Almost one in four bank branches across regional Australia have closed permanently since 2017, a paper by the Regional Banking Taskforce says.
There were 2500 branches in regional and remote Australia in 2017, but that number dropped to 1900 in the four years to June 2021 - a 24 per cent decline.
In the past year, there has been a 5 per cent decline in regional branches.
The statistics were published in a recent taskforce 'issues paper'.
The Taskforce was formed by the federal government, banks, peak bodies and Australia Post in October to assess the impact of bank branch closures on regional communities.
The paper said while there had been a significant decline in the number of branches in remote and regional Australia, 41 per cent of all branches were in regional and remote areas in 2020 where 28 per cent of the Australian population lived, with these percentages little changed from 2017.
In terms of jobs, it said the banking sector was also a relatively small employer in remote and regional Australia.
"... Banks employ less than 0.5 per cent of total employment in regional and remote areas and banks have scope to redeploy staff if branches close," it said.
The paper said the roll out of digital technology played a major part in the shift from bricks-and-mortar transacting to online banking.
"... In June 2020, 95 per cent of adult Australians in regional areas had internet access at home - the same as for metropolitan areas, and up from 82 per cent in June 2017."
Eighty-nine per cent of internet users in regional areas also performed banking activities online in the past six months - the same as for metropolitan areas and up from 82 per cent in May 2019.
Regional Australians are doing their banking online rather than visiting a branch, according to the paper.
"64 per cent of regional Australians [are] doing their banking with their main financial institution online via a computer or laptop in the last month and 61 per cent via a smartphone. This compares to 32 per cent visiting a branch and 10 per cent using telephone banking," it said.
Other bank face-to-face points of presence in regional and remote Australia have seen a more modest decline from around 2500 to 2400 in the past four years, with Bank@Post numbers steady at around 1900.
The Taskforce points out that a similar decline in bank branches has occurred at a national level, with branches declining 22 per cent, from around 5800 to 4500 over the past four years.
Taskforce member, Australian Banking Association, said most branch closures had been in cities, not regional areas.
"Recent APRA data shows that the overwhelming majority of bank branch closures in the past year have been in major cities, and not in regional areas," ABA CEO Anna Bligh said.
"Where branches are closed, it's because customers no longer need to do their banking face to face.
Ms Bligh said as the world continued to become more digitalised, the way customers wanted to do their banking was following the same trend.
"Banking online platforms and apps are so incredibly advanced these days, most Australians are carrying around a bank branch in their pockets," she said.
"The ABA will work with the Regional Banking Taskforce to highlight the improvements in bank services to all Australians, especially those in regional areas."
Another member, the Australian Local Government Association, said a lack of banking and financial services could hinder growth and development for local and regional communities.
"Fewer banking options potentially threaten efforts to attract more people and businesses to our regions," ALGA president Linda Scott said.
"Banks are an essential service, just like pharmacies, supermarkets, medical practices, and government services, and their physical disappearance can create considerable difficulties for local communities."
Federal Regionalisation Minister and Nationals senate leader Bridget McKenzie said having access to bank branches was vital for every community, particularly for residents who were unable to use online services to conduct their banking.
She says bank branch closures in the regions "affect the liveability of towns".
Taskforce co-chair and NSW Nationals senator Perin Davey said banks and financial service providers had communicated to him a desire to find ways to service regional communities and he looked forward to exploring avenues through the taskforce.
Other taskforce members include ANZ; Commonwealth Bank of Australia; National Australia Bank; Westpac; Bendigo and Adelaide Bank; Bank of Queensland; the Customer Owned Banking Association; the Council of Small Business Organisations Australia; and the Australian Chamber of Commerce and Industry.
The taskforce met for the first time in Sydney on 9 November and for a second time on December 8.
Katter's Australian Party leader and Traeger MP Robbie Katter said western Queensland communities were struggling and it was time to act.
"...Without waiting for an inquiry, why don't we express our views publicly in regards to the direction we should move towards instead of waiting for a report that may never deliver anything?" Mr Katter said.
Mr Katter said the answer to regional banking issues, and to questions pertaining to rural development more broadly, was a government-owned or backed bank.
"To make initiating this process simpler, you could consider a model that has some of the necessary infrastructure already in place," he said.
"For example, Australia Post was considering a model of this nature which would be the perfect vertical alignment for their operations.
He said bank lenders could operate out of Australia Post offices, similar to how it's done in New Zealand through the NZ Post and its Kiwi Bank.
"The beauty of this solution is that is more likely to make money for the tax-payer than burden them, ultimately this model could be highly beneficial to the government's bottom line."
Australians can submit their opinion on regional bank branch closures to the taskforce by email or mail by December 18.
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