Find out more about the future of banking in Australia.
4 November 2022
ABC Radio Adelaide interview on Wednesday 2 November 2022.
ABA CEO Anna Bligh appeared on ABC Radio Adelaide Afternoons program and was interviewed by host Caroline Winter. Topics covered included the changing nature of banking, access to bank branches and ATMs, and how banks and Australia Post are working together to continue to provide service to bank customers who still need face-to-face banking.
Caroline Winter: Well, do you remember the time when you’d pop into the bank or swing by an ATM to pull out some cash for the week? Feels a bit like those days are long gone with so many of us paying for things using cards or phones, or even watches and definitely paying online. But the move to cashless of course isn’t for everyone, though, it seems there’s fewer options than ever to get money out of your account. Are you one of those? Have you noticed that ATMs have been disappearing near you? And you’re wondering, will there be any left? 1300 222 891 or 0467 922 891. Love to hear your thoughts on this. Anna Bligh is CEO of the Australian Banking Association. And she joins us now. Hi, Anna.
Anna Bligh: Good afternoon. How are you?
Caroline Winter: Well, thank you. I guess, why? Why are ATMs disappearing? And I guess why are the few bank branches that seem to be left continuing to close?
Anna Bligh: Look, it’s a really good question. And the simple answer is that the way that Australians are doing their banking, the way they are paying for goods and services, and the way that they are moving money around, is radically changing. And it’s happening at an unprecedented speed. We are well and truly on the way to something close to cashless-ness. As you said in your introduction, for many people, they’ll be struggling to remember the last time they carried a lot of cash in their pocket. Yesterday, Melbourne Cup, there might have been an exception as people paid cash for Office sweeps. But in fact, most of us are now overwhelmingly using cards, or doing online transactions, whether that’s for groceries, clothes, buying tickets, you name it. And what that means is we’re in this very kind of difficult, awkward middle period where we’ve got a big change happening, people are overwhelmingly jumping in to all the convenience of the new world of banking. But there are still many people for whom that’s hard. Either they live in such remote parts of Australia, they don’t have access to internet, or they don’t feel comfortable in an online environment. This all got accelerated even further during COVID. And many of your listeners may remember that, for very understandable good reasons, many businesses and small businesses started saying we don’t accept cash, because they were worried that that might be spreading the disease. And many of them that did that have really not gone back to accepting cash. So even the way that merchants behave is beginning to change.
Caroline Winter: You make some really, really good points there, I’d like to pick up on one which has already started coming through on the text line. I guess that this is in response to people’s habits and paying online using tap and go that kind of thing. Online Banking, obviously very convenient. It’s something that many of us are delighting, in fact, rather than having to go to an ATM, or to a bank branch. But for those who don’t have that choice, or aren’t confident, or as you say, are in a remote or a rural area, what does it mean for them?
Anna Bligh: And that is one of the big challenges facing Australia’s banks. How do we make sure that as more and more and more Australians every single day, jump into that online environment? How do we make sure we put in all the resources that we need to into keeping them safe in that cyber space, keeping them safe from scams safe from hacking, and putting in place increasing investment in those online systems? But how do we also make sure that for those people who aren’t able to do that, that we don’t leave them behind, which is one of the reasons why more than 80 Australian financial institutions including banks, pay Australia Post to provide basic banking services. And I know that you know, in the Fulham Gardens shopping centre that I know you were talking about last week, there is a large Australia Post branch, they do all the sorts of things that you would normally do in a branch bank branch, so you can withdraw cash, you can get a cash float, you know, for either a business or a community event. You can deposit cash, you can cash a cheque all of those, you can get your balance those things that you would normally be doing in the branch or on an ATM. There are many, many banks that are running courses for their customers. There are customers who aren’t yet comfortable but want to be in that new world. And there are some that we know are unlikely to be there ever. And that’s why they’re looking at banks and financial institutions actually pay Australia Post to keep those services they’re in town. Of course when it comes to cash and people can still get cash out through EFTPOS at major retail outlets like supermarkets. It used to be very common. I don’t know, if you remember, you’d pay for your groceries and they’d say, “Cash out?”. They might not say that quite as much anymore because people don’t seem to want it as much. But they can still do that. So that’s something for customers to keep in mind if you’re buying something at the supermarket, and you’d like have a bit of cash, they can still do that.
Caroline Winter: I’m speaking with Anna Bligh, who’s CEO of the Australian Banking Association, and we’re talking about the closure of ATMs. A move towards a cashless society. Love to hear your thoughts. 1300 222 891 is the number to call. Jenny’s done just that from [inaudible]. Hi, Jenny?
Caller: Hi. My question is we’re losing our branch in February or something at the bank. And I sort of spent a lot of time on the Eyre Peninsula and the bank was downsized there. And you talk to the staff and they’ve got plenty of work to do. So I wonder why they’re centralising everything, when there’s actually there’s people there who are working. I mean, I could understand if they close the branch and nobody had anything to do. But when they’re working and they’re busy, and this day of telecommunications, they could outsource business from anywhere. Why aren’t they bothering?
