks, ourselves, community interest organisations — people who are piloting access to cash and so forth. It has very broad engagement.

The Chairperson (Mr O'Toole): Was what came out previously largely focused on branch networks and access to cash, or were there questions about business banking and other consumer issues?

Mr O'Connell: It condensed down to two issues: access to cash, which covers branches and the future of banking; and change and how that comes about. Part of the debate that we want is about the need for greater community involvement when change comes about. A number of branches on the list of those that were closed this year were the last bank in town. That is, perhaps, overlain with a post office closure in the area. You are leaving people with no service. Very often, there is poor broadband coverage in those areas, so it is a double whammy for people.

The Chairperson (Mr O'Toole): I presume that research has been done into the "last bank in town" stuff. Take as an example not my constituency but my home town of Downpatrick, which, I think, is at or relatively close to the "last bank in town" stage. In towns like that, banks have historically been the place to go for the microbusiness or the person who wants a business loan to start a barber's, a hairdresser's or a small retail business. That is the first place that they might think to go. Has any research been done, perhaps in conjunction with the Federation of Small Businesses (FSB) or Retail NI, into what that means for starting small community businesses and people feeling that they have someone to go and talk to?

Mr O'Connell: There is a good House of Commons Library paper on the impact of branch closures and the impact that those can have on SME lending in particular. I am happy to supply that to the Committee. The impact of a branch closing can be a 64% drop in lending to the SME sector. If the branch is the last bank in town, the percentage impact of there being no availability, particularly on the SME sector, is off the chart. It is about the human side of it. It is about me recognising you, knowing that your business is cyclical and saying, "We can be a bit flexible on the overdraft because I know that, during the summer, you will have a boom time and it will balance out". When that corporate or local memory is gone, you are dealing with not even a person, sometimes, but a computer or an AI bot.

The Chairperson (Mr O'Toole): That is the other question that I want to get at and part of what we want to flush out in this inquiry. In some of our small towns, microbusinesses are at significant risk if there is no bank and no bank manager to talk to. To what extent and how quickly are relatively routine things such as business loans of £10,000 or perhaps more, for example, becoming automated with not just a chat function but loan approval? I imagine that that will be one of the first areas in financial services that is moved to AI, completely.

Mr O'Connell: A fair amount of it is automated up to certain levels, and thresholds are getting higher. You get access to a relationship manager if you are £1 million-plus, but, if you are £999,000, you do not: you have to deal with computers, a call centre, or whatever. Part of the debate that we want to be heard is that banking is also about people. There has been a shift. We know that things are changing — we are not against change — and that, more and more, technology plays a role in banking. However, when people are asked what they value, as they were in our survey, they say, time and time again, that they want their "choice of banking channel". Yes, there are times when your app is perfect for what you want to do, but there are other times when you might have a concern or be entering into a period of unemployment and need to have a conversation with somebody. That is what people value: face-to-face access with somebody who is locally based and with whom you can have a conversation.

Ms Forsythe: Thank you very much for coming in; I appreciate the session. I represent South Down. It is quite rural and includes Kilkeel, my home town and location of the first operational banking hub — I am very closely involved with a lot of the issues around that — and the hubs in Warrenpoint and Newcastle. Finding out in Committee that the Warrenpoint hub opened yesterday is a testament to the lack of ongoing engagement that there has been with elected representatives on the process. I share a lot of the frustrations that you have about engagement.

I want to speak to your asks in your paper, and what we are capable of doing in Committee. You are asking for:

My constituency has had multiple bank closures, from Downpatrick, through the Mournes and down into Rathfriland. Every time that I write to a bank and appeal on behalf of constituents, the bank infers that it is very much a business decision, and quotes the lack of footfall and the cost of overheads, for instance. Your pie charts feed back that people want their bank. Do you have data on how many times people actually visited their bank over a period? I ask that because every time that we fight a bank closure, that is what is pushed back.

