Banks told to ‘do more’ amid regional closures

A federal government taskforce set up to measure the impact of bank closures on regional towns has found dozens of towns have been left without a local branch in recent years as banks turn digital.

The Regional Banking Taskforce was established in October last year to examine the impact of bank branch closures on regional communities and to identify possible solutions to maintain and improve banking services.

Upon receiving over 400 submissions from the public on the topic, the taskforce - which included representatives from local government, Australia Post and the banks - conducted four roundtable meetings that resulted in seven recommendations.

The final report, which was handed down on 30 September, put forward seven recommendations to "provide a way forward to help improve banking services in regional Australia".

Overall, the taskforce found banks could do more to communicate with individual communities when closing a branch and recommended services through Australia Post need to be maintained going forward.

The recommendations are:

1. The Australian Banking Association (ABA) should review and strengthen its branch closure protocol and introduce a “customer-care standard” by mid-2023.
2. Banks should establish a process for conducting and publishing regional branch closure impact assessments by mid-2023, to provide clear reasons for closures.
3. Promote and support Bank@Post services; Australia Post and participating banks should collaborate and support customers’ transition to Bank@Post when branches close.
4. Access to cash; Australia Post should consider how the cash float and deposit needs of small businesses and community group customers can be met, and major banks should commit to providing ATM services in remote Indigenous communities.
5. Additional support is needed for regional customers experiencing vulnerability.
6. Improve digital connectivity; the Australian government to invest in telecommunication services through its Better Connectivity for Rural and Regional Australia Plan.
7. Review the APRA Points of Presence collection, which is due to commence in 2022 to better capture indicators on how banking services are accessed, with public consultation in early 2023.

ABA to invest in digital literacy

The Australian Banking Association said it would work constructively to implement its recommendations and understood “there are still customers who need face-to-face services and those who need extra support in transitioning to digital services”.

“Businesses across all sectors of the economy, as well as government services, are seeing significant changes in customer behaviour and substantial take up of digital services,” the ABA said.

“Australian banks are investing heavily in digital functionality and the security expected by their growing number of digital customers.

“In line with the Taskforce’s first recommendation, Banks will further strengthen their practices through an enhanced Branch Closure Protocol.”

The association said over 80 banks and financial institutions “can continue to do their in-person transaction banking at Australia Post”, with 3540 Australia Post outlets offering Bank@Post services already nationally.

‘Total failure’: FSU disappointed

The Finance Sector Union estimated around 64 per cent of bank branches in regional Australia have closed in almost five decades.

National secretary Julia Angrisano believes that the increase in closures is part of the banks’ push to online banking and is calling for a moratorium on regional bank closures.

“Bank branch closures have a devastating impact on small towns and regional centres. Older people who are not computer literate feel the impact most as they are forced to travel longer distances to do their banking over the counter,” Ms Angrisano said.

“Our members tell us that the numbers of ‘over the counter’ transactions each day are counted up and once a limit is reached, customers are taken to a computer inside the branch or to an ATM outside and shown how to do their banking online.

“We want laws to require the banks to provide a minimum level of service to customers and stop cannibalising their local branch network.”

Ms Angrisano said the taskforce had been a “total failure” as “not one recommendation” would stop further branch closures.

“The report says that better consultation once a decision has been made to close a bank branch is a fix to this crisis. This will do nothing at all to slow down and stop the rate of closures across regional Australia,” she said.

“The so-called Taskforce refused to hear from the FSU or our members. It held only a handful of meetings and achieved absolutely nothing.

“The report needs to be pulped and we need to start again. We need a proper inquiry, not just the banks talking to themselves.”

[Related: Broker focus underlies Bankwest branch closures]