Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): Due to unforeseen circumstances, the director of the Northern Ireland Rural Women's Network (NIWRN) is unable to join us today. There is a good reason for that, and she has sent her apologies.

The Committee Clerk: The director of the Rural Community Network is also unable to join us.

The Chairperson (Mr O'Toole): I welcome Samantha Gallagher, who is the Rural Community Network's policy and public affairs officer. Thank you very much for your time, Samantha. I invite you to make an opening statement and some opening remarks, after which we will move to questions from members.

Ms Samantha Gallagher (Rural Community Network): Thank you very much for having me here today. Our director sends her apologies; unfortunately, she has come down with a bug.

The Chairperson (Mr O'Toole): No problem at all; that happens.

Ms Gallagher: We have prepared a full briefing, and I know that you have had sight of that. I assume that you do not want me to read the entire briefing.

The Chairperson (Mr O'Toole): Pull out what you think are the most important points. That is always useful in framing our discussion. I usually tell people to say less rather than more. Unfortunately, I do not always abide by that myself. Let us know whether there are any key points that you want to make, and members will indicate whether they wish to ask questions.

Ms Gallagher: From our members' perspective, the barrier to financial inclusion tends to be excessive bureaucracy. They are struggling generally to open bank accounts, not just because they are having to travel to do so but because of the evidence that they are having to provide. Online banking solutions are not always accessible to our older volunteer members, who are more likely to struggle with digital literacy, which is also a massive issue in rural communities. The biggest issue for our rural population tends to be access to cash and to ATMs. Where there is access to ATMs, it tends to come with a financial penalty.

The Chairperson (Mr O'Toole): Two quid to get a tenner out.

Ms Gallagher: Yes. Those seem to be the biggest issues. In our briefing, we have identified a number of potential solutions, but they will definitely require some sort of joined-up thinking on the use of credit unions and community-led lending.

The Chairperson (Mr O'Toole): Thank you, Samantha. There is a lot in the paper, which is really useful. A specific focus of our inquiry is on how changing patterns in financial services, including the closure of branches and reduced access to cash, are having an impact on particular sectors, one of those being rural communities and, within that, the community groups and sporting organisations that service them.

Your paper is quite stark, Samantha; you call it a growing crisis. One of the findings that I found most interesting is not just the reduction in ATMs but the fact that opening a bank account is really difficult now, particularly because of some of the Know Your Customer rules. An organisation may have a credit union account, but certain grant-funding bodies will not necessarily pay money into such accounts because they want a traditional sort code, IBAN or whatever is part of their own security arrangements.

Ms Gallagher: Yes, that is correct.

The Chairperson (Mr O'Toole): Will you talk a little bit about the challenges of opening an account in the first place, whether it is for an individual or a community group?

Ms Gallagher: Yes. The Men's Shed in Newry is one of the best examples of the different struggles that we want to highlight. It struggled to find a credit union that would accommodate it full stop. A lot of credit unions will say, "No. We cannot accommodate community groups". After finding a credit union that was willing to open an account, there were multiple ID checks and face-to-face appointments. Men's Sheds are volunteer organisations, so everyone involved is giving up their own time, including those who had to travel to provide that evidence. The credit union account does not provide a chequebook, which is something that a lot of community-led organisations require.

The Chairperson (Mr O'Toole): It they do not have digital banking, they need the chequebook because it keeps them right.

Ms Gallagher: Correct. It keeps them right on their profit and loss. Also, those accounts have upper savings limits. For example, if an organisation gets a large pot of funding to sustain their community organisation over a period of time or for the duration of a particular project, it runs the risk of reaching that upper limit and the account being closed for that reason.

The Chairperson (Mr O'Toole): It is well known — we heard about it in evidence last week — that credit unions have a lending threshold for corporate account holders. People might not know it, but a small GAA club or small local charity is, effectively, a corporate account holder because it is a body corporate of some sort. Do credit unions apply a limit to the number of customers that they take on in the first place?

Ms Gallagher: Yes. That appears to be the case. We have spoken to a number of groups in Fermanagh that struggle with community lending, but the bigger issue tends to be opening of the account in the first place, and that tends to be the issue that our membership presents to us.

The Chairperson (Mr O'Toole): If you are doing small-scale charitable community activities, a lot of your money will be in cash. You might want to bank a few hundred pounds and open an account, but there is a challenge in doing that for someone who lives in rural Fermanagh, as they might have to drive to Enniskillen to get to the local Bank of Ireland.

