Simply walking away’: Banks face branch closure crackdown as Senate probe exposes failures

New Daily
May 27, 2024


Major banks have been slammed for closing hundreds of regional branches.



The federal government is being urged to pursue a crackdown on big banks closing branches in regional areas after a Senate probe called for cash to be considered an essential service.

A highly anticipated report into the hundreds of branches major banks have closed across the nation was dropped quietly by the Senate committee on regional affairs last Friday.


It recommended a series of reforms to protect communities from branch closures, amid expert fears that many Australians are being “left behind” by the rise of digital banking.

Namely, the committee said access to cash should be considered an essential service, that the government should consider a new publicly owned bank, and that new roadblocks be created to prevent the big four from closing regional branches without approval.

‘Strong stance’
RMIT Associate Professor Angel Zhong, who had followed the inquiry closely, said the committee had taken a “strong stance” to protect access to physical cash and banking.

Zhong said calls for a mandatory code that would require banks to consult with local communities and government before closing a branch should be adopted by government.

“It strikes a better balance between protecting the interest of both taxpayers and regional Australians,” Zhong said.

‘Ongoing need for cash’

The Senate probe was set up over concerns that swathes of physical bank closures in recent years were leaving regional communities in particular without convenient access to cash.   :(


More than 800 branches have been closed in regional areas over the five years to June 2023, according to figures from regulator APRA.


Meanwhile, research has shown that a sizeable minority of Australians still rely on physical banking and would be left without adequate services without branches, with banks shuttering locations in a bid to cut costs.

One bank, Macquarie, even moved to stop offering cash to customers entirely this year.   :(

The Senate committee agreed there was an “ongoing need for cash” and that characterising physical currency as an essential service could prevent banks from ditching it entirely.

“Along with an increased need for cash, regional and remote communities are more dependent on face-to-face services,” it said.

“Vulnerable residents and small businesses may be left ‘high and dry’, or forced to drive hundreds of kilometres to the nearest bank to complete essential and basic financial tasks.

“Australia’s banks are failing to take these impacts seriously. In many cases, banks are simply walking away from communities,” the committee also said.


.

Council of the Ageing chief executive Patricia Sparrow urged the government to “immediately action” the essential services call and another that called for an expansion of Australia Post’s Bank@Post service to ensure all major banks were participating.

“This is an important step towards recognising that every Australian needs and deserves access to banking services,” Sparrow said.

Public bank

One interesting recommendation in the report was a call for the government to review setting up a publicly owned bank that could service regional communities indefinitely.

It wouldn’t be the first time the government had owned a bank; the Commonwealth Bank was originally taxpayer owned but was privatised in 1991 under Prime Minister Paul Keating.

Zhong said public banks have been successful in other countries at promoting specific goals like financial inclusion and economic development, such as Kiwibank in New Zealand and KfW in Germany.

“[A] publicly owned bank in Australia could be viable if funding from the government can be sustainable,” Zhong said.

“However, research shows that government-owned enterprises tend to be associated with lower operational efficiency.”

Yes we want our bank branches, we want them to stay.  Yes we want to be able to get cash as well.   :(

whiteknight wrote on May 29^th, 2024 at 12:50pm:

Yes we want our bank branches, we want them to stay.  Yes we want to be able to get cash as well.   :(

No we don't. If we did, the banks would keep them open. What we actually want is cheap banking services.

It puts pressure on local Post Office to fill the branches role.

Basically the banks force the government to do the work.

The removal of ATMs is another huge issue.

The government says and does nothing because it's all part of the grand plan to a cashless society.

In the meantime government being able to view anyone spending is a step down that path

We don't want a cashless society.   :(

in 20-30 yrs time, when cash is no longer an option, and banks charge you $20 per transaction, it'll be to late to cry about it.

It's not about what " we want" it's about what our leaders believe we should have.

Of course the banks will gorge a bigger profit but I tend to think it goes much further.

The government wants to see where and how you earn money and perhaps more so, with whom you spend it and on what.

The fact we a squeeze is of no concern to the banks or politicians.

The area I used to live in had a very high elderly population.

The main shopping centre had an ANZ, Suncorp, St George, CommBank, NAB and Westpac branches.

They now only have Westpac and CommBank.

The Post office is mostly full of older residents paying bills so if I ever need anything that's actually related to the postal service, it's better to avoid that location.

I personally don't use cash.  I carry probably about $150 around just in case, but I haven't used it in years. 

The last time was to tip a family friend's daughter who is 9 years old $50 as she was helping out in their restaurant for fun as we'd stayed after closing to spend time with them.

I much prefer the convenience of tapping my smart device and always using credit.

I don't even like using Debit cards, it's safer to use Credit than debit or cash.

As someone who used to run a small business, I preferred people paying electronically and we had factored those costs into everything so we didn't add any percentages when using cards etc.

But we would always accept cash.

I know how important cash is to some people, and the ability to pay with it and withdraw it and I hate seeing the branches close down.

I needed cash recently to pay for multiple repairs after the Christmas storms.  I can't believe it's June and we're still going with trying to get everything sorted, but anyway, going into one of the branches, they ran out of 100s and couldn't fulfil the $5000 withdrawal without using 50s and 20s.

It's scary how little cash they actually keep on hand.

If the banking industry was running on fumes and barely profitable I could understand the cost cutting, but in the shadow of their recent record profits and investigations into their shady practices, it's just another example of we the people being commoditised and exploited in the name of profit and endless growth.

