Pat Casey (Fianna Fail) | Oireachtas source

Before I begin, I apologise that I must leave immediately after speaking as I have a committee meeting to attend at 2 p.m. I also wish the very best of luck to all the businesses that are reopening their doors today as part of a gradual process. It has been a challenging time. We are looking forward to opening ourselves on 2 June as our hotel reopens its doors. This would not have been possible without the Government supports that we have been given over the past very difficult period for businesses. The viability of all businesses is being challenged during the pandemic but the challenge will go beyond Covid as many of these businesses will struggle to survive as the supports are withdrawn.While we talk about the viability of businesses, the banking industry is a business and it too must be viable. While we might like to look down on the banking sector and run it down at times, without a banking sector we do not have a society. Therefore, we need a working, viable banking sector now and into the future.

The sector has been challenged by Covid and influenced by other factors. In recent months there has been some very disappointing and devastating news for the banking sector. The retail financial sector is going through a major period of change. Over recent months we have seen major announcements that included the withdrawal of Ulster Bank, the potential withdrawal of KBC Bank Ireland, and further closures of a large number of branches of the Bank of Ireland and a smaller number of AIB branches. These developments lead to the core question of the viability of the banking sector into the future. While the decision made by the Bank of Ireland was a commercial one and I know the rhetoric will be that we are stakeholders of that bank, we have no control over its day-to-day operations. We must examine, however, how the financial sector can evolve from this and become viable into the future.

The sector faces long-running challenges such as negative interest rates, technological changes that are reducing the barriers to entry for a whole range of new entrants, and changing customer preferences as they move more to the digital services while still wanting a traditional branch network to be available. Competing with online firms while coping with high-cost structures poses considerable challenges to the traditional full service sector we have all been used to. If anything, Covid has advanced a cashless society by a decade. We would not have foreseen that we would tap our phones on a machine simply to buy a bottle of water and a packet of crisps in a local shop, but that is the way society is going and we must take all these factors into account.

From my own point of view and that of business, I have seen a local bank and post office close so I know the practical implications for businesses, such as what we do with our cash. All of a sudden cash had to be transported 30 km instead of 10 km, which led to us entering into an agreement with a security firm to collect the cash. These are all things that are changing but that cash element within business is being diluted year on year and is becoming less of a factor.

We all still love to see a bank on main street. One of the greatest losses in the financial sector is the personal touch. Whether you were an individual or a business, you had a connection with the bank manager. Not everything is always black and white. There are some things a bank manager understands about certain locations, businesses and personalities that can make for a more balanced decision on the ability to service a loan.

While I can offer the Minister solutions for the hotel industry, I probably cannot offer him solutions today for the financial services. The post office and the credit union networks give us options. The entrance by credit unions into the commercial and SME markets must be welcomed as part of the Covid response because, as a user of the banks, I know we need competition in the sector and, regrettably, that competition is lacking at the moment. Between the post offices and credit unions, and what is left of the banking sector within towns, we must evolve a model that can keep a presence on our main street. It is vital, even though we are moving away from personal contact, that we keep a presence on main street.

I thank the Minister for spending time here today and for the supports that he has provided for businesses.During that time, accessing credit from financial institutions has been extremely difficult for those in the SME sector. The sector has not been treated well by the banks. We need to look into this area to see how it can be made easier to access credit and how the process can be made less onerous and strenuous for businesses and individuals.

I apologise that I have to leave for another meeting but I thank the Minister for his time today. The way he is facing challenges in trying to provide us all with a viable banking sector will be critical for Ireland both from a personal point of view and a commercial one. It is vital that both sectors can work and function into the future.