Banks' disconnect from regional Australia never more obvious
Updated: May 12
ABOVE: Anna Bligh talks banking taskforce in Canberra on Wednesday. Vision: APH
THE chief executive of the Australian Banking Association Anna Bligh did not read a single submission to the 2021-2022 Regional Banking Taskforce she was a member of.
This astonishing disclosure came out under questioning during a hearing of the Senate inquiry into regional bank closures at Parliament House in Canberra last week.
The Australian Banking Association (ABA) was listed as a member of the taskforce when it was announced by senators Bridget McKenzie and Perin Davey on October 22, 2021, and Ms Bligh confirmed on Wednesday she was the association’s representative and attended meetings.
However, when asked by Senator Linda White if she had considered the “400-odd” submissions that came into the inquiry and discussed what they said with other members of the taskforce she replied: “No, I was not a member of the taskforce in that sense”.
The exchange between the two women was only brief but it speaks volumes about how the Regional Banking Taskforce came to give the green light to branch closures that resulted in nearly 100 banks being lost in as many days after its final report was released in September last year.
This landslide of closures was the trigger for the senate inquiry that is now underway.
The Canberra hearing saw the chief executives of the big four banks give evidence to an inquiry into regional bank closures for the first time in more than 20 years.
All of these banks – ANZ, the Commonwealth, NAB and Westpac – had also been given seats on the Regional Banking Taskforce but from the evidence that was given, they also appear to have spent no time reading the submissions individuals, community groups and government organisations had invested so much time and hope in.
Little understanding of what is actually happening on the ground in regional Australia was displayed.
At times, this clearly irritated the senators who have been working on this inquiry since March and are clearly hitting their strides in understanding the issues.
They strongly tackled the executives – and Ms Bligh – on the accuracy of their claims, which some handled better than others.
The Commonwealth Bank’s Matt Comyn was the first to come before the senators and except for dropping the information that CBA will be making its Bankwest brand an entirely digital service he might have snuck through without a mention here.
Considering Bankwest was started by the West Australian government to service farmers and many of its branches are located in some of the most digitally excluded regions in Australia, it is surprising this did not come under more scrutiny.
The news will certainly come as a shock to customers as it was not even flagged by Bankwest representatives when they gave evidence last month at the Beverley hearing.
ABOVE: Bye bye Bankwest branches. Vision: APH
Peter King from Westpac was up next and Senator Gerard Rennick was in no mood to muck around with pleasantries. He wanted to know if Westpac was closing branches that were still profitable.
After a long-winded answer it appears that Westpac is still making good money out of the regions those branches are located in.
Given the number of submissions to this and the previous inquiry that referenced inadequacies of banking services at post offices, it was disappointing to hear Mr King and his offsider Ross Miller falling back on a statistic to get out of questions about Bank@post not being equivalent to a bank branch.
These senators have eight hearings under their belts now and at every single one of them they have heard over and over again about the many banking tasks that can’t be done at a post office, so sorry boys, it doesn’t matter how you spin it, the jig is up.
ABOVE: Only eight of the 48 Westpac Coober Pedy services can be done at a post office. Vision: APH
The appearance of National Australia Bank (NAB) chief executive Ross McEwan was the one everyone was waiting for.
NAB has set itself apart by being the only big four bank to defy the senate committee’s request to pause branch closures while it deliberates, announcing 29 closures since March.
Mr McEwan appeared with Krissie Jones, the executive responsible for the retail network who represented the bank at the first hearing at Sale, and group executive for personal banking Rachel Slade.
Ms Slade is notable for confirming in the last House of Representatives economics committee hearing that NAB has no idea how many people in total come through the doors of its branches (and has therefore been publishing false visitation data in the ABA’s new branch closure impact statements since September).
For this reason alone it was always going to be an entertaining session.
ABOVE: Ross McEwan asks Rachel Slade to answer the data question in July. Vision: APH
Senator Malcolm Roberts was the first to hone in on the data quoted by NAB in its submission.
In the opening minute of his questioning, the NAB executives revealed two things: that over-the-counter transactions at its branches had decreased by 71 per cent since 2017 and that “a number” of those branches had had their hours reduced to just three hours a day.
Anyone who has been following this issue closely knows that NAB has been rapidly working through a list of branches where hours had been, according to Mr McEwan, “standardised” to three hours and closing them due to a “reduction in over-the-counter transactions”.
Senator Linda White’s opening question saw Mr McEwan confirm this.
ABOVE: Senator White confirms NAB closes branches due to a drop in foot traffic, which it doesn't record. Vision: APH
It was not a good start for them.
Senator White continued to question the integrity of NAB data, drilling down to visitation numbers provided in the branch closure impact statements that NAB told The Regional in July only included over-the-counter transactions and business bag deposits.
The exchange went on for some time with Senator White clearly frustrated by the refusal of the NAB executives to give her a straight answer.
Mr McEwan at one point even denied the information NAB had previously released to media.
Throughout this, Ms Slade looked visibly uncomfortable and made no comment.