Ms Gallagher: Correct. We have a group in Belleek, which Jemma will know, that travels 26 miles to Enniskillen to bank with the credit union. It, therefore, tends to hold on to cash for a little longer, which increases the risk of criminality and extortion because that is known.

The Chairperson (Mr O'Toole): They are probably losing out on a bit of interest as well.

Ms Gallagher: Yes.

The Chairperson (Mr O'Toole): The case studies in your briefing are interesting. They include a community group in the Ards peninsula that was refused a bank account outright and a community group in Camlough. Those are interesting for the Committee because we have not really talked much about community groups facing, effectively, exclusion from banking. Are there any particular challenges for individuals in rural communities who are unable to open a bank account? We have heard a lot about a lack of access to cash, which is a symptom of the broader challenge of a lack of access to financial services. What kind of challenges does that create for individuals or families who live in a rural area?

Ms Gallagher: The number of banks closing in rural areas has led to geographical difficulties in accessing a bank. Again, it is about the travel distance and the rural premium for accessing the service. We hear on the ground that farmers are struggling to access financial advice from their local branches. Historically, they would have been supported with loans to sustain their farms over the winter and been given specific financial advice and guidance, and they are now having to travel further afield to access those services. The difficulty with that is that the farmers are no longer known by their bank: they become just one of many people accessing a service.

The other issue is that, when we centralise services in cities, the complexity for those in rural areas becomes more stark and dangerous. Prior to taking up this role, I worked in Community Advice Fermanagh, which is an advice agency. We have seen the digitalisation of universal credit. If we couple that with the fact that everything has effectively gone online, it puts those with a lack of digital literacy and general literacy more at risk.

The Chairperson (Mr O'Toole): You mentioned that you had been Fermanagh based. One particular rural challenge in areas near the border, although not exclusively, occurs when people bank in one jurisdiction and live in another. What specific challenges have you heard about in that context?

Ms Gallagher: For workers, generally, there tend to be delays in salary payments. When a payment is released on one day, it should enter the person's account either immediately or the following day. That would be the usual way but, with cross-border payments of that nature, we have seen delays of up to a week and sometimes longer.

The Chairperson (Mr O'Toole): That is a change from 2019.

Ms Gallagher: Absolutely. It is a direct result of Brexit. There are also difficulties with accessing loans from banks in either jurisdiction. For example, I know a local hairdresser in the Fermanagh region who lives in the Republic and wants to build a house in the Republic. She is struggling to evidence her earnings in a different jurisdiction so that she can get assistance with a mortgage or bridging loan in the Republic.

The Chairperson (Mr O'Toole): Despite the fact that most of the well-known high street banks operate on both sides of the border.

Ms Gallagher: Yes.

The Chairperson (Mr O'Toole): They have had to more clearly delineate their business units, North and South.

Ms Gallagher: Yes, and from what I am being told on the ground, the issue appears to be bureaucracy and red tape. A lot of our people who live in border regions appreciate that there need to be checks and that those checks take time, but it is becoming increasingly difficult, particularly for the self-employed. The number of people in rural areas who are self-employed tends to be a lot higher than it is in other areas, and, because of that, the barrier is set higher by the banks to access that sort of credit.

The Chairperson (Mr O'Toole): A tradesperson living in, for example, Belleek or Strabane, who works a lot in Donegal or Cavan, because most of their work just happens to be south of the border, and wants to buy a house in Belleek, Strabane, Camlough — wherever it is — will find that the process is harder, slower and clunkier.

Ms Gallagher: Absolutely. We have heard about building contractors in Newry that operate in Dublin and would like to apply for a contract in Newry: they are also struggling to navigate the banking that is associated with operating on both sides of the border.

The Chairperson (Mr O'Toole): OK. That is helpful.

Ms Forsythe: Thank you, Samantha, for being here today. In the inquiry, we recognise that responsibility for banking is not devolved to Northern Ireland; it is governed centrally by the United Kingdom. We are trying to identify what that means for people and what we could do better to identify the specific issues in Northern Ireland. What are the main things that you want to feed back?

Ms Gallagher: Do you mean the main things to feed back to Westminster?

Ms Forsythe: To us, as we form our view.

