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More than 93 per cent of National Australia Bank (NAB) customer interactions occurring digitally overall have influenced regional bank closure decisions, the major bank has highlighted.
Speaking to the Senate Rural and Regional Affairs and Transport References Committee hearing in Sale, Victoria, on 2 March 2023, NAB executive retail, Krissie Jones confirmed in her statement that “very few people are visiting a branch, regularly or at all.”
In confirming NAB shared and appreciated the committee seeking to ensure regional Australians “have access to appropriate levels of banking services across the nation”, Ms Jones emphasised the type and rate of industry change and how the major bank was adapting to this.
“We share [the] concern and acknowledge the responsibility we have to support all customers,” she said.
“Banking, like so many other industries, is undergoing a significant transformation driven by rapid technological advancement and changing customer behaviour.
“The way we shop, get our news, work and learn, is unrecognisable from 20 years ago,” Ms Jones underlined.
“More of our customers are choosing to manage their finances digitally, preferring the convenience and accessibility of telephone, online and mobile banking.”
According to the bank, currently, more than 93 per cent of NAB’s customer interactions occur digitally. In 2022, only 3 per cent of NAB’s personal banking customers solely used its branch network to conduct their banking, it confirmed.
“As an example, an average of 10 personal banking customers used our Roxby Downs branch every month. Meanwhile, the average NAB customer logs into our app or online banking 33 times each month,” Ms Jones highlighted.
The banking executive explained that while the majority of consumers have “driven and embraced the shift to digital”, the challenge for the bank is “to ensure customers in regional areas are properly supported.”
“We have invested in new premises in locations that more of our customers are visiting. Nationally, we have invested over $70 million in 51 regional towns in the last three years, with more than $30 million of further regional investment planned for this year,” she stated.
The reliance on Australia Post interaction
Having listed a slew of Australia-wide regional locations where “upgrades are taking place” or have been completed, Ms Jones highlighted the value of Australia Post store reliance and “community banker” roles in its branch closure strategy.
“Closing a branch is not done lightly and is made with consideration of the number of customers visiting the branch, the availability of alternative banking options and our ability to attract talented bankers to serve our customers,” Ms Jones stated.
“When a closure takes place, our local team works closely with customers up until the closure, to ensure they are aware of the banking options that will continue to be available.
“This can include continuing to bank in person at the local Australia Post as part of our 10-year partnership, using telephone or online banking, or having one of our business, agribusiness or mobile bankers visit at a time and location that suits them.
In terms of fees via this service, a spokesperson told Mortgage Business that personal customers do not incur any additional fees for using Bank@Post and that this is the same for regional and metro customers.
However, business customers may be charged a fee depending on their contract with NAB. They added that most business banking contracts allow for a certain amount of free ‘teller-assisted’ transactions per month, which includes Bank@Post.
Transactions beyond this limit will incur the same fee as if the transaction was made in a branch, they explained.
Ms Jones continued: “We also endeavour to provide a community banker when we close a branch in a regional area,” she stated.
As outlined by the bank, a “community banker” is a NAB representative based at the local post office “for a short time” following a closure to “assist with the transition to banking at Australia Post.”
Ms Jones additionally confirmed that when the major bank makes changes to its branch network, all “NAB colleagues” are offered alternate roles with the bank.
“We’ve had great success in securing new career paths for our team members,” she said.
“Many roles which were previously city-based have now been opened up to remote working arrangements, to develop the careers of our colleagues in regional Australia,” Ms Jones explained.
The big four bank said it had already implemented “the vast majority of recommendations” from the Regional Banking Taskforce that applied to it, and that it was “working with the industry and with the government to implement the remaining recommendations by their mid-2023 due dates.”
“As we did in that Taskforce, my NAB colleagues and I are pleased to participate in this inquiry,” Ms Jones assured.
A local council ‘lays it down’
In a statement to the senate committee on behalf of East Gippsland Shire Council and the East Gippsland community, it underlined similar regional entities’ concerns.
“We recognise that bank branch closures are ultimately commercial decisions for banks, but we contend that banks must consider the social impacts of those decisions on regional communities, particularly those smaller communities and towns that are long distances away from larger regional service hubs,” it read.
“Decisions based purely on bottom-line results over socially ‘doing the right thing’ flies in the face of being a good corporate citizen and given that taxpayers, our community, bankroll banks’ significant profits, the banks, in turn, have an unwritten duty to maintain essential banking services in those regional communities,” it concluded.
The impact of regional branch closures
NAB’s comments come two weeks after Commonwealth Bank Australia (CBA) said it would not close any of its regional branches following a request from the Senate committee.
Thus far, major banks Westpac and NAB have not given such assurances to the committee.
On 10 February, a parliamentary inquiry into the impact of regional bank closures on communities was passed through the federal Senate.
The inquiry will report back to Parliament by 1 December 2023, it confirmed.
[Related: Major banks to shutter another 37 branches]