Caroline Winter: Thanks for the question. Anna Bligh, I might put that one to you.
Anna Bligh: Thanks. And I’m really pleased to be able to answer Jenny. In many cases, I’ll be honest, it’s probably not possible in every single case. But overwhelmingly, banks are able to maintain employment for staff where they have closed branches. Increasingly, it’s interesting, while people aren’t going to their branch in anything like the numbers they used to, and they’re not using ATMs in anything like the numbers they used to, they are actually using the telephone more, they are ringing their bank, ringing their call centres. And there is a demand for more call centre staff and more staff at the end of the telephone. Banks have all invested in the kind of technology that allows you to be part of a call centre from your own home. So many staff are actually still being employed in their local town. But they’re more likely to be working from home. There are some branches now that open in the morning, but in the afternoon, staff all go on to telephone working, and talking to customers from all over Australia, who want to do anything as simple as change their address, to reporting a scam. So you know that banking is changing. Some of it, as I said earlier, is really jumping into the online world. But there are things people still want to talk to someone about. And most banks have increased the number of telephone staff that they have. And that was something we also saw accelerate during COVID. So in many, many, cases, many of those staff are actually working — continuing to work for their bank. But they may not be a branch that you see them in.
Caroline Winter: Well, thank you for that one. Loads of questions and comments coming through on the text line. Certainly some concerns that post offices and supermarkets are not necessarily available later in the day in some areas. And so I guess you’re left out there of paying with cash. Someone else saying, you know, often when you go out for dinner with friends that the only way to really split the bill is by using cash. I know I’ve been caught out a few times that way. And another one, which is a question, I’m wondering whether there’s an answer that we might see this less in the future. But if we’re forced to be paying cashless, whether it’s pay wave or with our card, there’s often a surcharge that comes with that. So something that otherwise would have cost us the exact amount by paying with cash is costing us more. Anna Bligh, is there any moves to try and clamp down on that? If we if we literally have to pay via cashless?
Anna Bligh: That’s really a question for merchants. They make a decision on whether or not they’re going to charge their customers when they use a card. But it’s certainly something that I’ve seen less and less and less of. I think most merchants realise that with more customers paying with a card, their competitors are dropping surcharges, and they’re going to have to do the same. But you know, these are things that as we change the system, we’re going to see, no doubt, more regulators and others looking at how those charges are made. You know, we are in the middle, as I said right at the beginning, Caroline, of a very, very radical shift. And those shifts are never easy, you know, for all of us. On the one hand, overwhelmingly people love the convenience. To pay their bills on the weekend, from the comfort of their back veranda. They don’t have to rush to the bank before it closes at three o’clock on a Friday afternoon, like we all did once. They can send money to their kids without having to wait for a check to cash. And all of that makes life simpler. And in many cases, you know, much more certain. But change is hard. And as I said banks have an obligation to be keeping their customers safe wherever they choose to bank. And we need our banks more than ever to be investing money into the safety and security of the online environment where most of their customers choose to bank. And making sure that if they’ve got money tied up in branches that hardly anybody’s using, putting that money to better purpose, keeping customers as safe as they can.
Caroline Winter: I’m speaking with Anna Bligh, from the Australian Banking Association, about all things banking. Tina from Adelaide has called in with a comment to make. Hi, Tina.
Caller: Hello, I just wanted to say that I am 74 soon, but I will not use internet banking. And I’ve always been very worried about being scammed or, or somebody hacking into it. And that’s why I’ve always refused. I go to the bank, and I’ll pay into other people’s accounts. But I will not get internet banking. And then lo and behold, I was involved with the Optus thing. And so they’ve got less information on me than they would have a lot of other people. And I’m so grateful that I didn’t do internet banking.
Caroline Winter: Tina, thank you for that. Anna Bligh, I’m sure that’s something I’m sure you’re hearing more of. Obviously, the last few weeks in particular have been particularly sensitive around privacy and cybersecurity there.
Anna Bligh: That’s true. And that’s why we’ve got to see all of corporate Australia and the government putting substantial resources into the safety and security of the systems that people are using and choosing to use in increasing numbers every day. But I can certainly understand customers who want to make a different choice. And that’s why banks continue to invest substantial, millions of dollars, into Australia Post to ensure that face to face banking, for those who want it, is there in those towns. And that’s why many large merchants like supermarkets still offer the opportunity to get cash out when you’re making a purchase. As we experience this change, who knows Caroline… I will try and look 10 or 20 years forward. And it’s impossible to think about what banking might look like. I now pay for things using my mobile phone. Three years ago, I didn’t even know that was possible. Now it accounts for more than 90% of how I pay for things. So who knows what it’s going to look like in three to five years time. But I think we can probably all see a time where not many of us are going to be using very much cash very often.
Caroline Winter: I think you’re right. I mean, the writing is on the wall for sure. But surely, because we’re relying on technology. And we know that technology is fallible, it means if something goes wrong, or something goes down, or someone’s hacked, and you can’t use cashless, shouldn’t we always have the ability to pay with cash?
