Trust is at the heart of a bank's relationship with its customers. When you buy a service from the State's largest bank you expect that it will be scrupulously honest in its dealings.
You also expect that a bank which makes profits of over €2 million a day will invest the resources necessary to ensure that you get the best possible service. This week's revelation that AIB overcharged customers for certain foreign exchange transactions during an eight year period seriously damages this bond of trust. It comes two years after a €671 million fraud was uncovered at the bank's US operations and is set against the background of the DIRT inquiry.
The overcharging may well prove to be the result of a clerical error - as AIB claims - but that provides only a limited measure of reassurance to the bank's customers. The fact remains that AIB systematically overcharged customers and this error went undetected for six years.
A number of questions are raised. The most obvious is how a problem could go undetected for as long as it did. It stretches credulity that something as commercially significant as the margin charged on foreign exchange transactions was not scrutinised on a regular basis. Equally it seems extraordinary that no system existed - be it internal to the bank, through its audit or by regulatory examination - to reconcile the margin actually being charged with the rate that the bank had agreed with the Director of Consumer Affairs. It is also unclear why, when the discrepancy between the two rates first came to light two years ago, it was not brought to the attention of senior management.
AIB was meant to have upgraded the checks and balances within its systems after the Rusnak affair. Now, however, it is clear that a mistake went undetected for a considerable period. The original error, if the bank's version of events is fully upheld by the IFSRA investigation, was unfortunate. The failure of any of its systems to pick up what was happening sooner, however, must be a cause of serious concern.In this context it is legitimate to ask how many other errors in AIB systems , or perhaps those of other banking groups,remain undetected. Equally we must wonder if - should a similar problem manifest itself - we will ever be told.
The information that is currently to hand paints a picture of an organisation - or at least parts of an organisation trying to fix a problem on the quiet. It is far from certain the issue would ever have entered the public domain were it not for an anonymous tip-off to the financial regulator and RTÉ.
These are not questions that a customer should have to ask of their bank. The bank's answer - that the problem is technical in nature and an isolated incident - is not one that under the circumstances can be taken on trust. Independent verification will be needed. It is self-evident that everything possible must be done to restore money to customers. And those within the bank who are culpable must bear responsibility for what has happened.