Major Australian Bank Hurting Communities with Branch Closures
One of Australia’s largest commercial banks admits that closing branches within rural and regional areas has adversely affected local communities.
Ross Miller, Westpac’s chief of customer engagement, stated that Westpac knew that not all customers were ready to move away from face-toface banking.
He stated, “For a small number of people, it is still preferable and necessary to go into a bank branch.”
“This means that even though there are fewer people who use our branches, their absence has a significant effect on others.”
In Sale, in southeast Victoria, was the first Senate hearing. Westpac previously announced it would close a branch within the city.
Inquiries were conducted with bank executives, councilors, as well as members of the community to learn about the impact of bank closures on regional banks.
As the inquiry was progressing, Westpac agreed to postpone closing Sale branch and to review other locations that were flagged as closed.
The Senate committee was not content to discover that Westpac did not notify certain communities via email. They preferred meeting in person.
“You make billions of dollar in profits each year. Senator Matt Canavan, chair of the committee, asked why it is not possible to travel to rural towns to talk to residents about closings.
Miller responded that the bank had just delayed the shutdowns and it would now be possible to work with the councils.
After Westpac had announced that it would cease operations, the inquiry was launched 20 branches In 2023, there will be approximately half the population living in rural and regional areas of South Australia, Victoria, New South Wales (NSW), and Queensland.
The State of Bank Closures Australia
According to Data According to the Australian Prudential Regulation Authority (APRA), commercial banks closed 1,680 branches in the country between June 2017 – June 2022. 677 of these were located in rural and regional areas (40.2%).
With 466 branches closing in the year up to June 2021, the largest number of shut downs was during the COVID-19 pandemic.
The most drastic drop in bank branches among the jurisdictions was recorded by NSW (526), followed closely by Victoria (403), and Queensland (364).
Major banks stated that branch closings were being accelerated by a sharp decline in foot traffic and a growing number of customers who switch to digital services.
Miller stated that 96% of Westpac’s transactions are now digital.
He also pointed out that Westpac didn’t take closure announcements lightly, saying that the bank had already taken into account customer use as well as distance between branches.
The representative from the National Australia Bank (NAB), said that it had considered many factors when closing down a branch, and that they had taken steps to minimize the impact.
“”NAB executive retail: When there is a closing, our local team works closely with customers up to that closure to make sure they know which banking options will remain.” Krissie Jones said.
NAB also witnessed a significant shift in customer behavior in relation to banking activities.
“More than 93 per cent of all interactions with customers today are digital.” Jones stated that the average NAB customer logs in to our app or online banking 33x per month.
“A branch is rarely visited by people who are not able to afford it.” Only three percent of our personal bank customers used our branch network last year to do their banking.
Bank Closures and their Impact on Rural and Regional Communities
Although most Australians use digital banking services, data from banks indicates that a significant portion of the population still requires a physical branch.
Bank closures can have a significant negative impact on Australians.
The following is an extract from the Final report Some communities had to travel hundreds of kilometers to bank after their local banks closed. This was because of the Regional Banking Taskforce.
Customers who had large amounts of cash at home faced security and safety issues.
Small business owners and farmers also faced higher stress and inconveniences as they had to frequently visit banks to deposit money or use other services.
When a bank closes, there are many other problems, including unemployment, financial loss, and lack thereof.
The first hearing was concluded by the Commonwealth Bank, who said that it would suspend any further regional closures throughout the year. Westpac however, held eight of these stops.
NAB and ANZ, however, decided to continue their plans to restructure local branches and close them down.
From Major Australian Bank Hurting Communities by Branch Closures
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