Ms Gallagher: No problem. Community-led lending has, historically, worked very well for community organisations. That is definitely something that could be explored and dealt with in a devolved manner. However, we appreciate that engaging with banks, for example, to get clarity on whether groups can open accounts and to highlight the difficulties that they are experiencing in doing so, is slightly more difficult. Rural Community Network Northern Ireland —.

Ms Forsythe: Do you think that your group and other representative groups from Northern Ireland have enough of a voice at the table?

Ms Gallagher: We probably do not when it comes to rural issues, generally. That goes right back to the Rural Needs Act (Northern Ireland) 2016, which does not give us enough teeth to ensure that the rural voice is heard or that the rural limitations of a policy are properly mitigated. It is very easy to say that there is limited access to ATMs in rural communities, but what do we do about it? We need to get back to the bread-and-butter and serious issues of rural poverty and the rural premium. If we do not have free access to ATMs and our communities are not empowered to build themselves up, we will have a serious problem. Our director clearly indicated that in her briefing when she called it "a financial crisis".

We work very closely with our counterparts in England, Wales and Scotland, and, potentially, there is a remit there to increase our voice on a UK-wide basis. That is something on which we would be willing to collaborate with you to ensure that the rural voice is very much represented in the UK context.

Ms Forsythe: I represent South Down, which is a very rural constituency. We have picked up feedback on different things such as the use of banking hubs by businesses, not just individuals looking for cash from ATMs. It is good to build that data and that evidence base on how businesses in Northern Ireland make use of the different banking facilities, and you mentioned some examples of that. It is really useful to have you here. I thank you for coming and for the briefing as well, which will add great value to our inquiry and output.

Dr Aiken: I declare an interest as an MLA and somebody who is dealing with a lot of constituents who are having difficulties with mobile banking.

The Chairperson (Mr O'Toole): We are all MLAs. I do not think that you need to declare that as an interest. [Laughter.]

Dr Aiken: I am an MLA for South Antrim, and it is a constituency issue. I am dealing with people who cannot do any mobile banking, particularly when Fibrus is not providing any fibre and Vodafone is not providing any signal. It has been made very clear that there is a difficulty with mobile banking. It is not just a question of older people not being able to navigate their way through it; there is a problem with the provision of the service. Are you getting indications that there are black spots in the provision of any opportunities for banking? You do not have to go very far into rural areas to find those black spots: if you drive from Ballyclare in the general direction of Belfast, you will find them.

Ms Gallagher: Absolutely. The black spots are not just in rural communities. In fact, our director lives in Magherafelt, and she requires two different broadband providers for her house. In the middle of her house, there is, therefore, a black spot because her broadband service in one half of the property does not extend to the other half and vice versa. She will tell you that her house is not Buckingham Palace; it is very much a normal property that is quite central in Magherafelt, yet it has that black spot problem.

Further out, in rural areas, there are connectivity issues in respect of 3G and 4G. A lot of rural communities do not even know what 5G is, as it has not reached us yet. Living along the border, the cost implications of connectivity are extremely difficult. There are areas of Fermanagh, Strabane and Newry in which a satellite dish is required to connect to the internet and, as a result, to access online banking.

Dr Aiken: It has been reported to me that it is becoming increasingly onerous to provide proof of identity. You cannot go to a bank branch unless it is in Belfast, you have to upload data online and various forms of proof of identify are not accepted. I notice that you were careful in your language; I would not be. You can never get a real person on the end of the phone, so you cannot get any of that information through to the banks. Are people in rural areas finding the identification process increasingly difficult as banks tend to increase the information that they require?

Ms Gallagher: Absolutely, and it goes for individuals and groups. They are being requested to provide maybe three to five different forms of identification, and they are trying to do that online.

Dr Aiken: When their internet connection does not work.

Ms Gallagher: Yes. There are definitely reports of that being an issue and a time constraint, particularly for volunteer-led organisations.

The other thing to bear in mind is that a lot of our rural organisations tend to have volunteers who are over the age of 60 or 65. Those people are struggling with the digital side of things and when they want to access someone face to face, they are being requested to drive to the central branch in Northern Ireland, which tends to be in Belfast.

That is a massive journey for anybody from a rural community to make to provide ID. We have had multiple groups tell us that they have driven to Belfast with ID, the ID has been refused and they have had to come back on another occasion.

