APRIL 5, 2025: A group of 19 regional and rural banks are calling for a better deal to meet the increasing costs of keeping their branches open for people who need access to services, such as cash handling and expert financial advice, as well as help in handling scams and fraud.
The collective argues that regional bank branches which can cost around $1.2 million a year each to run, are a vital community service which is currently provided with no support from big banks who profit most from the financial system in Australia. They have written to major political parties and independents seeking their support in the lead up to the election.
“Our bank branches provide a range of secure services and professional advice that cannot be replaced by online services, post offices or ATMs,” David Heine, CEO of Regional Australia Bank that runs 38 branches in regional NSW said.
“The big banks have shut over 800 branches in rural and remote areas since 2017, trying to push Aussies toward digital services that simply don’t provide all the services people need in the bush, particularly during natural disasters and regular network outages.”
The group includes Regional Australia Bank, The Capricornian, Traditional Credit Union, Broken Hill Bank, Northern Inland Credit Union, Cairns Bank, The Mutual Bank, Central Murray Bank, Bank Orange, Summerland Bank, Horizon Bank, Geelong Bank, Family First, Warwick Credit Union, Bank WAW, South West Slopes Bank, Hume Bank, Goulburn Murray Credit Union and Coastline Bank.
The collective says that in many country towns, small regional banks end up acting as a de facto branch for the big banks which have abandoned the bush.
In a process known as “pass-through banking”, customers use regional bank branches for costly services like cash handling and then transfer their funds to big banks who enjoy the profits.
The group wants support for a levy on big banks who profit most from the Australian community and yet fall short on investment in regional Australia. It would ensure big banks meet baseline community expectations, either directly though their own regional branch network, or via a levy to keep regional banking services available.
The Mutual Bank operates seven branches in the Hunter Region. CEO Mark Williams said branches play a key role in the bank’s distribution strategy and in supporting the communities it serves.
“The Mutual Bank’s purpose is to champion financial wellbeing for our members and regional communities to help people thrive, and our branch network plays a vital role in achieving that purpose.
“The Mutual Bank is the only bank in town in two of its locations and has fulfilled a much-needed gap for those communities in being able to access essential banking services. While we have seen an increase in customers and branch transactions in those locations, the challenge remains ensuring that we are not simply acting as a transacting conduit to funnel funds to the major banks who have withdrawn their support in those communities.”
Horizon Bank CEO Jon Stanfield, who runs 10 branches in southern NSW, said a recent survey of community members in regional NSW showed that over 85% of respondents ranked
the ability to speak with a trained worker in person when a victim of a scam or fraud was very important.
“The survey also showed that 84% of respondents ranked the contribution of a bank branch to the local community through employment was very important to them,” Mr Stanfield said.
The Capricornian CEO Dale Grounds said his bank runs eight branches in Queensland and was working hard to keep them open and providing essentials services to the community.
“Aussies should not be disadvantaged because of where they choose to live,” Mr Grounds said. “We need help to provide these essential services to our communities, including older Australians, people living with disabilities, First Nations communities and the small businesspeople who live and work there.”
Broken Hill Bank General Manager Louise Hunt and Cairns Bank CEO Liam Tiernan said any new government needed to ensure that discussions about the future of Armaguard and cash-in-transit services includes regional banks and other regional stakeholders who are currently forced to pay the highest costs for cash services.
“In Broken Hill, we have commissioned a permanent back-up generator so we can remain open during power outages or other disaster events, so the community can access cash,” Ms Hunt said. “Cash in transit costs, including concerns over the future of Armaguard, are very real, as evidenced recently during the power outages that affected our region.”
Mr Tiernan said: “The current cash distribution system disadvantages regional communities that rely more heavily on cash and are often more susceptible to natural disasters that may lead to outages.”
The government handed down its budget papers on March 25 with no allocated funding to support regional banking or a plan to keep their branches funded and open.
This is despite the establishment of a Regional Bank Taskforce and a ‘Bank closures in regional Australia’ inquiry yielding little positive action from Canberra to assist regional bank branches.
Instead, the Budget papers reiterated temporary band-aid commitments from the big banks to keep their remaining branches open for just two years and support for limited services at Bank@Post.
There are increasing demands on regional bank branches to provide assistance with fraud and scams, cash handling services, along with the increasing cost of cash-in-transit services, and falling investment from the big banks in regional towns.
Goulburn Murray Credit Union CEO Richard O’Nians said their organisation had been providing services to regional Victorians since 1950, through six Victorian credit unions in the Goulburn Murray region that merged over time to strengthen their banking services.
“We can’t stand by and continue to watch regional and remote Australia be underserviced and undervalued,” Mr O’Nians said. “It is about responsible investment in regional banking, including cash distribution.”
Traditional Credit Union CEO Simon Lyons is committed to bridging the gap between traditional financial services and First Nations’ community needs, with 14 branches across the Northern Territory which came with their own unique costs.
“We provide essential banking services to First Nations people in remote areas of Northern Australia including financial and digital literacy training in multiple languages,” Mr Lyons said. “We believe banking is an essential service and everyone in Australia deserves to be able to access practical financial services, regardless of their location.”
Hume Bank CEO Stephen Capello said of his 15 branches, 5 are the only bank in town after the big banks have continued to withdraw their services. “In regional Australia, based on the insights we have gathered, bank branches play a role well beyond that of providing essential banking services. They are a symbol of hope – once the last bank branch leaves a town there is concern that other essential town services will follow, which can put the town on a path of irreversible decline’’