Mr O'Connell: You have to be very careful about the data, because, if I go into a bank branch and use an ATM, I am not considered to be footfall. I am only considered to be footfall if I go to the counter and do a transaction. Usually, in the bank, there is somebody — usually one of our members — guiding you to a machine. Therefore, the footfall figures require analysis — probably independent analysis. Overwhelmingly, the data and research say that people want to have the opportunity to visit a branch.

That will be for significant life events, like getting a mortgage or a car loan, or for other reasons. Vulnerable people, in particular, find themselves in situations in which they need to talk to somebody who is able to assist them. That could be at a time of bereavement when they are trying to sort out affairs. Resolving those issues is much harder through a call centre operation or on a computer.

The Deputy Chairperson (Ms Forsythe): It is definitely challenging. You will appreciate that that is very much what we get back, as elected representatives, when we try to make appeals.

I will follow on from the point that the Chair made. I am thinking about Kilkeel, where I had a lot of issues. Two or three branches closed, quite close to each other, and a lot of people transferred their banking to the last bank in the town. It stayed for a little while, then closed. Rather than asking for no branch closures for five years, I wonder whether a more realistic ask would be to look at the last-bank-in-town piece. Is there some way that we can build towards that? Obviously, I want to see all the branches in our towns. I represent a rural constituency, and completely support all the objectives. I get that in my office all the time. However, is there something in the last-bank-in-town piece that we can build on?

Mr O'Connell: There should be a much higher bar for the last bank in town. We would also be concerned, however, that, were we to congregate everything around the last bank in town, that service may rush to try to get out of town.

It is worth shining a light on the example of Ulster Bank announcing that it was going to make 500 people up here redundant, in which there was true political pressure across the divide. We engaged with a lot of people to encourage them to write in and so forth, and we followed up on that ourselves, so that does have an impact. When the Holywood branch was closing, we met the chamber of commerce, which asked, "Does this have an impact?". It does have an impact. We are not opposed to change, but there is a better way to change than the way in which it has been done, which is just to have an announcement and the shutters go down. We are passionate about the issue of financial literacy, because people are left with no service or support, and, at times when they are vulnerable, they need access to that support.

The Deputy Chairperson (Ms Forsythe): Absolutely. You referred to transparency by LINK on the roll-out of the hubs, and it is disappointing to hear that you have not had engagement from those whom you represent in the position that you hold. As an elected rep for South Down whose office is based in Kilkeel, I was able to hound down communications about that closure only by linking into the press and, along with the staff in my office, by regularly chasing the people involved. We were closely involved in that in my home town, but I have not had that level of engagement on the Warrenpoint banking hub opening, because it is not under my nose, day in, day out, and I cannot see it when the premises are being renovated. That is very frustrating.

I support increasing the transparency on what they do. A lot of them are doing good work but are based in England; they are not close to Northern Ireland, so I do not know that they have a full appreciation of the political landscape of contacting the council, local MP or MLA about it. In your paper, you refer to building on engagement with communities. To my mind, that would include engagement with elected representatives and creating a window on what it means. In the Kilkeel example, there is a particular big bank, locally, that is not represented in the hub, and that causes a lot of concern for people.

Would LINK and the hubs be included in the banking forum? Is that a way in which you could get access to those conversations?

Mr O'Connell: Yes. Brian will talk about the transparency piece around the hubs.

Mr Brian McDowell (Financial Services Union): Going back to the data element, the banking review in the Republic of Ireland was set up at the same time as the banking round tables in Northern Ireland. Part of the banking review in the Republic of Ireland involved going out to check the data. That was about going out to gather consumer data so that we could compare what we heard with what was actually happening. When the banking round tables recommence here, we would like it to be included in the terms of reference that they go out and consult and poll people on their views.

There was a recent report in the Republic of Ireland — I think that it was produced two weeks ago — that showed that 94% of people used a branch last year, and I do not see why it would be any different here. That figure of 94% of people with current accounts using a branch last year is completely contradictory to what the banks say when they look to close branches.

The Chairperson (Mr O'Toole): Does that include using an ATM at the branch?

