ABA CEO interview with ABC Adelaide’s Nikolai Beilharz on regional banking

E&OE
Radio Interview
Interview ABC Adelaide
8 October 2026

Topics: Regional banking

Nikolai Beilharz: We know bank branches have been closing down, especially in regional areas of South Australia and Australia more broadly, including a number of places that have no local banking representation anymore. Well, a new plan has been put forward by the Australian Banking Association to open multi-bank hubs in areas where there are no physical bank branches, so how would it work, and could it work? I’d love to hear from you if you’re somebody that still uses a bank branch, finds it really important, whether it’s shut down for you and it’s led to changes. 1300 222 891 is the phone number. Simon Birmingham is the CEO of the Australian Banking Association. Of course, you know him well from his time as a senator, long-time Senator in South Australia as well. Simon Birmingham, thank you for joining us this afternoon.

Simon Birmingham: Hello, Nikolai. It’s great to speak with you again.

Nikolai Beilharz: What would this multi-bank hub look like, Nikolai?

Simon Birmingham: What we’ve asked the ACCC for permission to do is a couple of things. The first is to work together as an industry around some commitments that banks can make and how we can turn that into an industry standard, really, for services into regional Australia. Because overwhelmingly, we want to make sure that first and foremost those services will continue to be delivered by banks under their own proprietary banner through their own branches or other service delivery mechanisms. But secondly, we’ve asked to trial this model of up to 10 banking hubs as a trial. They’re going to perhaps take some different forms in this trial stage. Some will be standalone, not dissimilar to an existing branch that is its own building site and infrastructure. Others will be looking to partner with local government, Australia Post, or the like, as potential service delivery partners for this type of hub model that can provide services to communities, not just supporting one bank customer, but the customers of multiple banks.

Nikolai Beilharz: Does it mean though that in some instances – I’m just trying to picture it in my mind. You’d have a physical building, and there’d be a presence of, you know, for example, the Commonwealth Bank, Westpac, NAB, maybe ANZ that would all have their own staff members in there, or a staff member that can kind of work across those different companies?

Simon Birmingham: No, it won’t involve that many people working each from individual banks because what we’re dealing with here is a vastly changed economic situation for bank branches. Nowadays, more than 99 per cent of transactions happen digitally in some form and the actual interactions in regional bank branches have plummeted by more than 60 per cent between staff and customers. So, what we’re dealing with is how do we sustain a model of face-to-face in-person services for those occasions when people need it, or those fewer numbers of Australians who value it more frequently, and make sure that that’s possible in an environment where people overwhelmingly use them a lot less.

So, these would be staffed more by an individual or two who would be providing shared support to customers of multiple banks. They’d be helping to resolve issues with them, sometimes using the technology that many of us might resolve those issues on without the need to go into a branch. But for those who need it, they could go in and have a real live person, you know, help them use the technology, get it resolved, you know, for them. On other occasions, it might be helping provide in towns that don’t currently have a bank branch – small business banking services to get cash floats and to be able to do deposits and the like in those facilities. And for more complex needs, the human working in these hubs, you know, might set the customer up in a private room with a video conference with a banker from their bank to be able to resolve those issues where they couldn’t be dealt with by the person on the spot.

The model is proposed to be entirely voluntary for any bank, I should stress as well, so that some may choose to partake, others may not. You know that would be part of the competitive environment that banks work in. Some will choose to prioritise their continued investment in their own proprietary infrastructure and services.

Nikolai Beilharz: Given the billions of dollars of profits that the banks make, I mean is it a bit of a hard argument to say we can’t afford to keep these branches open in their own right in their own kind of entities? I mean is there an argument that this should be part of almost the corporate social responsibility of: okay, well, we’re not going to make money on that part of the business, but it’s really important for those people who rely on face-to-face interactions?

Simon Birmingham: Yeah, I mean it’s a common argument across almost anything. Sort of when you step into this job, working with the banking industry, almost anything, whether it’s branches, fees, interest rates, all types of charges – the response is often banks make big profits, and those dollar figures are large figures. But people also need to remember that banks are overwhelmingly owned by Australians. Well over 60% of Australia’s banks are owned either individually by us or through our superannuation funds, and the return on investment they provide is having to meet what is expected by those investors. In terms of a return on equity level, that has actually declined over a period of time. So, they’re big figures because they are very big businesses, but their return on investment is what is necessary to meet those investor commitments and has been under pressure as competition has really grown.

And so, there are certainly services that banks continue to provide that are well and truly loss-making. Many branches would be loss-making. Many customers are loss-making, and that is part of the service obligation. What we’re dealing with here is as an industry recognising that although it may not be profitable to service these communities, there is a responsibility to make sure that face-to-face services remain available for people who need it when they need it, and that what we’re trying to do here is trial different models. These first 10 sites, as the trial, being in communities that have no bank branch at all, and so for these communities, this will be a service and a facility they don’t currently have, and it will give us the chance to see how that works as a potential model for the future.

Nikolai Beilharz: And, so you need approval from the ACCC? Is that primarily around, you know, one of the core roles of the ACCC about whether or not this would reduce competition?

Simon Birmingham: Totally, and so we rightly have tough competition laws in Australia, and it’s really important to be clear what this is not, and it is not any change to the products and services that banks offer and the competition that exists between them. So, any banks participating in this, whether it’s through the regional service commitments they make or through participation in the banking hubs, they will continue to compete and offer different loan products, deposit products, transaction and business products, just as people would expect. This is purely about cooperating in terms of ensuring availability of those products and particularly availability of in-person, face-to-face services in regional areas is explored, so that you know we can hopefully meet the needs of people at vulnerable times in their life when they may actually really need that face-to-face assistance rather than be able to resolve matters using the modern tools that most customers now use day in, day out.

Nikolai Beilharz: Simon Birmingham, thank you for your time this afternoon.

Simon Birmingham: Thanks, Nikolai. My pleasure.

Ends