A taskforce looking into regional bank branch closures has called on the Australian Banking Association to strengthen its branch closure protocol and introduce a customer care standard by the middle of next year to improve communication and support in communities where branches are closed or their operating hours reduced.
It has also called on banks to conduct and publish regional bank branch closure impact assessments, giving reasons for the closure and the engagement that will occur with customers and other stakeholders.
These are among the seven recommendations of the Regional Banking Taskforce, which released its final report on Friday.
Regenerating the long-established - but apparently underutilised - Bank@Post service is a key theme of the taskforce's report.
Australia Post and participating banks "should collaborate to promote Bank@Post services more widely and help their customers utilise the banking services available to them.
“This should include working together to formalise and expand programs to support transition to Bank@Post when branches close," the report said.
The taskforce was made up of representatives of the big banks, Bendigo and Adelaide Bank and Bank of Queensland; peak bodies including the Australian Banking Association, the Customer Owned Banking Association, the Council of Small Business Organisations of Australia and the Australian Chamber of Commerce and Industry; Australia Post and the Australian Local Government Association.
Given the make-up of the taskforce, it is no surprise that its report devotes a lot of space to explaining that branch closures are not unique to Australia and reflects, at least in part, a growing preference among customers for banking digitally.
But it does acknowledge that bank branches are an important part of regional communities and it is challenging for many customers to have to change the way they bank.
The taskforce said “banks’ communication and consultation processes do not meet expectations” and a lack of forewarning and transitional support “can leave branch dependent customers frustrated, disappointed and confused about how to do their banking”.
It said banks need to be more innovative in dealing with a declining number of branches.
Surprisingly, other models for much needed industry collaboration prove a step too far, for now.
The introduction to the report ponders "hubs" of one kind or another, where banks might co-locate or co-brand branches, within the limits of competition law. But the taskforce shies away from promoting or even further analysing this option.
The ABA released a statement on Friday saying it would work to implement the recommendations.
The former government established the taskforce in October last year to look at the growing number of bank branch closures in regional and remote Australia, to assess the impact of those closures and to identify how banks could better transition their services, as well as alternative models that could maintain or improve banking services in those areas.
The taskforce was dismissive of the 'PostBank' option. Establishing an Australian variant of Kiwibank, via Australia Post, is a perennial in these debates.
The taskforce argues "this would significantly duplicate" services already offered by Bank@Post, and raises obvious reasons for hesitation on the part of the federal government on competitive neutrality and capital investment grounds.
One frustrating dimension to the taskforce's work is its reliance on APRA's 'Points of Presence' data collection, for June 2021, to portray the dimensions of the branch closure debate in regional and rural Australia it was formed to analyse.
The report notes the number of bank branches in regional and remote Australia fell from around 2500 to 1900 over the four years to June 2021. At a national level, the total number of branches declined from around 5800 to 4500, over the four years.
If the ABA, which must have more current numbers, shared their data, the report's authors left it out.
Given Westpac's plans to bolt the doors on another 100 branches over the next year, industry-wide cost cutting and the unstoppable rise of digital banking services, bank branch numbers will continue to decline, perhaps markedly.
And even after a revamp Bank@Post may not cut it with the (physically) under-banked mass and regional markets.
Opening the door for the soon to be approved, by the ACCC, joint venture between Armaguard and Prosegur to implement more credible banking hub models of their own.