Mr McDowell: It did not go into that detail, to be honest. There is a lot of detail in the report; it is a 100-odd page report that goes through things such as footfall in branches. More people were using a branch this year than last year, so it is going up rather than down.

I will get on to LINK. Cash Access UK is giving evidence following our session. It runs the hubs. As you know, LINK goes out and assesses an area before the branches close. The Chair mentioned Downpatrick. The assessment from Downpatrick is now online, and not once does it mention any consultation with local politicians, businesses, consumers, anybody who uses the bank or any vulnerable people or NGOs that represent vulnerable people. None of that consultation seems to be done whatsoever. We are looking for clarity on that; we have asked. However, our understanding is that no consultation is done. It is very much a paper exercise to find out how many people live in the area, how many have accounts in the area and where the nearest ATM is. It does not go into the detail of what you need when you are looking to close a branch and of the effects of a closure. We are looking for absolute transparency. We are looking for a lot more consultation.

You can appeal the Downpatrick one. It came in on 2 October, and you have 28 days to appeal, but nobody knows that it has happened. How can you appeal something when you do not know that the assessment has happened in the first instance? It is quite extraordinary. That is in the regulation, so I am not having a go at LINK. I am just saying that it should be looked at. We are meeting the FCA next week. We have brought it up previously, but, with your support and that extra pressure, maybe it is something that it should look at.

John mentioned financial literacy. It takes no account of the financial literacy in that area or whether people are able to manage their money. They may be able to access it, but they are not getting the advice that they may have got on how to manage their money because the branch is closed. Local businesses might know their local branch manager who knows that January is not a great month for them but that they will come back in February or March. All that advice is gone when the branch closes, and, again, that is not measured when LINK assesses the effects of a branch closure. We are looking for a lot more to be brought into it, and a lot more consultation on it.

Ms Forsythe: The consultation piece is the most important. You referred to the fact that banks are closing in partnership with post offices, particularly in rural areas. Putting a Post Office desk at the back of a supermarket, where people are trying to have private banking conversations, is not well received. The hubs are good for

but the most feedback that I get is about access to cash. People want to check their balance and get their cash; the hubs do not come hand in hand with ATMs; and they are open nine-to-five, which means that people cannot get cash in the evening or at the weekend. That is the most common feedback that I get. As you said, people do not realise, sometimes, what they use their bank for until it is not there, and then it is too late because it has closed. Once you close something, it is a major ordeal to get it back open again, and very few people will take that decision.

I really appreciate your input and all the detail. It is really helpful to our ongoing work. The banking piece is not devolved here, but one of the main things that people are raising is access to services, especially for older people and more vulnerable people, who struggle with online literacy to banking services. It causes a lot of stress. They are travelling a distance to lift money and are travelling back with it, and they do not feel safe. It is a common issue that I get. I look forward to further engagement with you.

Mr McDowell: We went out to two areas — Carrickfergus and Saintfield — where branches were to close. Of course, the assessments were done on the effects, and there were no recommendations and "nothing to be seen here". We went out, and, normally, it is hard to get someone to go in front of the camera to be interviewed, but the local business people were out talking about the direct effect that it would have on their businesses. Local people, who were using the branch before it closed, were also saying that it would have a detrimental effect on them and on the local town.

Mr John Burns (Financial Services Union): Thank you, Chair and Deputy Chair. On the point about access to cash, another element of the change in the financial services landscape, which is a consequence of that, is that members and customers, whom I have spoken with, have provided me with anecdotal evidence of the increase in the reduction of the availability of services as a result of cash not being as broadly accepted. A growing number of businesses will only accept cards, for example. There are all sorts of dynamics as to why that is the case, but there is a consequence for some of the more vulnerable people in society who would be traditional users of cash. They now find that businesses and services that they want to access will only accept cards as payment. It is another factor to put in the mix when considering access to cash.

Ms Forsythe: Thank you.

Mr Carroll: Thanks, everybody, for the presentation. I have a couple of questions. First, my party supports the demands, including the demand for no branch closures for five years. We firmly support that. Over the years, we have corresponded on some of those closures.

