Yahoo Lifestyle Westpac's major move on branches as regional Aussies suffer with bank and ATM closures
One of Australia's biggest banks has committed $150 million to extend its moratorium on regional branch closures to protect vulnerable Aussies.
Westpac will not close any more branches in regional Australia until at least 2027. The 'big four' bank announced on Wednesday it had decided to extend a moratorium on branch closures to protect customers struggling with access to their money outside capital cities.
The major banks have been under fire after closing hundreds of branches across Australia in the last few years as customers lean toward digital payments and conduct a lot of their banking needs online. Yahoo Finance has reported on the struggle of those feeling a sense of "impending doom" as their access to cash becomes more limited.
Westpac's chief executive of consumer operations Jason Yetton said the bank - the third largest in Australia - would invest $150 million to ensure customers and employees in 182 regional areas were supported.
Have you been affected by bank branch closures? Email stew.perrie@yahooinc.com
“This announcement gives certainty to our people, to our customers, and to these communities that we’ll be there to continue to provide banking services,” Yetton said.
The bank admitted regional and rural customers have "unique challenges" like limited internet connectivity and long travel times to reach their nearest branch.
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Part of its multi-million dollar investment will be used to educate customers on how to transition to digital banking to ensure they're not caught out by branch closures in the future.
Challenges regional Australians face in march to cashless society
As branches close, ATMs are removed and services like Australia Post and supermarkets face unprecedented pressure to support regional Australia's cash access, sometimes entire towns face hours-long drives to withdraw money.
Lyn Potter has watched all the banks pull out of her area just outside of Perth and told Yahoo Finance how incredibly frustrating it is.
"My main concern is not for ourselves, but for our seniors, for whom it can be very difficult to adapt to the new technological ways, physically move around, drive or travel large distances."
On the other side of the country, Jan Harman said there's no ATMs or banks in the regional South Australian town of Kapunda.
She said cash is vital to her day-to-day life and has to drive at least 30 minutes to get money from IGA, but is often refused.
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A total of 424 bank branches - or 11 per cent of Australia’s overall branches - closed in the 12 months to June 2023, according to APRA data. This included 122 branches located in regional and remote areas.
A further 718 ATMs were closed or removed during this time.
What is being done about regional bank closures in Australia?
Westpac said customers who have been affected by branch closures in the past can rely on Australia Post for some banking needs like making deposits, withdrawing cash, paying bills and checking balances.
“We can’t be everywhere, we’re not everywhere, but Australia Post is and they enable our customers to do what they might otherwise do in a branch,” Yetton said.
But Australia Post has admitted the burden of supporting the use of cash in regional areas is too much.
Australia Post CEO Paul Graham complained about transporting it “on our dime” and no wonder, just supporting Coober Pedy costs $4,000 a week, or $208,000 a year.
Plus, you'd have to be banking with one of the financial institutions that Australia Post works with.
Hareth Tayem was shocked to learn he could no longer use Australia Post's services when a $50 cash withdrawal was denied. His bank, HSBC, ended its arrangement with Australia Post. So has ANZ.
“I went to put my card in that I normally use to withdraw some cash and it said, ‘Card not recognised’,” he told Yahoo Finance.
How are Australia's major banks dealing with drop in cash use?
The big four banks committed to leaving regional branches until an inquiry into regional closures ended.
ANZ and NAB have not extended a commitment to keeping regional banks open.
Like Westpac, the Commonwealth Bank of Australia (CBA) extended its moratorium until at least the end of 2026.
“We have deliberately chosen to maintain the largest branch and ATM network in the country and are actively working with community leaders across regional Australia to refine how we better support local residents and businesses," a CBA spokesperson told Yahoo Finance.
But it also owns Bankwest, which has moved to close all branches and become a solely digital bank.
Similarly, Australia's fifth largest bank, Macquarie Bank has announced it will phase cash and cheques out from 2024, scrapping over-the-counter cash transactions.
Last year, Westpac backflipped on a plan to close several branches in regional Australia due to community backlash.
There were four branches in Queensland, two in Victoria, one in Western Australia and one in South Australia, that were all saved from closure.
Experts have said there needs to be more investment in transitioning more vulnerable members of the community toward digital banking, particularly as the cost of handling cash continues to rise.
The Senate will hand down its final report on regional branch closures on May 16.
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