A recent Indecon report on Community Banking in Ireland, published by my Department in December 2019, concluded that there is extensive provision of banking services by credit unions, An Post, as well as by commercial banking providers in the Irish market.
The report found that there are 1,912 branches operated by banks, credit unions and post offices in Ireland, 63% of these branches are post offices or credit unions and 37% are banks. The Indecon report also demonstrates that there is a higher number of branches per capita in many of the counties where a significant percentage of the population resides in rural areas.
In addition, An Post offers financial services including a payment account, personal loans, credit cards, a range of insurances, money transmission and foreign exchange services. An Post offers counter services for AIB and Ulster Bank, allowing customers to lodge and withdraw cash at An Post branches. An alternative method for cash withdrawal is cashback. Ireland is one of only 11 EU Member States in which cashback is common practice, and retailers do not charge consumers for availing of the service.
I am advised by the Central Bank that the Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 set out the services that credit unions may provide to their members. These include loans and savings under the 1997 Act and a further suite of services under the 2016 Regulations such as third party payments; ATM services; bureau de change and certain insurance services on an agency basis. I understand that a number of credit unions provide some of the services provided for under the 2016 Regulations. Where a credit union wishes to provide other services to its members, an application may be made to the Central Bank.
The Deputy will be aware that the banking sector is experiencing a challenging operating environment and the traditional banking model has been under pressure for some years to adapt and deal with legacy issues. Nevertheless, officials from my Department are in regular contact with the banks in which the State has a shareholding and all are investing across all channels to improve customer experience and continue to invest significantly in their IT systems and online services.
At this point, the question of introducing a Public Service Obligation to help ensure the retention or provision of basic financial services in rural towns and villages would have to be carefully considered as it may not represent good value for money.
