Report Reveals the Impact of Rural Bank Closures on Vulnerable Australians
Regional residents in Australia are facing significant challenges due to the closure of rural banks, according to a recent report. The closures are leaving these communities with limited access to essential financial services, depriving them of much-needed financial support. The research, conducted by the ARC Centre of Excellence for Automated Decision-Making and Society, highlights the struggles faced by vulnerable Australians, particularly those in remote areas who lack the funds and digital know-how for online banking.
One of the key findings of the report is that over a third of regional residents experience financial strain when it comes to paying for high-quality internet. This has a direct impact on their ability to afford other essentials. In fact, 36 percent of regional Australians spend over 5 percent of their income on internet access, which exceeds urban levels. Additionally, a higher percentage of regional Australians need to spend over 10 percent of their income on internet access. This disparity highlights the economic barriers that many in these communities face when it comes to accessing a reliable internet connection.
The lack of reliable internet connectivity in remote areas also contributes to the challenges faced by Indigenous Australian communities. Many members of these communities rely on face-to-face banking services, despite the growing popularity of online banking. Difficulty accessing cash and concerns about elder financial abuse further compound the vulnerability of Indigenous Australians. Professor Julian Thomas emphasizes the importance of face-to-face interactions in handling complex banking tasks and addressing issues such as elder abuse, scams, and fraud. Removing banks from regional areas further disadvantages an already vulnerable community, impacting their independence and ability to access basic financial services.
Improving digital access and participation is crucial for these communities, but establishing reliable internet infrastructure should be a priority. The report argues that expecting these communities to learn about online safety without access to working internet is unrealistic. Earlier research from the ADM+S Centre confirms that remote Indigenous Australian communities are among the most digitally excluded groups in the country, particularly as remoteness increases. Lack of mobile service and limited telecommunications access further exacerbate this exclusion, with 43 percent of Indigenous Australian communities lacking mobile service and 84 percent having only a shared public phone or no telecommunications access.
The report’s findings have been submitted to the Senate inquiry on regional bank branch closures, which aims to investigate the impact of these closures. This ongoing inquiry will shed light on the consequences faced by regional residents as almost 800 rural branches have closed since June 2017. The closure of these branches forces many residents to travel long distances to handle their finances, placing an additional burden on vulnerable individuals.
While major banks argue that the rise of digital banking and the decline in cash transactions have made branches less feasible, critics argue that these institutions fail to consider the needs of rural residents who lack access to transport. Federal MP Andrew Gee criticizes the “city-centric attitude” of these banks and highlights the challenges faced by seniors and vulnerable customers.
Despite the closures, some banks are making efforts to address the issue. Westpac, for example, recently announced a 10-year deal with Bank@Post to provide over-the-counter banking services in 3,500 locations nationwide, including 1,700 regional areas without a branch. This partnership aims to bridge the gap and ensure that even without a physical branch, regional residents can still access essential banking services.
In conclusion, the closure of rural banks in Australia is having a significant impact on vulnerable communities, particularly in remote areas. The lack of access to reliable internet connectivity further exacerbates these challenges, making it difficult for residents to access basic financial services. It is essential for policymakers and financial institutions to address these issues and find innovative solutions to ensure that all Australians, regardless of their location, have equal access to financial support and services.
