Rural Bank Closures Leave Vulnerable Australians Struggling: Report

This photo illustration shows a mixture of different value Australian coins in Sydney, Australia on June 5, 2014. (Peter Parks/AFP via Getty Images)

Rural bank closures deprive vulnerable Australian communities of financial support, with many regional residents lacking the funds and digital know-how for online banking, new research shows.

Over a third of regional residents feel financial strain when paying for high-quality internet, impacting their ability to afford other essentials.

About 36 percent spend over 5 percent of their income on internet access, exceeding urban levels, while regional Australians also have a higher percentage needing to spend over 10 percent.

“For many in this cohort, a reliable internet connection is beyond their economic reach,” the ARC Centre of Excellence for Automated Decision-Making and Society report said (pdf).

As a result, it mentioned more regional residents would have to use cheaper and less reliable services, deal with intermittent connectivity, or have no connection at all.

“Therefore, regional bank closures remove face-to-face services in precisely those geographic areas where there is a higher need for such services.”

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Indigenous Australian communities face particular vulnerability with local bank closures, as many rely on face-to-face banking despite the growth of online services.

Difficulty accessing cash and worries about elder financial abuse in remote areas were found to contribute to Indigenous Australians’ vulnerability.

Professor Julian Thomas emphasised the importance of face-to-face interactions for handling complex banking tasks and tackling elder abuse, scams, and fraud.

“By removing banks in regional areas, it potentially disadvantages an already vulnerable community from accessing basic necessities such as financial services—impacting their independence,” he said.

“The quality, reliability, and cost of internet in remote areas also pose challenges for these communities, making going to a branch to speak to a person even more crucial.”

A woman walks into a regional branch of Westpac bank in Albany, Western Australia, on Nov. 22, 2023. (Susan Mortimer/The Epoch Times)

He said improving digital access and participation hinged on better online safety, but it was essential to establish reliable internet infrastructure first.

“We can’t expect these communities to learn about online safety if they don’t have working internet to begin with,” he explained.

Earlier research (pdf) from the ADM+S Centre confirmed remote Indigenous Australian communities were among Australia’s most digitally excluded groups, particularly as remoteness increases.

About 43 percent of Australia’s 1,545 Indigenous Australian communities and homelands lack mobile service, including 84 percent with only a shared public phone or no telecommunications access.

On that note, Senior Research Fellow Daniel Featherstone stressed the need for all Australians to access and use digital technologies effectively as more services move online.

“We use these technologies to access essential services for health, welfare, finance and education, participate in social and cultural activities, follow news and media, as well as connect with family, friends, and the wider world,” he said.

“Everyone should have the opportunity to benefit from digital technologies.”

The research was sent to the Senate inquiry on regional bank branch closures, scheduled to meet in Kingston SE, South Australia, on Feb. 21.

The ongoing inquiry is looking into the impact of increasing rural bank closures.

People queue for ATM machines outside a branch of the Commonwealth Bank in Melbourne on Aug. 8, 2018. (William West/AFP via Getty Images)

800 Rural Bank Branches Closed Since 2017

It comes as almost 800 country branches have closed since June 2017, forcing some regional residents to travel long distances to handle their finances.

Just this month, NAB faced criticism for shutting down its operations in Lithgow and Oberon, central western New South Wales.

Meanwhile, Westpac informed the Finance Sector Union (FSU) of its plan to close 20 more branches across four states, leading to the imminent loss of 91 jobs.

Westpac recently told the Cloncurry Shire Council that the branch, which has been open since 1905, will close on May 19.

Federal MP Andrew Gee believes these banks must grasp how far rural residents travel to reach a branch.

“There is little thought given to seniors and vulnerable customers who don’t have access to transport,” he added.

“They have a very city-centric attitude.”

Digital Banking Rise and Cash Decline

Nevertheless, leaders of all major banks argued the fast adoption of digital banking and the decrease in cash transactions have made branches less feasible.

“Westpac has more than five million digitally active customers and we know their expectations are changing. Our customers are using branches less, for fewer reasons, and choosing to use digital banking more often. Our service approach is responding to customer preference. That’s why we’re investing in digital services so our customers can bank with us anywhere, at any time,” Westpac said in response to the Cloncurry bank closure.

The Big Four bank announced closing its Cloncurry branch, only to move services to Bank@Post at Cloncurry LPO, a mere 350-meter walk away.

“We remain committed to supporting our customers in Cloncurry and are happy to discuss this matter further with Cloncurry Shire Council,” Westpac added.

Westpac recently made a 10-year deal with Bank@Post to offer over-the-counter banking services in 3,500 locations nationwide, including 1,700 regional areas without a branch.