28 February 2023
ABA CEO Anna Bligh spoke to Richelle Hunt and Kirsten Diprose on ABC Radio Melbourne
KIRSTEN DIPROSE: Kirsten Diprose joining you from ABC Warrnambool. And there is a Senate inquiry running through until the end of the year looking into regional and rural bank closures after the closure of 100 regional bank branches in September 2022. That hearing will first be held in Sale in Victoria and Gippsland, starting in March. So in just a few days time. The inquiry will look into the economic and the welfare impacts of losing banks in regional Australia and Victoria, as well as the process that banks are following to close these branches, and the reasons that have been given. Anna Bligh is the CEO of the Australian Banking Association – Anna, some people and in particular, the union,are saying that there is no reason given that the bank is simply just putting a notice upon the door, or maybe sending an email to customers, to let them know to notify them of the bank closure. Why are we seeing such a huge number of bank closures across our regions?
ANNA BLIGH: Well, good morning, it’s a pleasure to have an opportunity to join this conversation. And I haven’t been able to listen to everything, but I have been listening over the last 10 or 15 minutes. And, and I think what we’re hearing is just how difficult it is when massive transformational changes occur in our society. Banks are moving the way they provide services to follow their customers. Customers are voting with their feet in literally 1000s of numbers, but there is equally a group of customers for whom it is much harder to make that change. And right now we’re all the whole community in the middle of this transformation. And that doesn’t happen at the same pace for everybody. And I’m not going to tell you that banks have got all of this right by any means. But as more and more customers leap into the virtual banking space, we need to make sure that our banks are putting more and more and more of their resources into keeping those customers safe from frauds and scams and keeping the technology up to date. So there is a real shift happening, and the numbers are staggering.
RICHELLE HUNT: Anna Bligh, you mentioned that there is you know, this shift happening, and that there are some customers that are taking longer, but that we also know that there are some customers and customers that just really are never going to be able to make that change, you know, people who might have disabilities. There are always going to be a section of community who need that face to face support. And part of that has always been provided and been within those banks four walls and part of the community.
“I think it’s important to be very clear that Australian banks actually pay the post office for these services”Anna Bligh, ABA CEO
ANNA BLIGH: Absolutely. And I think there is a responsibility on banks to do what they can to bring as many people and give them the opportunity to enjoy the convenience of the new way of banking. But there’s also a responsibility to do what they can to make sure people aren’t left behind. And you’ve talked a lot about the post office. I think it’s important to be very clear that Australian banks actually pay the post office for these services. And many of those franchisees in those small towns would find it very hard to be keeping their head above water without some of the funds that go into them from the very significant contribution financially some are making. So, the bank branch might be gone, but the bank services haven’t all disappeared.
KIRSTEN DIPROSE: There would be a lot that wouldn’t give that a thought Anna Bligh, and I find it hard to believe that when we’re hearing from just small country towns and suburban Melbourne, when a bank shuts down, and that teller is lost, so that bank manager has gone that that’s because the focus and the shift of that bank is looking into fraud, or is looking into cybercrime for us. I mean, these are bank tellers, these are people that aren’t then going to go and be redeployed into the area of fraud. And yes, we need to invest resources and money and put our focus into that part of banking. But in some of these towns, people are having to drive 40-50 minutes just to get to a bank. I mean, surely it just makes more sense to keep a bank open in that area?
ANNA BLIGH: Well, as I said, what we’re seeing is massive, massive drop offs of foot traffic in branches. So, you know, if I give you an example of a branch that’s recently closed in the Sale region, which is where the Senate Inquiry will have their first committee meeting, between 2020 and 2022, so it’s just in two years, there was an 88% drop in the number of cash withdrawals made at that branch, and there was an 89% drop in cash deposits. So they’re down to having things like 328 cash deposits a year, it’s less, it’s almost less than one and a half, probably a day. So, I do think that there’s a real question here about when I do think banks have an obligation to explain why that’s happening. And one of the decisions of the previous governments Regional Banking Taskforce was that banks should have a statement of reason that they display and that they make publicly available. All banks will be doing that, but just looking at a template now that will make it consistent.
