RBS subsidiary Ulster Bank says it will close up to 40 branches and lay off hundreds of employees across the island of Ireland as customers move to digital channels.
Ulster Bank currently operates 214 branches across Northern Ireland and the Republic, down from 238 last year. By the end of 2014 it plans to have this number down to between 175 to 185, with the axe falling on rural locations.
A key reason for the decision to cut the network is the rise of online and mobile banking. Ulster says that digital channels accounted for 46% of all transactions in the first quarter of this year, compared to just branches, which were used for just 21%.
At an investor roundtable, the bank said that it would continue to push the move to self service, with most transactions performed via direct channels and next generation 'lite' branches and kiosks by 2016.
The closures are part of a move to make Ulster Bank a "significantly smaller organisation" and return the RBS unit to profitability by 2016.
Having already announced plans to cut 950 jobs, the bank is now looking to shrink its workforce further, aiming to reduce its 2012 headcount of 5800 to as low as 4000 by 2016.
However, a spokesperson says: "We believe that, taking account the 950 reductions announced in early 2012, the remaining decrease in headcount should be met through natural attrition over the remaining course of the strategic plan."
The reduction in staff and branch numbers will be offset by investment in IT systems, which bank officials admitted at the roundtable, are currently inflexible, with a "low level of automation and abundance of processes requiring manual work-arounds".
The bank - which famously suffered a huge and expensive IT blowout last year - claims that by 2016, investment made by parent RBS in the UK will mean far more straight-through processing and a modernised and more integrated IT infrastructure.