SadKangaroo wrote on Jun 2^nd, 2024 at 9:04am:

It's scary how little cash they actually keep on hand. If the banking industry was running on fumes and barely profitable I could understand the cost cutting, but in the shadow of their recent record profits and investigations into their shady practices, it's just another example of we the people being commoditised and exploited in the name of profit and endless growth.

The banks are 'banking' more and more on the  post office to fulfil the banks community obligations.  In the time since postpay started, the banks have increased the rates of closure of regional branches,  all for the sum of about $90m a year they pay to Australia Post.  The same closures have increased the banks profits by about $30b in that same time.  To top it of, as branches close in regional area, the cost of transporting that cash, where it used to be shared,  is now left to Australia Post to cover.

This is a good article putting forward APs position

https://www.afr.com/companies/financial-services/paying-a-pittance-australia-post-wants-banks-to-increase-funding-20240530-p5jhx4?fbclid=IwZXh0bgNhZW0CMTEAAR2mCsZW4hS3eSjzQaWt_zFWn5_32EsxD0agYqsA9HiHUgPO4jrDco2OsP0_aem_Aczl7VN93GXnA7UbD0V0p8BdTHRr15fj6gFgv6XhsM_9nG_vb80PGtq0GUPcSiK6S2froFM1RkAxFLKwFRRM5xai

SadKangaroo wrote on Jun 2^nd, 2024 at 9:04am:

The area I used to live in had a very high elderly population. The main shopping centre had an ANZ, Suncorp, St George, CommBank, NAB and Westpac branches. They now only have Westpac and CommBank. The Post office is mostly full of older residents paying bills so if I ever need anything that's actually related to the postal service, it's better to avoid that location. I personally don't use cash.  I carry probably about $150 around just in case, but I haven't used it in years.  The last time was to tip a family friend's daughter who is 9 years old $50 as she was helping out in their restaurant for fun as we'd stayed after closing to spend time with them. I much prefer the convenience of tapping my smart device and always using credit. I don't even like using Debit cards, it's safer to use Credit than debit or cash. As someone who used to run a small business, I preferred people paying electronically and we had factored those costs into everything so we didn't add any percentages when using cards etc. But we would always accept cash. I know how important cash is to some people, and the ability to pay with it and withdraw it and I hate seeing the branches close down. I needed cash recently to pay for multiple repairs after the Christmas storms.  I can't believe it's June and we're still going with trying to get everything sorted, but anyway, going into one of the branches, they ran out of 100s and couldn't fulfil the $5000 withdrawal without using 50s and 20s. It's scary how little cash they actually keep on hand. If the banking industry was running on fumes and barely profitable I could understand the cost cutting, but in the shadow of their recent record profits and investigations into their shady practices, it's just another example of we the people being commoditised and exploited in the name of profit and endless growth.

Our ANZ bank (which is about to close) had always said if we need larger amounts of cash, to book it in or phone ahead so they have a few days to get the cash for you.
A couple years ago I went in for $5,000 and it was like pulling teeth!
The horrible bank teller started telling me off.
It was the first time I needed more than the $1000 allowable from the atm and went in the branch to get it.
She went on about how I did this before … I said in a puzzled stern manner… this was the first time and that she has me confused for someone else!
Funny enough… I’ve never seen her at that branch since. Because I went in next time ready and armed for any other false accusations.
She must’ve been bitchy to many other customers that may have complained.
Hubby has said a few years now to change banks.
I’m starting the transition soon over to a community bank. I’ve heard there is a long line of new applicants at these Bendigo banks!

SadKangaroo wrote on Jun 2^nd, 2024 at 9:04am:

I personally don't use cash.  I carry probably about $150 around just in case, but I haven't used it in years.

And therein lies the incentive for banks...

Don't blame banks entirely...

Australians are following first-world trends - abandoning cash transactions - with cash predicted to be functionally obsolete by 2030.

The elderly may have a problem with this, but do they have a problem with their superannuation funds, where they are at least partly invested in the banking sector, delivering larger returns due to the banks' reduction of their overheads?

I’m still of the opinion if we feel coerced or encouraged to go digital with money … don’t! Because it’s the excuse for closing down more banks and then we have less teller or face to face service. Is that what we really wanted?

And here today… in the beautiful Mornington Peninsula…. A few holding up placards… people toot horns and give thumbs up  :)

---

MeisterEckhart wrote on Jun 2^nd, 2024 at 12:22pm:

SadKangaroo wrote on Jun 2nd, 2024 at 9:04am: I personally don't use cash.  I carry probably about $150 around just in case, but I haven't used it in years.  And therein lies the incentive for banks... Don't blame banks entirely... Australians are following first-world trends - abandoning cash transactions - with cash predicted to be functionally obsolete by 2030. The elderly may have a problem with this, but do they have a problem with their superannuation funds, where they are at least partly invested in the banking sector, delivering larger returns due to the banks' reduction of their overheads?

Exactly.

We are collectively choosing the convenience of cashless.

Some people prefer to think that it's the Government trying to control or track every dollar we spend in some conspiracy.

But it's just easier, and safer, to go cashless and pay with someone else's money (credit).

It works better for me personally, but that doesn't mean the choice should be taken away from others.

And again, it's not like the banks are short a dollar, it's just if they don't show positive growth year after year their share prices will drop, so of course they're going to cut costs.

It's not about providing financial services for them, it's about making a profit.