We hear stories from individuals who live in rural areas and struggle to get through on the telephone. When they ring banks, they are met with AI and questions such as, "Can you tell us what your query is about?". They tell the automated machine what their query is about and they then might be put in a queue, where they are twentieth in line. One of our staff members sat for two and a half hours on a call to a bank just to cancel an accidental double payment. That man works full-time: he does not have time to sit for two and a half hours just to cancel a duplicate payment.

I hear from people who worked in banks in rural areas, who have branched out into other fields, or from those who now work from home for a bank that centralised its services. They say that the reduction in the number of people employed in the banks has become a serious issue.

Dr Aiken: It has been put to me that some places in the world have something called a "digital notarisation process". You go to the equivalent of a notary but on a digital platform, which certifies your identity and everyone accepts that. You do that once, and it provides your digital identity, which is then accepted by everybody. Every member of the banking industry here to whom I have spoken refuses to do that, because they all say that they would have to do it individually. Would it be useful to have a one-stop shop, so that someone would be able to say "This is my digital identity", and that would be it?

Ms Gallagher: It could be. A lot of our funders are moving towards that way of thinking about a one-stop shop, whereby information on your group's identity and legal constitution is all on one portal, which makes it easier to access. It is beyond my remit to say yes or no to that, but it would certainly make things easier for rural groups as long as it is protected and authorised by the Financial Conduct Authority.

Dr Aiken: OK. Thanks very much.

Mr Carroll: Thanks, Samantha, for your presentation and your paper. It is concerning to hear some of the issues about credit unions, but it is useful to hear them. We had a briefing from the credit unions last week, as the Chair said. They are more flexible and tend to be better, generally, than the banks, but if there are issues there, they need to be explored. Have you shared any of your concerns with the Irish League of Credit Unions or the credit unions directly?

Ms Gallagher: Not as yet, Gerry. We are working with a number of member organisations with a view to doing so down the line. At the minute, we are simply collating information from our groups on the issues that they are having so that we are fully informed when we go to do that.

Mr Carroll: OK. I would be happy for the Committee to share those concerns, but I appreciate that you have your own process. However, if you would like the Committee to pass those concerns on, I am sure that the Chair and others would be in favour of that.

I presume that you do a lot of work on supporting victims and survivors of domestic violence and abuse and on the rising issue of femicide. A lot of people who want to break from their partners when they are abusive or violent cannot because of financial constraints and because they are reliant, for all sorts of reasons, on them. Is there anything that banks can do to support women who are fleeing from those situations through, for example, access to joint accounts? Is there anything that you have looked at or suggested in that area? Through your work and advocacy, do you think that there is anything that banks can do to make a dreadful situation, the root causes of which need to be tackled by the Executive, a bit easier for survivors and victims?

Ms Gallagher: We have worked quite closely over the past couple of months with two of the most rural Women's Aid groups on their role in the ending violence against women and girls strategy. They continue to bring up the issue of access to a joint account and being able to smoothly remove yourself from one. The problem is that, when a person flees such a scenario and goes to remove money from a joint account, that is automatically visible to their perpetrator. There needs to be communication from the bank about protections that allow that type of scenario to occur in a smoother way. Women's Aid and NIRWN would be better placed to make suggestions on that front. From a rural perspective, we are more than happy to feed into that.

Mr Carroll: I appreciate that. If you are not aware of the answer to this question, that is fine, but I presume that removing a name from a joint account is a simple process. Is it a bit more complicated than that, and does it put people at risk?

Ms Gallagher: Yes. We are advised that there are occasions on which permission from both parties is requested. That triggers the perpetrator's awareness of the situation, which can be extremely dangerous. We are trying to avoid that type of scenario.

Mr Carroll: I appreciate that. Chair, the Committee should maybe look at that issue a bit more. Thank you, Samantha.

Ms Dolan: Samantha, it is great to see you again. In addition to Dr Aiken's declaration of interest, I have to make a declaration, because my office is inundated with queries about ID for bank accounts and all those sorts of things. Something that has made the situation even more complicated in recent weeks — I do not know whether you, Samantha, or other MLAs are aware of it — is the Electoral Office's moving of ID applications online. That adds to the digital literacy issues for people whom we deal with in the office, because banks send them to our offices, saying, "Go there, and get sorted with an electoral ID". It is now even more complicated to do that, which adds to the issues for those in rural areas.

