A SENIOR research fellow in the School of Media and Communications at RMIT has said upon the release of a report on the Senate Inquiry into Bank Closures in Regional Australia, that there were no real surprises - it has an inherently negative impact on regional, remote and vulnerable communities.

Dr Daniel Featherstone has undertaken research into the digital divide in rural, regional, remote and Indigenous communities, and the impact the bank closures had on vulnerable communities.

The report stated that the Australian Prudential Regulation Authority said that over 2100 bank branches closed in the last six years, from 2017 to 2023, equating to a reduction of almost 40 per cent of branches in metropolitan areas, and 35 per cent of branches in regional Australia.

In addition to branch closures, there has been a reduction in the provision of automatic teller machines (ATMs) of 60 per cent, including the loss of half of the ATMs in regional and remote areas.

Dr Featherstone’s findings concurred with the report that said issues with using or transferring to digital banking services was a recurring subject in evidence received by the committee.

As banking services increasingly move to digital platforms, issues of connectivity, digital literacy, and fraud awareness became more prominent.

He lamented that there were a number of ways closures had impacted regional and remote communities - especially those with an older age demographic who were forced to find other means to do their banking including travelling further or going online.

“The closure of banks means people are forced to go online and for the 55-64-year-olds the digital literacy is particularly very low,” Dr Featherstone said.

“It reduces some agency people have in doing their own banking and means they’re reliant on someone else to do it for them.

“And where there are less reliable communications, often their transactions are no longer private because it is undertaken through someone else.

“Older people still want to use their passbooks because that’s what they’re comfortable doing – that way they know how much money they’ve got in their bank account.”

Dr Featherstone said there was a trend in lack of trust in online banking in certain cohorts of the community.

“Older people often don’t trust digital services and don’t feel it’s safe and using online services reduces the trust they have in financial management.

“The other challenge is they’ve built relationships with their bank and so when they’re wanting to discuss loans, or wills or what’s going to happen with their estate, these are all sorts of factors that impact our elderly in particular.

“And what we see in remote communities is there is actually a lot of elder fraud.

“Young people in the family have access to perhaps grandparents or parents bank accounts and this can result in people taking funds.

“That reliance on a family member reduces their agency and can result in elder abuse - there’s quite a high incidence of that in remote communities.”

Dr Featherstone said while the economics of banks struggling to maintain a service when they say that over 90 per cent are using online banking was understood, the cost of going to a bank is going to disproportionately impact those in regional communities compared to their city counterparts due to the cost of travel.

He said for more complex transactions that can’t be undertaken at a post office agent, it often meant those in regional or rural communities had to travel hundreds of kilometres to do their banking.

And for First Nations people, that disparity increased the more remote they were.

Among the eight recommendations of the report, the first stated that the Australian Government adopt a policy recognising access to financial services as an essential service. To this end, it should commit to guaranteeing reasonable access to cash and financial services for all Australians.

Four coalition senators; Canavan, Fletcher, Brockman, and Rennick released a statement and said the report called for a rebuild of financial services in the bush.

They supported the report’s recommendation of investment in the financial services available in rural and regional Australia to make up for the loss of services from bank closures in recent years.

Regional and Rural Affairs and Transport Committee chair, Senator Matthew Canavan, said, the major banks had treated rural Australia with contempt in recent years.

“Not only have they left many communities high and dry, the banks had barely paid ‘lip service’ to the previous commitments they made to do things better” he said.

“The major banks have not acted in good faith on the closure of branches in regional towns.

“There now needs to be a stricter and more proactive approach to rebuild financial services in the bush.”

The report can be viewed at bit.ly/44WeR4J