Mr. Michael Lauhoff:

I thank the committee for the opportunity to present to it this afternoon.

Bank of Ireland has the largest banking branch network in Ireland. In addition to this, it has a team of mobile business relationship managers who look after the more complex financial needs of business customers, largely around their lending needs and who visit customers at their places of business. In addition to that, our branches are supported by two direct lending units, based in Kilkenny and in Dublin.

That facilitates customers in applying either over the phone or online at a time and a place that suits them, rather than having to make appointments to come into the branch.

Bank of Ireland is the largest lender to the Irish economy, but in addition to lending, which is obviously an important part of funding businesses, it is important to make sure a range of funding supports is available. Bank of Ireland is one of the largest investors in seed and early stage equity funds in Ireland.

In terms of changing how we approach our SME sector, we are responding to the changing needs of our customers. Over the past few years, we have invested significantly in our external lodgement ATM network throughout the country. That allows customers and businesses to lodge at a time and place that suits them, rather than having to come into the branch during their busy work day when they are meeting their own customers. For customers with larger lodgements and larger cash requirements, we continue to provide an over the counter cash service in the majority of our branches.

Customer behaviours are changing. At this point, less than 3% of transactions are actually conducted over the counter in branches. While much of that is consumer-led, from a business perspective, the percentage of transactions that are staff-assisted has reduced from 46% in 2014 to 28% now. That continues to reduce on an ongoing basis.

Contactless payments are a key development attributed to new technology. The use of contactless payments has increased exponentially. For Bank of Ireland last year, it increased by 89% year on year. That has facilitated the removal of much of the cash and coin requirements from the market, especially for low value purchases and retail operations.

In addition to the day to day branch services and physical lodgements, we are also investing in our online services. Customers are dealing with their day to day transaction requirements very differently. Our 365 online platform, which was originally developed for our consumer customers, has been made available to all business customers over the last few years. For the vast majority of business customers, the payment functionality on 365 online facilitates all of their payment requirements. For business customers with more complex payment transaction requirements, we have business online. We reduced the cost of that service in 2016 to a flat fee of €10 per month. We continue to invest in different ways in terms of facilitating customers in their day to day transaction requirements.

Bank of Ireland recognises that SMEs are the lifeblood of the economy and that the future of the economy is dependent on a successful SME sector. In order to make sure we are providing the appropriate support to those businesses, over the past number of years we have recruited a team of sector experts from across industries. These are people we have recruited from the sectors they work in and they are people who live and breathe their respective sectors. They understand the performance of the sector from the operator's point of view as opposed to from a financial perspective. That has given us a real insight in terms of what their business requirements are at the various stages of their development and how we can support them. In addition to one to one meetings with customers, the sectors team also organises a series of seminars and workshops throughout the country, bringing other key stakeholders from the industry together and supporting them in terms of new opportunities developing in their sectors, helping them to advance their own businesses.

In the fourth quarter of 2017, we hosted 26 Brexit-related events throughout the country which over 1,500 SMEs attended. This was focused on advising SMEs in terms of the supports that are available for businesses which have to make contingency plans for whatever scenario Brexit presents.

Another key part of our overall strategy, and where we see the branch network as being very important to us, is our overall activity in the community. Our enterprise programme and enterprise town activities have been very important in that respect. I know that a number of members have been to some of those events, which are very much focused on bringing local communities together, allowing local businesses to demonstrate what they have available for their own community, and increasing commercial activity in those locations. This will continue to be a core part of our strategy going forward.

We have also invested in a number of digital supports. As an example, we have entered into an exclusive partnership with WebPort Global, a business which is focused on developing contacts for businesses which are seeking to expand into new countries. Through its association with the World Trade Centre, it can provide Irish SMEs with the appropriate people to talk to in a new market. At this point in time, that partnership has delivered over 1,500 new business opportunities across 78 countries looking to expand their markets, especially with Brexit on the way.

In addition to two incubation units in Dublin and Galway, we partner with a number of other startup initiatives throughout the country where we provide a Bank of Ireland community manager who works with those other units in developing plans and campaigns of activity for startups and supports. We have dedicated spaces or work benches in a number of our branches. This space is free of charge and businesses can base themselves there and network. We run seminars, clinics and events to encourage innovation and new ideas among the start-up community in those locations.

Mr. O'Regan referred to access to finance. In addition to a number of initiatives that we run ourselves to increase our own customer base, we actively support Government-backed schemes to increase the flow of funding to the SME market. In terms of the Strategic Banking Corporation of Ireland, SBCI, we have fully allocated our lending in the original on-lending scheme and last year's agricashflow scheme and we are working constructively with SBCI to ensure that the roll-out of the Brexit working capital loan is deployed as effectively as possible. Microfinance Ireland, which Mr. O'Regan also mentioned, is an important supporter of microbusinesses in Ireland. We refer business to it weekly where they are not suitable for bank debt at this point in time.

The credit guarantee scheme has been an important initiative in supporting businesses which perhaps did not have sufficient collateral or security to get bank funding. We have actively supported this scheme and see it as an important support for the SME community. We have worked closely with the SBCI in developing the new phase of the scheme, which is now ready for launch.