Regional communities are losing up to $1 billion a year in investment and thousands of jobs as bank branches continue to disappear, according to a new push from an industry alliance calling for urgent reform.
The Regional Banking Investment Alliance says nearly 900 branches have closed across regional and remote Australia over the past nine years, a 38 per cent reduction that has cost almost 4,000 local jobs.
The group argues the closures have stripped essential services from country towns, with flow-on effects for businesses, employment and community confidence.
Regional Australia Bank CEO David Heine said current measures were failing to stop the decline.
“Face-to-face services are part of a bank’s social licence to operate in Australia, and many are abandoning that responsibility,” he said.
“Face-to-face banking services are not a ‘nice to have’. They provide essential services and trained personnel to cater for the needs of people and businesses in regional and remote communities.”
The alliance says existing measures, including the bank branch closure moratorium until 2027 and expanded services through Australia Post, are being used to mask ongoing reductions in opening hours and services such as cash handling.
Instead, it is calling for a bank-funded cost-sharing model, effectively a community service obligation, to ensure in-person services remain available in regional areas.
Heine said regional banks were currently carrying an unfair burden.
“In a process called pass-through banking, regional banks are providing the daily services, while larger and online banks profit from mortgages and deposits,” he said.
“Branches provide employment and infrastructure as well as community engagement and support. They are places of action when people need help from trained professionals.”
The alliance says banks have collectively saved around $1 billion a year through branch closures, while some of the fastest-growing institutions operate without any regional branch presence.
Capricornian Bank CEO Dale Grounds said the current approach lacked long-term certainty.
“A proper incentive-based scheme is needed to preserve the financial viability of existing branches and incentivise banks to invest in new ones,” he said.
“This is a bank problem, and the industry needs to step up and fulfil their obligations to the Australian people.”
Concerns have also been raised about the impact on cash access, particularly for regional businesses.
Australasian Convenience and Petroleum Marketers Association CEO Rowan Lee said bank branches remained critical infrastructure.
“It is essential that bank branches remain open, especially in regional areas. Fuel stores have been mandated by the government to accept cash, and bank branches have the staff and the security to ensure the ongoing accessibility to cash,” he said.
Advocates for older Australians and those without reliable internet access say the shift to digital banking is leaving many behind.
Combined Pensioners and Superannuants Association Senior Policy Officer Billy Pringle said the loss of branches had wider social consequences.
“Face-to-face services cannot simply be replaced by online banking, especially for groups and communities who are digitally excluded,” he said.
“A loss of bank branches in the bush means a loss of financial autonomy and financial safety for these communities.”
The alliance, which includes 24 regional banks and a range of community organisations, has been consulting with industry, government and community groups in recent weeks and has launched a petition calling for support for the proposed model.
Two federal parliamentary inquiries have previously found regional bank branches to be essential services, but the alliance says meaningful policy change has yet to follow.
Read all the way through to the end of the story? So did lots of other people. Advertise with New England Times to reach New England locals who are interested and engaged. Find out more here.