A survey has found overwhelming support for face-to-face bank branches in regional areas, with 95 per cent of respondents rating them as essential or important.
The Regional Banking Investment Alliance (RBIA) Regional Banking Insights Survey showed that Bank@Post does not adequately service the needs of non-metropolitan communities and businesses, and provide only a second-class alternative.
The RBIA called on the industry and federal government to act on its proposal for a Community Service Obligation, which would share the cost of keeping regional branches open.
The survey of 1555 regional Australians, in September and October, found that 39 per cent of respondents had used Bank@Post and 80 per cent of those did not consider it a sufficient alternative for their banking needs.
Regional Australia Bank CEO David Heine said the results sent a clear message.
“People want a local branch with trained staff they can trust and who know them,” he said in an RBIA statement.
“They need help with scams, access to cash and somewhere to discuss their finances privately.”
“The government has a practical funding proposal on its desk. It is time to act.”
Among those answering each question, the survey found: 99 per cent rated highly-trained branch staff as essential or important; 98 per cent rated the privacy and security that a branch provides as essential or important; 96 per cent rated bank support for local businesses as essential or important to their community; and 94 per cent rated in-person help with scams and fraud as essential or important.
Respondents described long journeys to reach a branch, unreliable internet and the need for personal help after a scam, a card failure or the death of a partner.
The RBIA said that an Australian Banking Association announcement in October seeking ACCC approval for regional service commitments, a trial of up to 10 banking hubs and a joint funding model, will not provide a full solution.
The release also stated that branch closure moratoriums and Bank@Post are also not a complete solution.
Traditional Credit Union CEO Simon Lyons said regional and remote communities needed reliable, ongoing access to a full range of banking services.
“A moratorium has an expiry date. It does not bring back a branch that has already closed or solve the cost of keeping one open,” he said.
“Many branches subject to the moratorium have reduced hours of operation and the services they provide.”
“Banking hubs and Bank@Post can help, but they cannot be the whole answer. Communities need trained people who understand their circumstances and can help when a banking problem becomes urgent.”
The RBIA, which is made up of 25 regional banks and supporters, stated that its proposed Community Service Obligation would cost around $153m a year and would be optional for smaller banks to participate. Funding would be available on equal terms to all banks with qualifying regional branches. No taxpayer funding would be required.
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Queensland Country Bank CEO Aaron Newman said banks that maintained regional services should not be left to carry an unfair share of the cost.
“Our branches handle cash, help local businesses and employ local people,” he said in the release.
“We also serve customers who use us for those transactional services while keeping much of the profitable part of banking with a major bank.
“Banks that benefit from regional Australia should share the cost of serving it.
“Our proposal supports the banks that invest in branches and gives them greater certainty to keep doing so.”
Following Treasury’s initial proposal in November 2024, RBIA undertook detailed consultation and analysis. Legislative documents to implement its proposed funding model have been prepared and provided to Treasury.
“Regional communities have made their needs clear. The government should now put lasting support for regional branches in place,” Mr Heine said.
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