A Senate committee is set to investigate the consequences of bank branch closures across regional Australia, as communities rail against the decline of in-person financial services.
On Thursday, Liberal National Party Senator Gerard Rennick successfully called for the Rural and Regional Affairs and Transport References Committee to launch a fresh inquiry into bank closures outside of metropolitan centres.
The inquiry will chart the extent of bank branch closures, how their removal affects the economy and welfare of regional communities, and if those closures are constraining cash-dependent businesses.
The inquiry will consider solutions to any issues it finds, before delivering its report by December 1, 2023.
Taking to Facebook after the Senate agreed to the inquiry, Nationals Senator Matthew Canavan, who serves as Chair on the Committee, called on Australia’s major banks to hold off on any further closures during the inquiry “as an act of good faith”.
“Too many banks have been leaving small towns high and dry by shutting down branches,” Canavan said, claiming Australia’s banks have shut down or announced the closure of 92 individual branches since September last year.
“The first act of the Senate Committee is to call on the Banks asking them to defer any more closures until they can hear from the towns and businesses affected by their closures,” he added.
Submissions to the inquiry will close on March 31.
SmartCompany has contacted Senator Rennick for comment.
The major banks have shuttered hundreds of branches in recent years, with Australia’s financial institutions frequently citing a drop in foot traffic and the continual adoption of online banking services.
However, new inquiry coincides with new outrage from regional councils across the map, who say the removal of in-person services will harm communities and businesses ill-suited to online banking.
On Friday, the council of Cloncurry, situated 780km west of Townsville, Queensland, called the planned closure of its sole Westpac branch “disgraceful”.
“We are concerned for the many elderly residents, community groups and businesses, that rely on the branch for face-to-face assistance,” the council said in a statement.
“The role that personal face-to-face banking plays for our region cannot be underestimated — in times of drought, flood, fire and indeed all rural crises, it’s the local Bank Manager who becomes a lifeline, a face and a voice to be relied on.
“Someone who is always there. Not anymore.”
A selection of banking services accessible through the local Australia Post office is “unacceptable” for the region’s existing Westpac customers, the Council added, saying access to the nearest full-service branch will require a 90-minute drive.
Nine News reports the Junee Shire Council, in the NSW Riverland region, is petitioning to stop the closure of its Commonwealth Bank branch on March 3.
“The reality is, there are vulnerable and marginalised people in communities aren’t able to use or will never own a smartphone or connect to the internet,” an open letter from the Junee Shire Council states.
“Elderly members within our community are fearful of scammers and fraudulent activity over the phone or internet services for banking purposes.”
The bank said its decision was motivated by a 37% drop in transaction value in recent years.
Commonwealth Bank, which has recently cut operating costs through “workforce and branch optimisation” efforts, is now set to book a half-year profit of $5 billion.
Although regional councils say digital banking is unsuitable to some members of their communities, and that cash banking services are indispensable for many local firms, some onlookers think the Senate inquiry could also highlight digital alternatives to the big banks.
Ben Pfisterer, co-founder of business banking and payments provider Zeller, says the committee should consider how digital challengers can step into the gaps left by branch closures.
While Zeller does not presently offer cash banking services, it has released a debit card, accessible through Officeworks, which it says expands business banking solutions to communities not serviced by a physical bank branch.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
