APRA consults on bank branches data amid closures

The Australian Prudential Regulation Authority (APRA) is reviewing its data collection and publication in response to recommendation 7 of the Coalition’s Regional Banking Taskforce’s final report on the impact of bank branch closures in regional and remote Australia.

The Regional Banking Taskforce found dozens of towns had been left without a local branch in recent years as banks turned digital and put forward seven recommendations.

These recommendations included for APRA to review its points of presence collection to better capture indicators of how banking services are accessed, including through digital channels.

While the decision to close a branch is a commercial matter and not something APRA regulates, APRA publishes a detailed list of the number of bank branches and other physical banking points of presence on an annual basis.

APRA’s data showed that over the five years to June 2022, branches have declined by 30 per cent in major cities and 29 per cent in regional and remote areas.

APRA member Therese McCarthy Hockey said the data collection plays an important role in ensuring proper transparency around the availability of banking services across Australia.

Ms McCarthy Hockey said the prudential regulator was “conscious of the impact of bank branch closures on consumers and businesses”, particularly those in regional and remote communities.

The consultation is seeking public feedback on how the data collection and publication can be made more helpful to users, examining issues such as categories of data published and banking services covered.

“We want to hear from all interested parties, including consumer and community groups, on ways we can improve our data collection and ensure it remains useful and relevant,” Ms McCarthy Hockey said.

Senate inquiry on regional bank closures

APRA’s review will be undertaken concurrently with the Senate standing committee on rural and regional affairs and transport inquiry into bank closures in regional Australia.

The parliamentary inquiry is expected to expand on the regional banking taskforce’s recommendations and look at the economic and welfare impacts of branch closures in regional Australia as well as the process banks are following to close branches and the reasons being given.

The inquiry will report back to Parliament by 1 December 2023.

The Finance Sector Union (FSU) estimated more than 450 regional banks have closed in the past five years and welcomed the new inquiry calling for a “serious examination” of the regional branch closures.

As the inquiry is underway, the Commonwealth Bank said it would halt regional bank closures, while NAB and Westpac were proceeding with plans to axe regional branches as digital banking was changing consumer habits. 

[Related: Regional bank closures continue ahead of Senate inquiry]