Leaving customers in the cold

Banks are closing rural and regional outposts. Westpac says it will shutter 19 branches, including those in Te Anau, Carterton, Waikanae and Wainuiomata.

Some South Island closures, like the one in inland Fairlie, will leave towns without any bank at all. ANZ too says it is looking at five closures.

Is there any point complaining about all of this?

Actually, yes, there is. The tide can’t be held back forever, but such transitions should be handled in a way that doesn’t hurt the most vulnerable customers.

The banks, paragons of modern profit-making, are failing to do that by swinging the axe like this.

Of course everyone understands the powerful trends behind this sort of decision – the broad take-up of internet banking (a boon for many consumers) and the emptying out of many regional towns, which has ruined many businesses that once filled their main streets.

Yet even so, for a substantial minority of people, the new technologies are no replacement. They don’t use computers and don’t want to. They may not trust the security of web banking. They have spent their lives dealing with real people when they have an issue with their money – and they want to keep doing so.

So the question is how a large, enormously profitable business ought to deal with this split in its customer base – between the fast and tech-literate and the more traditional?

The narrow-minded answer is to follow the trends aggressively and leave a dwindling, often elderly, minority to cope as they can.

A more creative and generous one would be to keep providing services for that cohort – by either holding open the branches, perhaps with reduced hours, for a few more years, or at least by providing intensive support to those grappling with change. Westpac has indicated it will do some of the latter in places like Fairlie. If banks can take the longer view, it may also prove to be more rewarding one.

Those that attend closely to their customers on the other hand can reap the benefits.

Consider the successful revival of forecourt attendants at some petrol stations in recent years, or the popularity of of smaller regional banks that push customer service.

Of course, the issues at play here are not just, or even mainly, about banks.

With an ageing population, there will be other cases of groups struggling to cope with, and feeling socially cast aside by, new and more detached technologies. That is going to need alertness and care across the spectrum, from the health system to community leadership.