Bank of Ireland has informed 130 staff in its cheque clearing division that it intends to outsource their roles to an external provider called BancTec.

The bank has signed a seven-year contract with Texas-headquartered BancTec and plans to transfer over this activity in the second quarter of this year.

Bank of Ireland said the decision was taken following a strategic review and reflects the ongoing reducing volumes of activity as cheque usage declines as customers migrate to electronic payments. It declined to quantify the cost saving to the company.

It is understood that Bank of Ireland’s cheque clearing volumes on the island of Ireland have roughly halved in the past five years to 240,000 paper items per day.

Staff will be given four options in relation to the outsourcing plan. “They may transition to BancTec as part of the contract, seek redeployment opportunities within the bank, or take voluntary redundancy. The bank will also retain a number of employees in the area,” Bank of Ireland said in a statement.

One-to-one meetings with staff are slated to begin next week while officials from the Irish Bank Officials Association intend to meet with Bank of Ireland and BancTec on February 2nd to discuss the outsourcing plans.

Bank of Ireland said it was “committed to working closely with those impacted by the announcement and supporting them through the transition process”.

BancTec has been a partner to Bank of Ireland for a number of years in the provision of hardware and support services to facilitate cheque clearing.

It recently expanded its business here to include clearing operations fulfilment at its site in Park West, Clondalkin and provides similar outsourcing services to AIB.

This is the latest move by Bank of Ireland to improve efficiencies and reduce its employee cost base. Some 4,600 people have left the group since 2008, which is about 30 per cent of its workforce.

IBOA general secretary Larry Broderick said the bank's decision to outsource the cheque clearing function was "disappointing" given previous commitments to staff and the fact that the bank was back in profit.

“If this decision is in the strategic best interest of the bank it is important that staffs’ jobs, pay, pension, and terms and conditions are protected,” he said.

Mr Broderick said there could be “no transfer of work until an agreement is in place” with his members.