Three quarters of Australians still want physical bank branches

Three quarters of Aussies still want a physical branch they can walk into — even though 99 per cent of all banking is now done online.

Nearly three quarters of Australians say they still want a physical bank branch they can walk into — even though nearly 99 per cent of all interactions with customers are now online.

According to the Finance Sector Union, more than 1600 bank branches across the country have closed between June 2017 and June 2022, with a disproportionate number in regional areas.

A new survey of 1100 Australians by comparison website Finder found 73 per cent believe it’s important to have a physical branch.

Forty-three per cent said they like to be able to talk to someone face-to-face, while 30 per cent admitted they merely felt better having the option.

Eighteen per cent said they didn’t need one as long as there was online or phone support, while 9 per cent said they don’t go to the branch anyway.

Fifty-five per cent had been to a physical branch in the last six months, while one in four Aussies have not set foot in a bank in more than a year.

Finder money expert Alison Banney said the results showed Australians were not ready to go fully digital, despite the push from the banking industry.

“From scams to financial hardship there are still many money matters that customers would rather discuss in person,” she said. “While most banking is done digitally these days, there are many instances where customers would rather do so face-to-face.”

Unsurprisingly, access to a bank branch was more important to older Australians, with 82 per cent of Baby Boomers preferring to go into a branch if they have an issue, compared to 69 per cent of Gen Y.

People still want physical bank branches. Picture: Damian Shaw/NCA NewsWire

“Aussies are accustomed to using electronic banking such as direct debit and tap and go and in many ways it’s faster and more convenient,” Ms Banney said.

“But mostly everyone can relate to the frustration of having to wait for an extended time on hold or the frustration of messages becoming lost in translation with instant online messaging services. The number of bricks-and-mortar branches will continue to shrink, so compare which banks match your requirements and vote with your wallet.”

A Senate committee investigating regional bank closures held its first hearing in March in Sale, Victoria, with two more hearings last month in the Queensland towns of Cloncurry and Ingham.

The next hearings are scheduled for August in the Western Australian towns of Carnamah and Beverley.

It comes as new rules are being imposed on banks amid the accelerating branch closures.

The Australian Banking Association’s (ABA) new Branch Closure Support Protocol will be in force from July 1.

According to the ABA, just under 99 per cent of all customer interactions with banks now occur digitally.

The protocol will govern the steps banks must follow when closing branches, such as providing customer support when the closest branch is at least 10km away, half the current threshold of 20km.

One in four haven’t set foot in a bank in more than a year. Picture: Asanka Ratnayake/Getty Images

More than 20 banks are signed up to the Protocol, including the big four, Bank of Queensland and Bendigo Bank.

Notably, there are no requirements to consult the community prior to a closure nor to raise the threshold for when a branch can be closed.

ABA chief executive Anna Bligh said branch usage has been in “sharp decline for many years”.

“While overall customer preferences have shifted to digital, Australian banks know that some will need greater assistance during this transition,” she said.

At the committee’s first hearing in March the FSU accused banks of closing branches, particularly those in regional areas, to suit their own business models.

The union rejected suggestions put forward by the banks that customer preferences for digital banking were driving the closures, arguing there are many Australians who are unable to transition to online banking.

The union said those with disabilities, low digital literacy and the elderly would be disproportionately impacted, as would small business customers and Indigenous customers in remote communities.

The Protocol’s new Customer Care Standard, announced on Friday, will require banks to offer education and assistance to customers of a closing branch to transition to other banking options.

Banks will also have to provide language support where appropriate and provide additional assistance to vulnerable customers, such as older Australians and those with disabilities.

Key local stakeholders such as local government and community representatives must also be notified of closures while support obligations will no longer be limited to regional branches.

— with NCA NewsWire

Originally published as Three quarters of Australians still want physical bank branches