An alliance of regional banks, small businesses and community supporters today called for an urgent fix to the ongoing desertion of essential bank branch services in Australia’s regions – a situation that has blown a $1B a year hole in regional investment, and cost nearly 4,000 local jobs in just nine years. Current band-aid measures like the “moratorium” until 2027 and Bank@Post simply don’t stack up, as many big banks are using them to mask ongoing reductions in opening hours and services including cash handing, the Regional Banking Investment Alliance (RBIA) said. The Alliance is proposing a bank-funded, low-cost, cost sharing model be introduced urgently, to quickly counter the ongoing decline in branch services.  The model will see essential banking services and bank jobs with trained staff return to regional and remote communities. RBIA member and CEO of Regional Australia Bank, David Heine said a Community Service Obligation and cost sharing model on banks would simply reverse an unfair cross-subsidy that already exists – where banks that choose to stay and service regional communities are currently providing face-to-face services for the rest of the industry with no support. In a process called “pass through banking” regional banks are providing the daily services, whilst larger and online banks are profiting from mortgages and deposits. “Face-to-face services are part of a bank’s social licence to operate in Australia, and many are abandoning that responsibility,” Heine said. “Face-to-face banking services are not a ‘nice to have’ – they provide essential services and trained personnel to cater for needs of the people and businesses in our regional and remote communities.” “Branches provide employment and infrastructure as well as community engagement and support. They are places of action when people need help from trained professionals – security, privacy, scam prevention, problem solving and cash services.” As a consequence of community backlash, Federal Parliament has conducted two inquiries. Both inquiries concluded that branches were essential and that solutions were needed to keep bank branches in regional areas, however no meaningful policy has been implemented. Over the last nine years, there has been a 38% reduction in bank branches in regional and remote Australia – around 900 branches closed and nearly 4,000 jobs lost. Banks have pocketed about $1 billion a year in cost savings from these closures. Worse still, some of the fastest growing banks in the country, backed by tax-payer protections, provide no face-to-face regional branch support at all. Dale Grounds, CEO of The Capricornian Bank said the “moratorium” on branch closures only covered the Big 4 banks, does not cover reductions in opening hours or services and is set to expire in 2027, whilst Bank@Post does not provide the array or services, privacy or security required by regional people. “A proper incentive-based scheme is needed to preserve the financial viability of existing branches and incentivise banks to invest in new ones. “The RBIA has developed a modest and affordable cost-sharing model that redistributes bank funds to where they need to go, helping fund regional staff working face-to-face in our towns and communities. “This is a bank problem, and the industry needs to step up and fulfil their obligations to the Australian people. That is why the model is 100% funded by banks, with no taxpayer funds needed.” In recent weeks, the RBIA has held several consultations with community and business groups, as well as discussions with other banks, politicians and Treasury. Rowan Lee, CEO of the Australasian Convenience and Petroleum Marketers Association says he supports the Regional Banking Investment Alliance, “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.” Senior Policy Officer from the Combined Pensioners & Superannuants Association, Dr Billy Pringle recognises that “face-to-face services cannot simply be replaced by online banking, especially for groups and communities who are digitally excluded. A loss of bank branches in the bush means a loss of financial autonomy and financial safety for these communities.”

A group of 25 regional banks and supporters have banded together to advocate to keep face-to-face branches open in regional towns. The organisations have formed the Regional Banking Investment Alliance (RBIA) and want essential bank branch services such as cash handling and fraud advice to be supported by  a community service obligation (CSO) on the wider Australian banking sector to share the cost burden. Despite inquires and taskforces, big banks have closed more than 90 regional branches since February 2022, including more than a dozen this year, while RBIA members continue to open branches in towns like Wellington NSW and Capella Qld with no support. Alliance spokesperson and CEO of Queensland Country Bank, Aaron Newman said that regional bank branches often incur additional costs due to “pass through banking”, where customers use regional bank branches for costly services like cash handling and then transfer their funds to big banks who enjoy the profits.  “We help these communities with fraud and scam advice, cash withdrawals and deposits, cash floats, and provide local jobs,” Mr Newman said. “We are passionate about servicing our local communities and keeping the profits local, but it’s really tough when we are competing against giants, who are not doing the same. “Around 30% of transactions in our banks lead to pass through banking, seriously disadvantaging our ability to compete and expand. We just want the banks who are neglecting the regions to pay their fair share in keeping face-to-face services alive.” A delegation of Alliance members recently travelled to Canberra to discuss a cost-sharing model where big banks whose regional branch investment falls short, continue to support regional communities. CEO of Traditional Credit Union (TCU), Simon Lyons said, “This is a David vs Goliath battle. The big four alone made more than $31 billion in profit last year, yet they’re walking away from the communities that actually helped to build their success. “TCU and our RBIA partners turn up every day in places where banking is hard and costly, not because of profit, but because these communities matter, these communities need us. A fair levy on banks that close branches or don’t have any branches would allow us to keep cash flowing, create real jobs, and expand services to towns that the majors have abandoned. “It’s time to support the banks that stay, not just allow those that leave to reward their shareholders at the expense of regional and remote Australia.” This year there have been more announcements that bigger banks are closing regional branches. Meanwhile, banks like Regional Australia Bank are optimistic about face-to-face services. Regional Australia Bank opened a new branch in May, with CEO, David Heine saying, “We are thrilled to announce the opening of our new Wellington branch and are excited to expand our presence in the region. This new location represents our ongoing commitment to providing accessible and reliable banking services to the communities we serve in regional New South Wales.” The Alliance has garnered support from community groups, with the Country Women’s Association (CWA) NSW, Regional HQ, Combined Pensioners and Superannuants Association (CPSA) and National Seniors signing on as supporters. CEO of CWA NSW, Danica Leys said, “Regional and rural Australia is the lifeblood of Australia. Many families in the regions rely on their local branch for not just face-to-face banking services, but for employment and sponsorships. Regional banks keep their profits local and are part of helping our country towns thrive. “People in rural Australia should not miss out on essential services, and face-to-face banking, access to cash, and scams advice are essential for all Australians.” With the finalisation of a cash mandate on the government’s agenda, a new consultation on cash distribution, and continuation of branch closures from larger banks, the Alliance hopes to continue work with the government on creating an environment where face-to-face branch services and fair cash distribution is available, no matter where you live in Australia.