Frustrated by banks closing their doors in your town? What are the options?

Over the years local towns have watched as big banks have closed their doors in their local communities moving many of their services online. This leaves many people without access or a human to touch base with to get their banking done, work out any problems with scams, or just plain understand what’s what with their money. 

John Williams, Summerland Bank CEO says ‘bank branches provide a critical function for people living in regional and rural Australia who need access to vital services such as cash handling and trained assistance with increasing issues relating to technology, scams and fraud.’

Summerland Bank has now joined a collective of 19 regional banks to fight for a better deal to meet the increasing costs of running their business for people in Northern Rivers and south-east Queensland regions who need access to banking services.

‘Regional bank branches cost around $1.2 million a year each to run and are currently provided with no support from big banks who profit most from the financial system in Australia,’ explained Mr Williams. 

Big bank levy needed to even the playing field

‘The big banks have shut more than 800 regional branches since 2017, as they push Australians toward cheaper digital services that are inadequate and unreliable replacements in the regions, particularly during regular outages and extreme weather events.’

These closures have been coupled with increasing demands on regional bank branches to provide assistance with fraud and scams, cash handling services, the increasing cost of cash- in-transit services, and falling investment from the big banks in regional towns.

The group wants support for a levy on big banks who profit most from the Australian community and yet fall short on investment in regional Australia. It would ensure big banks meet baseline community expectations, either directly through their own regional branch network, or via a levy to keep regional banking services available.

The collective has written to major political parties and independents seeking their support in the lead up to the election.

‘By eliminating essential face-to-face services, these big banks hold an unfair pricing advantage against banks that maintain investment in our towns, jobs and communities,’ said Mr Williams. 

‘Consequently, profitable lending opportunities are redirected towards banks that have not met their social obligations to invest in regional branches.’

Bank branches important

A recent survey of community members in regional NSW showed 84 per cent of respondents ranked the contribution of a bank branch to the local community through employment was very important to them.

Mr Williams said in many communities, small regional banks end up acting as de facto branches for the big banks which have abandoned regional communities. In a process known as ‘pass-through banking’, customers use regional bank branches for costly services like cash handling and then transfer their funds to big banks who enjoy the profits.

‘Any new government also needed to ensure that discussions about the future of Armaguard and cash-in-transit services includes regional banks and other regional stakeholders who are currently forced to pay the highest costs for cash services,’ he said. 

Baind aid budget

The government handed down its budget papers on March 25 with no allocated funding to support regional banking or a plan to keep their branches funded and open. Instead, the Budget papers reiterated temporary band aid commitments from the big banks to keep their remaining branches open for just two years and support for limited services at Bank@Post.

‘Bank branches are vital to local communities,’ Mr Williams said. ‘The staff are part of that community, they understand their needs, create employment opportunities and provide expert advice, security and privacy to their customers. This cannot be replaced by a post office.’