ABA CEO interview with ABC SA Regional Drive’s Narelle Graham on regional banking

E&OE
Radio Interview
Interview ABC SA Regional Drive
8 October 2026

Topics: Regional banking

Narelle Graham: Apparently, our major banks are keen to open some multi-bank hubs in regional areas that don’t currently have a branch. They’ve asked the ACCC if they can work together on joint infrastructure and not breach competition and antitrust laws. Simon Birmingham is the chief executive officer of the Australian Banking Association. Simon Birmingham, good afternoon.

Simon Birmingham: Hello, Narelle. Great to speak with you again.

Narelle Graham: Great to speak to you in a new capacity these days too. Simon Birmingham, why do the banks want to do this? Is this to meet some sort of obligations?

Simon Birmingham: Narelle, it’s a recognition that we are seeing huge changes in consumer dynamics when it comes to banking. More than 99 per cent of transactions nowadays happen digitally, and the use of bank branches and regional bank branches as well has plummeted in terms of interactions by more than 60 per cent. And that, of course, is challenging the fundamental economics of these old service delivery options, and we even see an increasing number of banks and brands operating that are exclusively digital only, and customers choosing to shift their banking into those brands and banks.

So, in that environment, we are trying to confront the reality that, notwithstanding people overwhelmingly choosing those options, we know that there are some people who really do still need face-to-face banking solutions, and that many people at occasional points will still value those face-to-face options. So, this is about how do we ensure that there are some commitments that guarantee banks will keep delivering those and make them available in regional areas and also testing some new service delivery models to ensure they can be viable for the future.

Narelle Graham: Now, are there government legislated obligations though that the banks need to meet about having a presence in regional areas? I know that the Commonwealth Bank has agreed to keep some of its branches open for a little bit longer. I’m just wondering – I can understand what you’re saying in that people need bank branches, and they certainly want bank branches regionally, but I’m just wondering if there are obligations legislatively that the banks are trying to meet through this model.

Simon Birmingham: No, there aren’t, Narelle. There aren’t legislative obligations. You do have the four major banks – Commonwealth, Westpac, ANZ, and National Australia Bank – who have been applying a moratorium on regional branch closures for a number of years, and they have some distance to go to a various extent. Westpac and CBA have both extended that out through to 2030 in terms of providing certainty that their branch networks will continue. And what we’re asking the ACCC for permission to do isn’t just to trial the hubs as a new service delivery model, but also to be able to look at how we apply commitments to regional Australia, work as an industry to do so, so that we can ensure that no parts of the country, in terms of reasonable amounts of size and population and need, are left unserviced and they have confidence for the future.

Narelle Graham: Help us get a sense of how the regional bank hub model would work.

Simon Birmingham: So, what we’re asking is permission to trial up to 10 hub sites that will be spread across Australia in communities that do not currently have a bank branch, because nobody wants to challenge the viability of those branches. The hub models would likely be a mix of different service models, because again, we want to trial what works best in the Australian context. There are some international examples of this in the UK and in New Zealand but want to try in Australia is some of them that would look very much like a traditional bank branch, its own standalone building or site in a town that you’d walk into. It just wouldn’t have the branding of any particular bank.

Narelle Graham: Okay, so you could do your banking no matter who you’re with.

Simon Birmingham: That’s right, to an extent. In other cases, we want to trial it with different partners like Australia Post, who deliver Bank@Post, or potentially local councils and use them as partner models.

Narelle Graham: Why do you need permission from the ACCC?

Simon Birmingham: Because this goes to banks collaborating, and as we rightly have in Australia, we’ve got very tight and tough competition laws to ensure that people, and particularly businesses, can’t collude, and that we have competition in the country. That’s where we’ve… (inaudible)…, none of this changes the products that banks offer, so that fierce competition for mortgages, deposits, all of those accounts and services that we use, that remains untouched. This is purely about sharing some infrastructure, and how we fund that infrastructure, so how we coordinate as to a funding model for it, and how we coordinate the delivery of services in it in a way that doesn’t impinge at all on that competition for banking products.

Narelle Graham: How likely do you think it is that the ACCC will say yes?

Simon Birmingham: Look, I’m relatively optimistic. I never want to prejudge – our regulators have an important job to do independently – but obviously, we’ve worked with our lawyers to put together what we think is a compelling case. There are those international examples, and ultimately, this has to pass a public benefit test, and we think it is in the public benefit to test these types of models. And for those communities who currently don’t have a bank branch, then clearly this is actually going to give them a service that they otherwise do not have.

Narelle Graham: Simon Birmingham is the chief executive officer of the ABA these days. So, I understand that a list of potential locations hasn’t been revealed, and we’re talking about 10 in the first instance. What would the banks be looking for in a location? Would it relate – obviously, yes, somewhere that doesn’t have a branch, but also population size, is that something that’s going to come into it?

Simon Birmingham: So yeah, we’re looking at a number of different metrics: population size, distance to the nearest branch, but then also some measures of vulnerability, so ageing populations or populations with particular higher needs, including Indigenous communities, and also levels of economic activity. Because we know one of the things that, and one of the groups that actually sort of most value a branch presence or similar, are small businesses and local community clubs and people who, in those instances, often need to still do cash floats and the like.

So, we’re envisaging that these will have not just ATMs but also coin machines, and that the real live person who will be working in them will be able to help individuals and small businesses use those technology tools to be able to undertake their banking needs, be it an individual or a small business.

Narelle Graham: Simon Birmingham, thank you.

Ends