As a representative of a rural border constituency, I am aware of the challenges that people face, particularly cross-border workers who try to set up a bank account in the jurisdiction in which they are not resident. You mentioned the increasing difficulty in doing that since Brexit. Have you had any engagement with your counterparts in the South on that? Who are your counterparts in the South?

Ms Gallagher: No, we have not. However, we sit on a committee that explores the consequences of Brexit. Its membership includes the Centre for Cross Border Studies. There is scope to explore that issue there. I feel as though we are in the very early stages, in that everything that we are hearing is anecdotal. We need to collate that and ensure that we have the strongest possible evidence before we go any further with it. We welcome any opportunity to explore that further with our counterparts in the Republic.

Ms Dolan: I am new to the Finance Committee and this inquiry, but another thing that banks are not doing, or only a limited number of banks are doing, that affects border constituencies is that they do not offer self-build mortgages based on salaries that are paid in euros. That affects people who live in Belleek but work in Bundoran or Ballyshannon or vice versa. It is very interesting. In rural areas, it costs us to access cash. We mentioned the ATMs. You have to travel from Belleek to Enniskillen to get to a bank, so it definitely costs us more to access cash.

Ms Gallagher: I provided the example of the hairdresser earlier. Both she and her partner are self-employed — he is a builder — and they are struggling to build a property in the Republic because they work in Northern Ireland and their children attend school in Northern Ireland. For them, it is not about politics. It is not about anything other than place, which, for them, means that they do their shopping in Monaghan town, with their main social centre also tending to be in the Republic. That is not the result of any sort of political ideology; it is just their local area. The border is completely fluid for them. The lady was pulled in by an Garda Síochána in the Republic for having a label for a Northern Ireland business on her vehicle. The gardaí conducted an investigation as to whether that was permitted. She was not doing anything wrong, and everything turned out fine, but she was pulled in and questioned about it.

The Chairperson (Mr O'Toole): A business label? What, like —?

Ms Gallagher: Her hairdressing brand is on her Northern Irish vehicle. She has reported in both jurisdictions, as she should, that that is a business vehicle. There are lots of complexities, unfortunately, to living in border areas when it comes to navigating businesses: access to lending, cash and business accounts is very difficult.

The Chairperson (Mr O'Toole): Ulster Bank has closed its branch network in the South and divested from there, basically, but a couple of other banks are cross-border operations. My impression is that there are certain banks that are more likely to have branches open in villages and towns south of the border than a few miles up the road on the northern side of the border. Do you have anecdotal evidence — if you have data, brilliant — on that? Is that your impression? Is that your members' impression?

Ms Gallagher: Yes, that is the impression of our members. People from Lisnaskea, for example, tell us that they used to be able to access their Bank of Ireland accounts easily in their town. Whilst the bank operates a branch a few miles down the road in the Republic, they now have to drive to Enniskillen where everything is completely centralised. Even when they go in to provide their ID or change their mandate, everything is sent to a centralised unit, and it seems to take longer. Geographically, it would be quicker for those people to access their bank in the Republic than drive to Enniskillen. It is definitely an issue.

The Chairperson (Mr O'Toole): Sometimes they cannot do that, or it is harder because cross-border banking is more complex.

Ms Gallagher: Correct. In the town that we have been discussing, people have made an official plea for a banking hub.

The Chairperson (Mr O'Toole): Good.

Ms Gallagher: That is supported by local business owners.

The Chairperson (Mr O'Toole): Can you say which town that is?

Ms Gallagher: Lisnaskea.

The Chairperson (Mr O'Toole): We have heard about that, I think.

OK. That is great. Thank you very much, Samantha. That was useful evidence, and we appreciate your time. If you have anything to add on any of those issues, we would really welcome your sending that through.

Ms Gallagher: Thank you very much for having me. As I said, we are keen to work in collaboration on this project, so please keep in touch.

The Chairperson (Mr O'Toole): If anything else occurs to you, we will be keen to hear it. Thank you so much. We appreciate your time, and thanks for giving evidence alone —

Ms Gallagher: Thanks for going easy on me —

The Chairperson (Mr O'Toole): — and doing all the hard work.

Ms Gallagher: — the first time.

The Chairperson (Mr O'Toole): You did really well: much better than some others who give evidence to us.