Australian Bank Faces Backlash Over Regional Branch Closures

Australian Bank Faces Backlash Over Regional Branch Closures

An Australian bank has come under fire after announcing plans to close over a dozen branches in regional areas, prompting a wave of criticism from customers and unions. People First Bank, which merged with People’s Choice Credit Union in March 2023, revealed that 18 branches would shut their doors permanently from April, sparking concerns over access to vital financial services in regional communities.

Regional Closures Spark Outrage

People First Bank’s decision includes the closure of 11 Heritage Bank branches in Queensland and seven People’s Choice branches across other states, with affected locations ranging from Nambour to Victor Harbor. While the bank cited “changing customer needs” and the rise of digital banking as reasons for the closures, the announcement has not been well received by all.

Finance Sector Union National Assistant Secretary Jason Hall condemned the closures, calling the move an “attack on regional communities.” According to Hall, these closures will leave thousands of customers “in the lurch,” particularly in areas where face-to-face banking services are still essential for many residents.

“It also really plumbs the depths of irony for a bank calling itself People First to begin slashing branches and staff, effectively leaving the communities they claim to prioritise,” Hall stated.

The backlash adds to growing dissatisfaction among regional customers, who have witnessed nearly 800 bank branches shut down in non-metro areas between 2017 and 2023, according to data from the Australian Prudential Regulatory Authority (APRA).

Bank Defends Decision

Maria-Ann Camilleri, Chief Customer Officer at People First Bank, defended the decision, stating that branch transactions now account for less than 1% of all banking activities. According to Camilleri, fewer than 0.7% of associated customers in affected areas have used a physical branch monthly in the past year.

“While these decisions are challenging, we need to prioritise the services our customers use most,” Camilleri explained. “That means investing in our 24/7 contact centre and improving technology to meet our customers’ need for simple, convenient digital banking.”

Camilleri also reiterated People First’s commitment to employees, saying that the bank would offer alternative roles to all staff impacted by the closures. Regular customers of the affected branches will reportedly receive additional support to transition to digital banking alternatives.

The closures announced by People First Bank come amidst a broader industry shift towards digital-first banking. Just weeks ago, the Bank of Queensland (BOQ) announced its intention to close 16 branches in February—14 of which are located across Queensland, New South Wales, Victoria and Western Australia. BOQ attributed the decision to a desire to “simplify operations” and align with the growing preference for online services.

A BOQ spokesperson stated, “We are focused on supporting our people throughout this process, and most team members will transition into new roles.”

Meanwhile, NAB appears to be taking an alternative approach, introducing extended operating hours for 17 branches, which now open on Saturdays. Additionally, NAB is investing in new ATMs across its locations in a move to maintain some physical banking presence despite the online banking trend.

Growing Impact on Regional Communities

The dramatic shift from physical to digital banking over the past decade has left many regional Australians feeling abandoned. The big four banks have removed over 8,300 ATMs nationwide in the past seven years, with many of these disappearing from rural areas.

For decades, local branches were more than just places to manage money. They were community hubs where residents could build relationships with staff, seek financial advice, and resolve problems face-to-face. Critics argue that phasing out these branches disproportionately impacts elderly customers or those who lack reliable internet access—a reality for many in rural Australia.

Despite assurances of alternative banking methods, such as ATMs and apps, critics argue that these solutions do not adequately replace the accessibility and utility of in-person support.

“Digital-First” Future—At What Cost?

While digital transformation is evidently reshaping the banking industry globally, it raises pressing questions about inclusivity, particularly within Australia’s regional communities. For many, transitioning to mobile apps or internet banking is not straightforward. With the closure of physical branches, questions linger about how adequately banks are addressing these barriers.

The closure announcements by People First Bank and the Bank of Queensland reflect a growing gap between the banking needs of urban and rural populations. Though investment in digital tools might cater to the majority, regional Australians continue to express concerns about equitable access.

Adding to this sentiment, union officials like Jason Hall stress that banks ought to balance technological advancement with their commitment to all customer groups, regardless of geography.

Is There a Solution?

While it’s clear that digital banking is here to stay, some banks are working to strike a balance. NAB’s decision to extend branch hours and redistribute ATMs demonstrates a middle-ground approach, combining digital upgrades while still catering to in-person customer needs.

Whether banks like People First Bank will follow suit and reconsider their strategies remains to be seen. However, taking steps to ensure regional communities are not left further isolated could help restore public trust.

Source

news.com.au


Explore more entrepreneurial insights and success stories at Inspirepreneur, your go-to magazine for business innovation and leadership.

SHARE

Leave a Reply

Your email address will not be published. Required fields are marked *