NAB, ANZ, Commonwealth Bank, Westpac: Disturbing number of Aussie bank branches that have closed in past six years – as sad stories emerge about workers struggling with cashless society
Big banks are 'bullies' who are failing rural communities and exposing vulnerable customers to the risk of financial fraud, a Senate inquiry has found.
Nearly 800 bank branches in regional and rural Australia have closed since June 2017, according to data from the Australian Prudential Regulation Authority (APRA).
A long-term study is examining the effect of closures on rural towns and considering possible mandates to keep a minimum number of country branches open.
When a bank closes, customers are usually directed via Bank@Post to a local post office for limited cash services.
Since June 2017, nearly 800 rural bank branches have closed across the country, putting communities at risk of financial scams
Australia Post says it is interested in expanding its financial services in regions where there is a need
Australia Post told the inquiry there are about 1150 rural communities with post offices but no banks.
The LPO group, which represents post office licensees, is pushing for the creation of a government-backed postal bank that will leverage Australia Post's extensive regional network.
Co-chairman Scott Etherington said three of the four major banks paid Australia Post for transactions, but post offices were required to handle customer banking queries free of charge.
'How long must our members continue to subsidize the banks?' Mr Etherington told the inquiry in Canberra on Friday.
'These bankers are not smart businessmen. They're bullies.'
Older customers in rural areas relied on face-to-face banking at post offices, often for fear of getting caught in a scam or losing money, Etherington said.
“They can't afford to lose $5, $10 or $1,000, heaven forbid, because they press the wrong button on their phone or the wrong thing on their web browser.”
Banks point to the rapid rise of digital banking and the decline of cash transactions to justify widespread closures.
Australia Post CEO Paul Graham said while Bank@Post was also likely to decline as customers moved online, cash was important to regional communities and would not disappear anytime soon.
About 1,150 rural communities currently arrange their financial services through post offices because they do not have access to banks
The National Postal Service paid $90,000 last year to send cash to remote towns such as Coober Pedy in South Australia and Kalgoorlie in Western Australia, where the last banks have closed.
“The closures they have made are because they see no future in having branches; that is their opinion,” Mr Graham said.
'We obviously see a future in it.'
There was a record $100 billion of cash in circulation after the height of the COVID-19 pandemic, said Merylin Coombs, deputy head of the Reserve Bank's banknote issuance department.
“People want cash in times of uncertainty as a hedge against uncertainty,” Ms Coombs said.
APRA data presented for the study shows that the number of banks in regional and rural areas has fallen by 34 percent over the past six years, compared to 39 percent in cities.
The number of ATMs offered by banks fell by 50 percent nationwide and by 62 percent in metropolitan areas.
The committee will release its final report in May next year.
Australia Post chief Paul Graham (pictured) says he sees a future for bank branches in regional areas