7 February 2023
ABA CEO Anna Bligh spoke on ABC Radio Australia with Andy Park asking the question ‘When did you last go into a bank?’
ANDY PARK: Anna Bligh is the Chief Executive Officer of the Australian Banking Association. Welcome to you. And, when did you last actually go in to a bank as a customer?
ANNA BLIGH: Well, interestingly, and it was for the same reason, as you did only mine was in January this year, it was to get a bank check for a larger than normal purchase. But before that I can honestly say it was probably five years ago. And that my behaviour and yours mirrors an escalating trend right across the country. We’re in the middle of a revolution on how people bank and how they use banking services
ANDY PARK: How many branches have closed since the pandemic? And can you purely blame the pandemic? Because, surely, there was a lot of coverage about the closure of branches pre-pandemic?
“What we can see very clearly in the data is that a number of trends that were well underway, literally for a decade since about 2010, more transactions were using cash than cards. And that flipped in about 2010, and cards now, card payments, tap and go digital wallets, all of those payment methods, considerably outweigh cash”Anna Bligh, ABA CEO
ANNA BLIGH: Well, I don’t think people do but I certainly wouldn’t, I don’t think banks blame the pandemic. What we can see very clearly in the data is that a number of trends that were well underway, literally for a decade since about 2010, we sort of can see in the data that in 2010, or just before 2010, more transactions were using cash than cards. And that flipped in about 2010, and cards now, card payments, tap and go digital wallets, all of those payment methods, considerably outweigh cash. So this trend was happening well, and truly before, COVID just accelerate it. You might recall, you know, merchants didn’t want to take cash because we didn’t know how the virus was being transmitted. And so a lot of people started to bank or make payments differently. And so that meant there were fewer of them going into branches to get cash, which might have been something I did more regularly.
ANDY PARK: The main two arguments against branch closures in my mind have always been about people that aren’t tech literate, perhaps the elderly, and also people from regional Australia, regional towns are particularly affected. Obviously, the bank branch being open is a bit of a tentpole for the local community commerce, an activity with residents now having to consider driving more than more than 100 kilometres to their nearest bank, is that acceptable? And what are the banks doing to kind of retrain customers to be able to use some of these services?
ANNA BLIGH: Well, you’re right, there are more and more of us that are doing our banking online on the phone, and not going into bank branches at all. But that doesn’t mean that they’re not important, or that there aren’t people who really rely on them, or rely on being able to do their banking physically. And for that reason, there’s a total of just over 80, I think it’s 82 financial institutions, including all of our banks, that pay Australia Post to conduct banking services on their behalf. So, you know, there are places in Australia that don’t have a bank branch and don’t have a post office. But they’re very, very few. And most of them would never have had a bank branch if they didn’t have a post office. And so these are really important community service obligations that banks are meeting. There are, and I’m pleased to have a chance to make because I don’t think many people know, the breadth of services that post offices can provide including cash floats, they can take deposits, they can pay cash, they can make withdrawals. And for many people, you know, that is a really important service. And as we go through this massive transition, we’ve got to make sure that people aren’t left behind. And it seems to me that paying Australia posts to do these services is a very efficient and very convenient way of doing it because you think of most towns the post office isn’t that far from where the bank was? Because they’re often in the main street.
And for that reason, there’s a total of just over 80 financial institutions, including all of our banks, that pay Australia Post to conduct banking services on their behalfAnna Bligh, ABA CEO
ANDY PARK: And there is also probably a good argument that I haven’t thought of before that most elderly Australians are pretty familiar with using a post office service in their town, should they have one. So the argument that some parts of the community are being misaligned they may not hold water.
If you just tuned in Anna Bligh from the Australian Banking Association, She’s the Chief Executive Officer. You see, we’re talking about the decline of bricks and mortar bank branches in Australia, apparently it is about 700 Over the last three years, a lot of people on the text line and defending their bank branches and the use of them. This one Lee and Saratoga says, I really care about the bank branch disappearances. They’re also removing ATMs and replacing them with private fee charging machines. Are they not making enough money? They say they don’t care about their elderly or small businesses, that can’t deposit takings. They don’t care about their customers or their public. So why do we bother with the Royal Commission into the banking industry? Lee says it’s shameful. How do you respond to that one?
ANNA BLIGH: I can certainly understand that change is hard. And what is happening at a massive and unprecedented scale in Australia is that customers are changing their habits. And they are doing it in droves, and effectively voting with their feet. I don’t dispute for one minute that there are many people who want to do their banking physically in bricks and mortars, but overwhelmingly, they are a decreasing, and a smaller and smaller group in our community. That’s why banks are still providing face to face services, by paying Australia Post to do those services on their behalf.
ANDY PARK: Can you argue that the average customer who doesn’t use a bank branch is effectively paying for it?
ANNA BLIGH: Well, I’m not sure what you meant by that question Andy
ANDY PARK: Take, for example, myself, I don’t use bank branches much is the cost of my banking got to be built into that that fee that I have to pay on the on the account fee? For example, am I paying for a service that I’m not using?
ANNA BLIGH: Well, no, what I think you’ll find I mean, bank branches make banks very visible. But in fact, what your banking service is now and increasingly, we carry our bank branch in our pocket or our handbag and our mobile phones, and keeping that safe, keeping you know, keeping up with scammers keeping up with hackers providing you and your banking services with the safest possible protections on your money is an enormous investment every year from banks. And so what they do when they when they are closing branches, that’s money that then goes into making sure they’re investing in all of the cyber protections that make internet banking possible. So, you know, once upon a time, it was all very visible, you saw the branch you went in, you saw the cash that was yours. You know, we don’t see cash, we don’t see our transfers. But it’s all happening behind the scenes. And all of those systems have to be paid for, maintained, protected, and continually invested in.
“We carry our bank branch in our pocket or our handbag and our mobile phones, and keeping that safe, keeping up with scammers, keeping up with hackers providing you and your banking services with the safest possible protections on your money is an enormous investment every year from banks”Anna Bligh, ABA CEO
ANDY PARK: You wouldn’t have to pay for cybersecurity. If you had people though. A teller.
ANNA BLIGH: Not when people are overwhelmingly making their payments and transactions. They’re shopping online. And they are paying their bills online. And if people are paying online, banks have an obligation to protect them and keep their money safe and make it work. It’s not just cybersecurity, it’s when you pay your water bill, you want to know when you did that on your laptop that the money goes to the water utility on time, as you would expect. So all of those systems, that’s the normal running of banks now. I mean and one of the you know, one of the interesting facts to me is it illustrates how quickly it’s changing is that Australia’s banks now employ more data analysts more software engineers, more IT specialists than they do tellers and that’s a reflection of just how high tech banking has become as a result of massive innovations that customers actually love. They like being able to do this at home in their pyjamas they don’t have to go down the street. And that’s what banks are responding to, that the expectations are rapidly changing in their customer base without forgoing that face to face for those who want it. It’s just being done through the post office in those places that rather than through a branch.
ANDY PARK: We’ll have to leave it there Anna Bligh, the Chief Executive Officer of the Australian banking
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