Clicks before bricks: Nicola Field on how banking is changing

Technology has revolutionised the way we do our banking, but the challenge is making sure no-one is left behind

There was a time when the neighbourhood bank was a focal point of the community. But bank branches are fast disappearing, and it’s leaving plenty of Australians in the lurch when it comes to managing their money. Since 2017 almost 700 branches have closed. In regional areas, bank closures can have a devastating impact. A parliamentary report found that when consumers are forced to travel for their banking, they often take their shopping dollars with them, leaving local businesses struggling and heralding the onset of population decline as residents move on in search of better-serviced locations.

To date, NAB has been one of the few banks to buck the trend, having pledged in 2019 to keep its 316 regional branches open until at least early this year. But chances are it’s only a matter of time before some of NAB’s country customers see the curtains close on their local branch.

Covid’s digital boost

It’s a sign of the times that branch closures aren’t limited to regional locations. Figures from the banking watchdog APRA show that over the past three years 374 branches have closed across our state capitals. Westpac kicked off 2019 with plans to shed 22 branches from its retail network, mostly in suburban locations. In July 2020, ANZ closed 10 of its Perth branches.

It’s easy to assume branch closures are all about banks putting profits before people. But it’s not that simple. The fact is, technology is leading us away from face-to-face banking.

Roy Morgan research found just 4.7 million Australians visited a branch in the six months to October 2018, a massive drop of 27% in only four years. These days, two out of three of us use the DIY options of mobile or internet banking – a trend that has picked up during the pandemic.

“The social distancing required to fight Covid-19 has accelerated the move to digital payments by up to five years in the space of a couple of months,” says Paul Ryan, CEO of PayPal Australia. “There are clear signs that the shift to digital services will be lasting.”

Role for real people

For many people, online and mobile banking are poor substitutes for a personal touch. Branches still play an important role for older customers, who are twice as likely to visit a branch as younger people.

The Centre for Social Impact found over-65s are the least digitally included age group, though it’s not always about digital competence. According to National Seniors Australia (NSA), seniors have high levels of digital literacy. For 15% of over-60s it’s the cost of internet access that acts as a barrier to online banking.

Ian Henschke, NSA’s chief advocate, says connecting online has been a lifeline for older Australians during the lockdowns, and the organisation proposed a $10 monthly internet supplement for full-rate age pensioners in the last federal Budget. The suggestion wasn’t taken up despite an estimated annual price tag of just $192 million.

The cost of internet access isn’t the only hurdle. A 2019 NSA survey found 56% of seniors are simply more comfortable talking to a person than using digital services. As one survey respondent noted, older people “do not see very well, we do not hear very well, and it is very difficult to learn these [digital] skills in later life.”

In addition, seniors often have concerns about the security of their money when banking online – fears that are not unfounded. The Australian Competition and Consumer Commission found older Australians are grossly overrepresented when it comes to losing money to scams.

Increased funding

The news on accessible banking is not all bad. In September 2020, the federal government announced a $13 million funding boost to make sign language services (such as Auslan) more accessible for seniors. This matters because the support services available through the National Disability Insurance Scheme are only available to under-65s, and the extra funding will assist seniors to access interpreters for activities like bank appointments.

Deaf Australia has applauded the government for “hearing the call” from the deaf community. Nonetheless, the extra funding is low relative to demand. One in six Australians is affected by hearing loss – a figure set to rise to one in every four by 2050 owing to our ageing population. Moreover, the funding boost doesn’t compensate seniors for the cost

“Social distancing has accelerated the digital trend by up to five years in a couple of months”

of additional travel if their nearest bank branch has closed for good.

ATMs get the chop too

Along with the local bank branch, queueing for cash at an ATM could also become a thing of the past. APRA figures show that between mid-2017 and June 2020 the number of bank-owned ATMs fell by 4200.

This can be problematic for vision-impaired customers. A Human Rights Commission survey found blind and low-vision users often stick to one or two well-known machines – rarely do they grab cash from an ATM they haven’t visited before.

At the same time, independent operators account for a growing share of the national ATM fleet. These standalone ATM networks are not affiliated with financial institutions, and so aren’t obliged to follow Australian Banking Association (ABA) accessibility principles.

In the right direction

Some banks are taking serious steps to be inclusive. Beyond Bank in particular is challenging norms around traditional branch design.

“Creating an accessible and inclusive branch is simply about being more aware and obtaining insights from those living with a disability,” says Shane Farley, national manager of community development and sustainability at Beyond.

The bank put words into action by forming an initial partnership with Dementia Australia, implementing a plan to become a “dementia friendly” or

ganisation. From there the branch plans to reduce sensory overload, and a floor plan with the flexibility to create quiet spaces.

“Creating this type of inclusive environment doesn’t come with significant additional costs,” says Farley. “Using the key learnings of Canberra City, we refurbished our Glendale (NSW) branch in a similar style in November 2020, with the same appreciative response from our customers. Based on the success of our Canberra City and Glendale branches, this will be the new design, look and feel for more Beyond Bank branches moving forward.”

Where to from here?

Bank branch closures are not limited to Australia. It’s a trend seen across developed nations. On the plus side, Australia’s banks have committed to principles of accessible design.

Anna Bligh, CEO of the Australian Banking Association, acknowledges that new technologies have often provided “an invisible barrier” for the four million Australians living with a disability. But she says accessibility principles are helping to ensure that products and services meet the needs of people with special needs. The catch is that the principles are voluntary. They are not legally binding and therefore not enforceable.

That said, the banks are doing their bit. NAB has been working with Nick Morris, 1996 Paralympic gold medallist, to make sure new and existing branches plus ATMs are as accommodating as possible. All new Westpac ATMs are built for wheel

chair access, and ANZ was the first Australian bank to add accessibility features to its debit cards such as larger font and high-visibility edges.

These are all steps in the right direction. But it doesn’t stem the rising tide of branch closures. There is no simple solution, and for people with special needs, selecting a bank now involves a lot more than simply choosing the one with the lowest fees.

*Not their real names in case studies.

Technology has often created an invisible barrier for the millions of Aussies with a disability