John, can you expand on your view of the hubs? You say that a hub is not the same as a bank and that there are limited resources there. Can you tease that out? Hubs are targeted and come across, in the way in which they are being presented, as something shiny and new, but the service is not as widespread as it should be. Can you also expand on the AI involvement in the banking sector beyond, presumably, the ChatGPT stuff?

Mr O'Connell: AI will have an impact. Quite an amount of research is beginning to evolve now on how it will impact generally and on roles. Some of it will be assimilated into roles that will become part of daily usage in work. Other roles, particularly risk roles and roles like that, have been identified as ones that AI could have a huge impact on. It could impact on a significant portion, if not all, of a person's role.

At a European level, we have engaged with the banking employers. We have agreed an overall framework on the impact of AI and support for people to be retrained and repurposed. Often, the transition can be quite brutal for people. We have agreed an overall framework on how people will transition through AI and digitisation. I suppose that that will play out over time.

We do not want to criticise hubs because, if people have no service in a town, they would welcome a hub as a feature. However, it has limited scope. As I said, in the first three openings, the service has varied from five days a week to four days a week. Some of the challenges that people have identified include knowing which day their bank will be there, and, if it is not there, having to wait another week until it comes around again. In the Republic, the Banking and Payments Federation Ireland is on record as saying that hubs have not, as of yet, demonstrated that they are the solution. Challenges that have been identified around footfall and so forth have been a feature of the hubs so far. However, they are very new. As I said, we see them as being, like post offices, complementary to the services that full banking can offer, but people really want to retain their banking service. As I said, in towns where there is no service, people welcome the hubs, but it is very early days for an evaluation of them.

I echo the points that have been made by colleagues about banks making billions of pounds in profits. They can afford to get strong, good PR and so forth. That is where data and analysis by the likes of the Committee can get us to a situation where we are dealing with facts and there is an independence to the data. We recommend that that research be part of the initiative that you have identified.

Mr McDowell: I will come in briefly on that, and hopefully I will not repeat myself. When a hub is recommended, it is recommended for a particular reason; because there is a gap, as it says in the assessment, in the cash access service. The hub is looking out to see whether there is enough access to cash in that local town. It is not looking to see whether there is sufficient financial advice for people or looking out for vulnerable people. I am repeating myself, but, again, it is not recommended because local businesses need a branch. It really is looking at that small element — not small, to be fair — of that access to cash. That is why that recommendation is made; basically, it looks to see how many ATMs are in the area. The rest of what a bank branch can offer is not taken into account.

Mr Carroll: That is useful. Thanks.

I have two other questions. I think that it was John who mentioned the profitability of the banking sector. Do you want to expand on that? Does the union have a view on public ownership of banks? I believe that all banks should be publicly owned. Certainly, big banks should be publicly owned.

Finally, charging people to withdraw their money from cash access points is immoral and pretty disgusting, frankly. Does the union or the members, personally, have a view on that practice?

Mr O'Connell: On the ownership piece, all of us have had experience of that. As you alluded to, Chair, the state still has a significant shareholding in NatWest. Equally, in the Republic of Ireland, two of the three banks are significantly owned by the state. They are not majority owned, but there is significant share ownership. When they were in state ownership, we did not see anything that told us that that was a good thing or a bad thing. It was no different from when they were privately owned. Equally, we have some that are now fully private, and it has not changed their culture. There is either a good culture or not a great culture. The type of ownership is not the big issue. The big issue is how they are regulated and how the voice of the consumer is reflected in their behaviour. Regulation is a big piece of it.

Like the UK, we have similar legislation that provides for a senior executive accountability regime (SEAR), through which individuals, rather than the institutions, will be held to account. None of the big institutions globally even blinked when they were fined millions and millions of euros or dollars, as it was in the states; it did not impact on them. However, the senior accountability legislation is designed to hold people accountable. That is beginning to be rolled out.

