The banking ‘desertification’ in regional and rural areas not only needs to stop but has to be reversed, a business alliance says.
The Regional Banking Investment Alliance (RBIA) says the major banks’ desertion of rural services has blown a $1 billion a year hole in regional investment and cost nearly 4000 local jobs in nine years.
And it says current measures like a “moratorium” and postal banking are a ‘band aid’ solution that many big banks are using to mask ongoing cuts in opening hours and services including cash handing.
The RBIA wants a bank-funded, low-cost, cost-sharing model to be introduced urgently to return banking services, and jobs, to regional and rural communities.
RBIA member and CEO of Regional Australia Bank, David Heine says a Community Service Obligation and cost-sharing model would reverse a cross-subsidy that already exists for banks that stay and regional organisations currently providing face-to-face services with no support.
FACE-TO FACE BANKING
“Face-to-face services are part of a bank’s social licence to operate in Australia and many are abandoning that responsibility,” Heine claims.
“Face-to-face banking services are not a ‘nice to have’ – they provide essential services and trained personnel to cater for needs of people and businesses in regional and remote communities.”
(The banks have previously argued that the growing take-up of digital banking has removed the need for a physical presence.)
Heine says branches provide jobs and support where customers can get help from trained professionals on security, privacy, scam prevention, problem solving and cash services.
The RBIA says that two federal parliamentary inquiries have concluded that branches are essential and that ways need to be found to keep regional branches open to no effect.
It says in nine years, there was a 38% fall in branch numbers as 900 of them closed and nearly 4000 jobs disappeared at a cost savings for banks of $1 billion a year.
FACE-TO-FACE ACCESS NEEDED
Queensland Country Bank CEO Aaron Newman says regional communities deserve, and need, access to banking services.
“The approach being proposed is a practical and fair solution to a growing problem,” he says.
“Regional banks like ours are already doing the heavy lifting to maintain face-to-face services, often supporting customers from across the broader banking system.
“A modest, industry-funded model would help ensure these essential services remain viable and accessible for the communities that rely on them,” Newman says.
“This is a bank problem; the industry needs to step up and fulfil their obligations to the Australian people. That is why the model is 100% funded by banks with no taxpayer funds needed,” he says.
The RBIA says it has been recently meeting with community and business groups, and talking to banks, politicians and Treasury officials.
SUPPORT FOR RBIA
Rowan Lee, the CEO of the Australasian Convenience and Petroleum Marketers Association, is supportive of the alliance.
“It is essential that bank branches remain open … Fuel stores are mandated by the government to accept cash and bank branches have the staff and security to ensure ongoing access to cash.”
A senior policy officer for the Combined Pensioners & Superannuants Association, Dr Billy Pringle says “face-to-face services cannot simply be replaced by online banking especially for groups and communities who are digitally excluded”.
“A loss of bank branches in the bush means a loss of financial autonomy and financial safety for these communities.”
ABOUT THE ALLIANCE
The alliance comprises of 24 regional banks and other institutions. They are: Regional Australia Bank, The Capricornian, Traditional Credit Union, Broken Hill Bank, Northern Inland Credit Union, Cairns Bank, The Mutual Bank, Central Murray Bank, Bank Orange, Summerland Bank, Horizon Bank, Geelong Bank, Family First, Darling Downs Bank, Bank WAW, SWSbank, Hume Bank, Goulburn Murray Credit Union, Central West Credit Union, Queensland Country Bank, Coastline Bank, G&C Mutual Bank, Unity Bank and Beyond Bank. Click here to learn more about them.
OUR EARLIER STORY: Alliance floats new plan to retain services