“in two years, there was an 88% drop in the number of cash withdrawals made at that branch, and there was an 89% drop in cash deposits”Anna Bligh, ABA CEO
RICHELLE HUNT: So if that’s a template, though, that’s not going to give individual reasons to individual communities as to why that bank is shutting down.
ANNA BLIGH: Yes, it will. It will be a template that says, whether it’s Commbank or NAB, or ANZ, you’ll get the same information
RICHELLE HUNT: Will people have, do you expect out of this Senate Inquiry for a community, as Kirsten said earlier to her, one of her local towns, and we’ve seen this time and time again, people literally picketing right to save their local bank, that’s how much they need it. Will there do you think at the end of this inquiry, will there be any opportunity for locals to dispute a bank closing down, the bank will have to tick a certain amount of boxes to prove why they’re shutting down a bank and how it will or will not affect that community. And if at the end, all those ticks and checks and balances aren’t in place, that that bank will have to stay open?
ANNA BLIGH: I think it’s just too early to preempt the inquiry, they haven’t even had their first meeting yet. I don’t think anybody is under any illusions that for many communities, it is hard, they don’t like losing their bank branch, no one’s going to sit here and say, it’s a good thing. But what I can say is, it’s really important for people to understand the breadth of services that Australia Post is offering the breadth of services that are available for people to do over the phone. And many of the services that are 98%, a figure that Australia Post gives us is that 98% of the services that you would find people go in a branch, they are doing in the post office. So there are some services and you’re right, 2% of them, that can’t be done in the post office. But some of those are getting a mortgage that can be done over the phone.
RICHELLE HUNT: I don’t think a lot of people want to get a mortgage over the phone. It’s a big thing.
ANNA BLIGH: I can tell you 60% of people are doing it over Zoom. So you know, we’ve got options.
RICHELLE HUNT: But that’s a sad state of affairs, isn’t it? If we’re getting mortgages [via Zoom], because you need that personal service? This is a huge life investment.
ANNA BLIGH: It is personal.
RICHELLE HUNT: I think a lot of people disagree with you.
ANNA BLIGH: If you have it over video conference, because 60% of people are doing it. That’s not a disagreement.
RICHELLE HUNT: That’s not because they wanted to just because I have no choice, I would say.
ANNA BLIGH: no, this is people who are busy at work, they want to do it after working hours with their partner in the lounge room in the middle of Sydney. It’s not regional.
RICHELLE HUNT: When it comes to a big investment, I think most people can agree that you want that regular person that you can talk to that you can chat to again in a couple of months. But Anna I wanted to ask you about balancing…
ANNA BLIGH: I should just say you’re absolutely right. All our research says the time that people most want a person, whether it’s on a video conference, or in person is when they make those big life decisions. But they might be making them three or four times in their life. Most people aren’t getting a mortgage at their local branch every week.
RICHELLE HUNT: That’s because they can’t, because the local branches… anyway, let’s move on.
ANNA BLIGH: Hang on… you didn’t get a mortgage every week at your branch
RICHELLE HUNT: I know. But that’s why you want that face to face service. You know, like, that’s why you want to know that someone’s holding your hand and helping you and there’s recourse when you have that relationship with someone. Look, Anna Bligh, who’s the CEO of the Australian Banking Association. You know, I think you’ve you’ve really been outlining the economic imperatives of banks, banks and businesses, and we understand that they have shareholders would, banks be open to and perhaps this could be raised, perhaps at the Senate Inquiry. But would banks be open to a sort of legislative requirement, about servicing certain areas, whether it’s rural areas, a particular radius or, or suburbs with higher levels of disadvantage? That sort of bricks and mortar service that we’re talking about? Would there be an opening for government intervention or legislation in this space?
