Senate inquiry digs into how wave of closures has affected rural areas
Residents of a low-income part of regional Victoria have told a Senate inquiry how the closure of bank branches in their area has negatively impacted their community.
The inquiry into regional and rural branch closures was held in Sale, east of Melbourne, on Thursday, according to a report by NCA Newswire. It looked into how the move to digital banking and the resulting reduction in branches have impacted small communities.
More than 300 bank branches have been shuttered across the nation in the last financial year, with 95 of these in regional areas.
However, Westpac and Commonwealth Bank have paused closures during the inquiry.
Banks have said branch closures have been necessitated by customers’ pivot to online banking. However, Anthony Basford, chief executive of East Gippsland Shire Council, told NCA Newswire that the region has an inconsistent internet signal. That makes it difficult for some locals to access online banking services.
“Regional Australians are not FIFO residents; we live here and we thrive here, and we urge banks to reciprocate and invest in us and our regions as well,” he said. “[Internet] is very intermittent; one of the things we put in the submission is that any internet condition is subject to power outage.”
Business impacts
Steven Piasente, chief executive of Latrobe City Council, said the closure of physical branches had a significant negative effect on small businesses in the community.
“The loss of banks in Latrobe obviously impacts on our business and community,” Piasente told NCA Newswire. “The main concerns that have been shared with us via our business community have been their inability to obtain cash to support their business operations, so to access staff during the day to talk about business banking needs. Small businesses in Morwell and Moe were significantly impacted by COVID; the inability to undertake banking locally further compounded some of their challenges.”
Piasente also said that many locals are older or don’t use the internet.
“[A] primary area of concern for them is how they’ll actually gain cash for their business and undertake banking,” he said. “The community is obviously very disappointed. You don’t necessarily hear from those who are disproportionately impacted in a loud way. Those segments of the community don’t have a particularly loud voice, especially those who don’t use internet services.”
Banks slammed
Ross Miller, chief customer engagement officer at Westpac, told the Senate inquiry that while many customers were happy to bank online, branch visits were “necessary” for others.
“For a small minority, going into a bank branch is still preferred and necessary,” he said. “This means while there are fewer people using our branches, the absence of one is to have a significant impact for some.”
However, Miller said that Westpac had few plans to actually visit towns impacted by branch closures, NCA Newswire reported.
Read next: Branch closures reaching “crisis proportions” – FSU
Committee chair Senator Matt Canavan slammed the bank for not “talking to locals until after the decision to close the branch is made.”
“You make billions of dollars in profits a year,” Canavan said. “Why can’t you travel to country towns and talk to them about closures?”
“Senator, now that we have postponed them, we can take the time to engage with councils,” Miller said. “We’re reviewing each of those branches during the postponement.”
Australia has seen a 30% drop in the number of bank branches over the past five years, NCA Newswire reported. A third of those closures have been in regional and remote areas.
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