ABOVE: Senator Linda White trying to get to the bottom of visitation data on NAB's branch closure impact statements, or "fact sheets". Vision: APH
If Ms Slade thought she was out of the gun sights on the data issue by the time Senator Gerard Rennick came to ask questions, she was in for a shock.
He came out of the gates firing, quoting her comments in parliament directly.
After some scrambling between the three executives, Ms Slade responded by again confirming that NAB does not measure general foot traffic, using the example of someone who would be coming into a branch to sort out an issue with a scam.
Exactly the information Senator White was trying to get out of them earlier.
Senator Rennick covered a lot of ground in his questioning, calling out NAB at one stage for the closure of its branch at Ocean Grove, which has seen strong growth in business, and executives being paid bonuses for meeting climate change targets through, in part, branch closures.
Mr McEwan denied his bonus was linked to climate measures despite NAB stating in its 2022 Climate Report that climate change – as part of environmental, social, and governance risk – had been added to the risk management framework the board uses to assess executive remuneration.
Senator Rennick eventually called out NAB over “the quality of the information being provided to this inquiry” before handing back to inquiry chairman Matt Canavan.
Senator Canavan felt the need to remind the NAB executives that misleading the senate was a contempt before asking whether the timing of the announcement to close the NAB branch at Waroona just a week after the committee was sitting in the area last month was intentional.
ABOVE: Senator Canavan asks Mr McEwan about the Waroona closure. Vision: APH
He then asked Mr McEwan why NAB was the only bank that had decided to ignore the committee’s request for a moratorium, citing 30 branch closures or closure announcements since March.
Mr McEwan said that in his experience, those branches would end up being closed anyway and he had decided to “do the right thing” and continue with his plans.
He also doubled down on an earlier statement that NAB now had a presence in "three times" as many towns than it ever did through services provided through Australia Post.
In response, Senator Canavan called Mr McEwan “out of touch” and suggested he should visit some of the towns where he had closed branches because the people in these locations had been telling the inquiry that Bank@post was “absolutely no substitute” for a bank.
ABOVE: Senator Matt Canavan tells NAB's Ross McEwan he is out of touch. Vision: APH
ANZ’s Shayne Elliott was the last of the chief executives to give evidence.
Mr Elliott’s contribution is notable for his statements in relation to one of the key terms of reference of this inquiry - to investigate the welfare issues being created by regional bank closures.
One of the key messages being delivered in submissions and at hearings so far is that digital banking is not an accessible substitute for a branch for all customers, particularly the elderly.
See Jacqui Stephens from the Junee Community Centre, who spoke at a hearing in Junee the following day, explaining this:
For this reason, it came as a bit of a surprise when Mr Elliott confidently told the senators that ANZ had teamed up with researchers from the University of South Australia to understand the impact of digital services on older Australians and that it wasn’t a problem.
“They found that most older Australians like and accept the online banking environment and that Australians over 65 are responding in line with younger cohorts in adopting digital banking,” he said.
“Some, such as those with hearing loss, are particularly embracing online banking and rarely use local branches for transactions.”
ABOVE: ANZ's Shayne Elliott talks research. Vision: APH
The statements did not sit well with the senators, with Senators Rennick, White and Richard Colbeck, all questioning the evidence.
Senator Rennick opened his questioning by asking Mr Elliott if he had heard of the Digital Inclusion Index, probably the most quoted academic research across the 1000 submissions received by this inquiry and the taskforce before it.
This includes the submission by the South Australian Government, which appointed ANZ last December as the state’s official bank.
Senator Rennick quoted Digital Inclusion Index statistics that put the number of Australians excluded from the digital world, and by extension digital banking, at about seven million people.
“I’m not familiar with that particular statistic,” Mr Elliott said.
Senator Colbeck could not believe this.
“This is one of the reasons we find all this stuff hard to put together … you say you want to compete digitally then you are not aware of a critical piece of information that looks at how people in the community are engaged in a digital sense,” he said.
“The Digital Inclusion Index is well-established, well-recognised, broad-based community research that looks at digital engagement.”
Mr Elliott agreed Senator Colbeck had a fair point: “You refer to ‘an index’ by RMIT, I refer to research we’ve done with the University of South Australia, so we’re not blind to research and trying to understand customer preference”.
He gave the senator an undertaking to look at Digital Inclusion Index data, saying “I’m sure there are always things we can learn”.
It might be a steep learning curve.
It took a lot of digging to find but The Regional can confirm that the study Mr Elliott was referring to was the Exploring Digital Capabilities in Older Australians report from September 2022, which was based on the feedback of 46 people aged between 67 and 90 from Adelaide and Melbourne.
46 people.
From Adelaide and Melbourne.
The researchers also disclose that most of those 46 people owned their own house with very few renting or living in a retirement village.
Only six of the group had a vision or hearing disability.
The university has confirmed that ANZ paid for the research and the study has not been, nor will be, submitted for peer-review.
Whether driven by ego or ignorance, to place so much emphasis on this data as evidence to a senate inquiry looking in part into the welfare impact of regional bank closures on the elderly is highly disrespectful.
It’s nearly as bad as Anna Bligh thinking it is okay to sit on a government taskforce and not read one submission.
Nearly.
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