Banks at risk of reputational damage in regional communities following spate of branch closures
If you are finding it increasingly harder to get cash out from a bank branch or ATM, you are not alone.
Almost a quarter of banks located in regional Australia have closed in the last four years, while the number of ATMs has fallen by around 20 per cent.
These are some of the early findings from a Federal Government inquiry examining the impact of branch closures on regional communities.
The Regional Banking Taskforce found 80 per cent of Australians prefer to transfer money, pay bills or check account balances online in an increasingly digital world.
However, 20 per cent still say they prefer to do their banking activities in physical branches.
That figure is much higher in country areas where more than 30 per cent visit a bank in person.
Western Australian Senator Dean Smith, who has taken a keen interest in the outcomes of the Taskforce, said he was not surprised to learn one in four bank branches had closed in regional Australia since 2017.
“There are two measures to test the liveability and vitality of regional towns,” he told the Guardian.
“One is the strength of the football team and the other is the existence of banking services in the community.
“Like the existence of a police station, the existence of a bank gives people security.”
Morawa is one Mid West town that will lose its only branch this year after Bankwest confirmed it was shutting up shop on February 24, citing staff shortages.
Morawa’s residents will now have to go to Carnamah, Dongara or Geraldton for face-to-face banking.
Last year NAB closed four branches in the Mid West and Wheatbelt, including the only bank in Three Springs.
The news came after ANZ, Commonwealth Bank and NAB announced branch closures in the South West.
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Senator Smith said the big banks were aware they risked damaging long-standing relationships with rural communities if the transition to digital banking was not managed well.
“For me it’s not just the closure of a physical branch, but also the presence of people in communities who can make decisions of behalf of the bank,” he said.
“Often that decision making process is taken further and further away from a regional community.”
He hopes the Taskforce can identify creative and flexible solutions to keeping more banks open in towns like Morawa.
“More common user arrangements,” he said.
“We see that to a limited degree with Australia Post. It is no longer your traditional post office, it offers a wide variety of services.”
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