As I said, because of the IT glitches that we have all suffered, the regulator is now taking a lot more interest in how the banks do business and the options for people. In the Republic, we had quite a big outage. What was the option? The option was for the banks to stay open late and open on Saturday. You cannot do that if there are no branches in your constituency or town. It is about regulation and the banks taking seriously their societal role. We are not against the banks making a profit, developing technology and so forth. However, they have to take their role in society very seriously, and that includes providing services and a choice of channels for people.

Mr Carroll: Thank you.

The Chairperson (Mr O'Toole): You mentioned profits. Obviously, banks are commercial organisations. That is what they are there for. It is true to say that pretty much every major bank that I have read about has had record profits since the spike in inflation because of rising interest rates. People who have taken out loans will have seen that the interest rates are amazingly good at rising with the bank rate, be that from the European Central Bank (ECB) or the Bank of England. However, the returns for savers are not quite as good. It is true to say that all the banks that we are talking about today have seen their profits increase. I think that I am right in saying that. High inflation generally means more profits for the banks, because they arbitrage between charging more interest on loans while paying less interest on savings. There is a context here to be borne in mind.

Miss Brogan: Thanks for your presentation. This is a really interesting conversation. I represent West Tyrone, which is a largely rural constituency. Access to cash affects many of my constituents, so it is a useful conversation. Although no locations in West Tyrone are making use of banking hubs, as of yet anyway, I wanted to ask you about any concerns that you had — you touched on it with Gerry — around the differences between a banking hub and a normal branch. You gave one example of service users not knowing when the bank might be there or the weekly diary. Do you consider those to be teething problems that can be improved on? What are your views on expanding and improving banking hubs instead of reintroducing bank branches or ensuring that they do not leave in the first place?

Mr O'Connell: There is a balance to be struck. We would say that, if a community has no service at all, a banking hub is much better than nothing at all. I do think that the criteria have worked — the exposure that Brian talked about. The criteria are very narrow in terms of setting up a hub. As you said, if you were to go down the road of expanding services and so forth, you would need to look at the criteria for the hubs and what they are going to provide.

There is no replacement for a full banking service. You can complement it: post offices do quite a good job in that regard in the transactional pieces. If you have a significant piece of business to conduct, however, you cannot do that in a post office because the environment is not conducive, and you cannot discuss loans and so forth. You need a reasonable access to banking services. We make assumptions about that, but, again, I point to the data and the research that is being done on people requiring access close to where they live or work. When it comes to usage, it depends how you measure something. I urge you to use independent data when you come to your deliberations in order to inform your decisions. It is not always apples and apples: it is about getting to the meat of what people value.

OK, banks can make big, eye-watering profits, which is what, I think, the Chair was referring to, in terms of what we have seen. They have a responsibility in that, however. We will meet the CEO of NatWest in the new year, and we have had an ongoing dialogue with NatWest around locating jobs. It employs 67,000 people. There are new developments such as cyber fraud, and we have urged NatWest to locate units in Northern Ireland. It can be bigger than just a branch network; it can be about good-quality jobs in other areas. No one will argue that cybersecurity is not an area that requires development and support.

Miss Brogan: Absolutely. Job losses and the reduction in the workforce is a massive element of this as well, which we have not touched on to the same extent. I agree with a lot of what you said, but the data that you have conflicts with other research, which seems to suggest that footfall on the high street has fallen, especially since COVID. You talked about the banking forum that Conor Murphy set up and that access to cash was one of the topics for discussion, against the trend of dropping footfall.

How do you change that trend? How do you encourage people to come back to banking services? You said that the data that you have suggests that people need that; maybe when it comes to applying for loans and mortgages, they want to have that face-to-face service. How do you change the trend that we are seeing, where footfall on the high street is dropping?

Mr O'Connell: There are a number of things. One is having an excellent service. The report that Brian referred to that was conducted in the Republic of Ireland showed that, when they arrive at a bank, 46% of people cannot get the service that they want, so one part of it is about giving customers good-quality service and having the appropriate people available to consumers when they attend.