Anna Bligh: Certainly people should continue to have access to cash. I’m not sure there’s any legal requirement that says that a shop owner can’t say that they don’t take cash. I mean, there are so many of the shop owners, you know, in my local suburbs that don’t take cash. I’m sure it must be legal. But from a bank’s point of view, you know, banks really do understand how important cash is. And they do invest a lot. Not only in ATMs. While they certainly reduction, banks are not, you know, moving out. I mean, there’s certainly there are going to continue to be a strong branch network, strong access to ATMs for I think a very long time. But it’s going to, over time, be a bigger mix of other outlets, like Australia Post, like supermarkets for cash. And at the same time, we’re going to see, as I said, every single day more people wanting the convenience, the speed, and the ease of banking, not using cash, paying for things with their phone or their, their tap and go card. This is a new world. And as I said, changing is never easy. But banks have a real obligation, I think when the majority of their customers are in those online spaces to make sure they’re investing everything they can to keep those spaces as safe as they reasonably can.
Caroline Winter: Lyle from Nova Gardens has called in. Lyle, hello.
Caller: Hello, how are you?
Caroline Winter: Well, well, what’s your comment around this?
Caller: Fortunately, I’m okay, I’m in my 80s and I’ve got a lot of friends in their 80s. And most of them are females and because they can’t use this plastic card business. And they’re not computer savvy. They’ve got to carry around. And I know one lady carries around about $1,000 in her bag. Well, you know, all the branches are closed in our area. When she’s got to go and pay a bill, she goes down all the way to another suburb to get the cash out so that she can pay her bills. And it’s so inconvenient. God only knows how these elderly people without a motorcar get on. Because in the outer northern suburbs, they’re closing branches left, right and centre. And I know why the banks are doing it, because of the bloody shareholders. You know, it’s ridiculous. They’re making a fortune, and they don’t give us stuff about senior citizens. They don’t know how to use this newfangled stuff.
Caroline Winter: Lyle, thank you for those comments. Certainly some of those coming through on the text line as well. Anna Bligh, I’m sure that that’s something you hear frequently in terms of, you know, by going cashless, and closing branches, and ATMs for you know, maintenance, upkeep and salaries, etc, that this is all just about saving money.
Anna Bligh: Well, I thank Lyle for his comments. Do Australian banks make a healthy profit? Yes, they do. And we should all be very grateful for that, because it was what provided the economy with the buffer it needed during COVID. For us to be able to survive as an economy in the face of a global pandemic. The other thing about bank profits, which I think is important to remember is that if you’re a working Australian, some of the biggest shareholders in Australia’s banks are our superannuation funds. So we shouldn’t wish away those profits too easily, because they’re going into the retirement incomes of every working Australian. But banks do have to get the balance right between the profits they make for their shareholders, and through those shareholders, the broader community, and the money that they spend keeping their customers and their customers money safe. You know, since the beginning of time or the beginning of banks, one of the biggest responsibilities has been to keep the money safe. Once upon a time, banks spent a lot of money building big cast iron vaults. And, you know, having big, imposing concrete buildings that kept bank robbers out. And that presented its own dangers, you know, once upon a time being on the front line of a bank could be a very dangerous occupation. And is the same way as Lyle indicated, carrying a lot of cash around in your wallet is not necessarily the safest thing to do for some people. So you know, getting the balance right about what’s safe. How do we invest in the new systems to make sure that, you know, the majority of customers are as safe as they can be. You know, not with all the money in the world, but it wasn’t no such there was never a time in traditional banking where some robbers couldn’t get through. They would come in with sawn off shotguns and marks and terrorise people, putting people at risk committing serious acts of violence and stealing the money. For a long time since I’ve heard of that happening these days, they’re doing it, you know, they’re hacking on a computer in a garage somewhere, possibly in another country. So those sorts of resources still have to be invested by banks to keep money safe. And it’s interesting, I think there probably was a time for some banks, maybe in the 1980s and 90s, where bank closures or branch closures were a feature of declining populations in some centres. The overwhelming majority, more than three quarters of the branches that have closed in the last 12 months have been in capital cities and major regional centres. These are areas of population growth. And what that tells me is this really is about customer behaviour, changing and probably changing forever. People who are using tap and go or a digital wallet, they’re not going back to what they used to do.
Caroline Winter: It’s a very controversial issue because as you say, we’re in the middle of it all. We appreciate your time and for answering some of the questions today though.
Anna Bligh: Great, thank you.
Australian banks today launched a new digital platform that will facilitate the quick reporting of fraudulent payments en route or transferred to another bank.
“Speed is the essence when it comes to getting your money back from a scammer. Even if you’re not sure, even if you just suspect something’s not right, ring your bank as fast as you possibly can.”
The nation’s shift to digital banking is gathering pace, with the number of people leaving home without their wallet or cards, relying on their phone or another device instead, doubling in three years. The rapid changes are captured in a new ABA interactive Spend the Day site.