ANNA BLIGH: Well, there’s always the possibility for governments to legislate. But I would just point out that banks fund bricks and mortar post offices to provide these services. If they were required by legislation to keep branches open that people weren’t using, it would become very difficult for them to keep funding the Post Office, in these little towns where people are in their droves, changing the way they bank so there’d be consequences that would have to be thought through and looked at. But I think banks are going into this inquiry with an open mind. They do want to be heard on the investment they’re making in Australia Post because their branch might leave town, but they’re paying for the services to stay. They are making massive investments in keeping customers safe and the online environment. And nobody’s suggesting that a teller is going to become a technology expert. It’s not a direct swap, but banks are now spending eight times as much on technology and safety than they are on bricks and mortar. But they’re going in with an open mind and then we’d hope that the senators have an open mind to really understanding what’s happening in banking, how the overwhelming majority of customers are shifting very quickly. And it’s interesting, Australia, we are very early adopters of financial technology, we’re the third in the world. So it’s happening at a pace that I think it’s very hard for people and if there are better ways of doing it, then I think our banks will be very open minded to listening. But they would like to be listened to as well.
RICHELLE HUNT: What about customer service over the phone? We hear a lot of people have rung up and said, I don’t like waiting an hour on the line for something, i’m nervous with the credit card and having to do that over the phone. If the direction and it seems to be is that kind of over the phone banking? Are there improvements in making sure that, we speak to the appropriate person quickly who can actually help us with our enquiry?
ANNA BLIGH: Well, potentially. We’ve actually, interestingly seen an increase in people ringing call centres to do some of the basic banking services. There was an increase during COVID because people couldn’t leave their houses and they couldn’t get to their branches. And some of that increase is actually held beyond COVID. So people who learned how to do some of the basic banking services on the telephone, I’m sure call centres too, have kept doing their banking that way. So it’s not everybody shifting rapidly to apps and Apple wallets. It’s also people doing things by phone, which suits them sometimes and other times they’re going to the branch.
RICHELLE HUNT: I guess what one person saying though, is will the service improve?
ANNA BLIGH: I think you’ll see constant improvements, as more and more people are choosing these different options. It’s straddling the transformation that is causing some of the tension. I would say to those people, I’m not sure what services they were looking for on the phone. But, one of the things I would say is, if you really want to do it face to face, go to your local post office, these are people who get training in what they do, they know their community, they’re being funded to do it. Now, that doesn’t mean that every post office is perfect. They’re only human and no one would tell you that bank branches were perfect.
RICHELLE HUNT: It’s the same problem in regional areas though, rural areas like the the Aus Post in the corner of the Roadhouse is only open one or two days can only do basic services, you still have to travel in to a big town to do it, which is the same problem that we’re facing now.
And the idea of, if you need to see your local bank, then go to your local post office. I mean, that sentence within itself doesn’t seem to make a lot of sense to me. Anna we’re out of time, but we thank you for your time and to give us some of your insights into what you think will happen out of this Senate inquiry. It is going all the way through to December. So hopefully a lot of the questions and we have a full board of calls and I cannot keep up with the texts at the moment that are wanting some answers to this, but thanks for answering some of them for us today.
ANNA BLIGH: Thank you
RICHELLE HUNT: Anna Bligh, the CEO of Banking Association of Australia
Hamish MacDonald: A Senate inquiry is examining a wave of bank closures that have hit regional Australia particularly hard. More than 1600 bank branches have closed nationally in the past six years, including 309 in the last financial year. Like post offices and milk bars, bank branches form part of the architecture of regional communities… Read more »
New laws banning the use of credit cards for online gambling are one step closer with the introduction of the Federal Government’s Interactive Gambling Act 2001 Bill to Parliament. The Australian Banking Association (ABA) has welcomed this milestone saying the new laws will make it illegal for an online gambling company to accept a credit… Read more »
The Australian Banking Association (ABA) has welcomed the introduction of new legislation to boost the security of identity verification services.