Another part of it is the education and financial literacy piece. Lots of young people are on different money transfer apps and so forth. They find it hard to have a debate about the difference between a current account and an overdraft, for example. As life goes on, you need to know those things. You need to understand fixed interest rates and variable rates. Educating all of us in financials has a huge role.

As I said, when computers go down, the first port of call is to get branch staff to work late and to come in on a Saturday, which they are happy to do in the interests of consumers. That should not be used as a fallback position, however, but part of a blended model so that we can choose whichever channel we wish to use.

Miss Brogan: Finally, one of your asks of the Committee is that it endorse your call for no branch closures for five years. I assume that you have brought that to the banks. What response have you had from them?

Mr O'Connell: NatWest has made a commitment to the end of 2026. That does not go far enough, but we welcome it. We are due to meet the leadership of the other banks on that, because, as we said at our conference, it is a policy decision by our members. It is a reasonable ask. They cannot claim that they need to close branches as cost-curtailment measures when they make £2 billion-plus profits in a year.

The Chairperson (Mr O'Toole): Exactly.

Mr O'Connell: As I said, it is about the societal piece. I sit on the Irish Banking Culture Board, which was formed to improve the cultures of the banks. Part of culture improvement has to be consumer-centric decisions. Looking at branches or redundancies and saying, "It is a commercial decision; we have to take it", does not represent a good culture in terms of organisational decisions. It is about taking a rounded approach and saying, "Yes, there is a cost involved in providing services to the community, but we take our profits from the community and should therefore provide decent services to people".

Miss Brogan: I agree. Thank you for that.

The Chairperson (Mr O'Toole): If NatWest has agreed not to close any branches before the end of 2026, presumably it will not close the Ulster Bank branch in Downpatrick before then.

Mr O'Connell: That was not in the commitment. It was after the closures that —.

The Chairperson (Mr O'Toole): It had already announced that closure and then said, "We will not do any more for a little bit after that". What used to be RBS is now NatWest. If any of its public affairs people are watching today, maybe they will hear that there is a small natural justice question about closing branches.

Ms Forsythe: As the constituency MLA, I have an email on that that says that NatWest assessed that area following the full closure. That has been taken account of in its second report. I can forward the email.

The Chairperson (Mr O'Toole): That was most helpful. I suspect that we will correspond with you and maybe even take more evidence from you at some point in the next while. One final question from me is about this challenge, which is that we know that bank branch closures have a really negative impact on communities, particularly in small towns, not just on vulnerable people who rely on cash and are not digitally enabled but on microbusiness, entrepreneurship and the economic ecosystem. We also know that a lot of people, including many people living in small towns, are just not using banks. Even if the statistics are correct, there is a generation of people who are just not in that space. Is there a bigger bit of work to do — perhaps some of the Committee's work can do this — to communicate that the cultural shift is not simply about trying to recreate the 1970s and 1980s? That is not going to happen just now. Presumably, part of the reason why the financial education piece is part of your work is to communicate to people that you still need the branches and that there is still a public good that can be served by having them anchor the high streets.

Mr O'Connell: Yes. I represent people who work in the sector. The argument around retaining services in communities is unanswerable. It extends beyond banking, but we are here to represent workers in the banking sector, and people have a right to expect that organisations that generate the profits that they do will reinvest some of them in their communities. It is about providing a decent service that people are able to access for whatever reason that they wish to access it at a point in time.

Data tells us a lot about people's behaviours and desires. Nobody wants to see a shuttered building on their main street, and most of those branches are in fine, regal buildings and so forth. Nobody wants to see that. They want to have access to decent services in their communities. As I said, we consider that to be a very straightforward proposition, because you get all the upsides of having the number of services and the banks in the community, and the flip side of that is that you provide decent services for the community.

The Chairperson (Mr O'Toole): Most of the four big banks that we talked about have been bailed out by the Irish or British states in the past two decades. The value that is vested in them was possible only because the taxpayer bailed them out, basically.

That has been helpful. Thanks for that, everyone. I am sure that we will be in touch with you at some point.