Home Australia Major Aussie bank to face grilling after announcing it will shut all its branches as it goes digital

Major Aussie bank to face grilling after announcing it will shut all its branches as it goes digital

by Elijah
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Bankwest says it will become a digital bank when it closes 45 branches across WA in October.

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Bankwest executives will face an inquiry into rural bank closures, a week after the company announced it will close all its branches in favor of online services.

The Commonwealth Bank subsidiary says it will become a digital bank when it closes 45 branches in Western Australia in October, while 15 regional sites will be converted to CBA operations.

Bankwest’s announcement said 97 percent of transactions were made online, with less than two percent of its customers visiting branches regularly.

There was an average of 30 face-to-face transactions a day in its suburban branches and 15 in its regional locations, the company said.

“I understand this will be difficult news for some of our customers and Bankwest is introducing a number of support measures to help … regular branch users carefully through this transition,” chief executive Jason Chan said.

Business leaders are expected to face the rural banking inquiry in Tom Price, in WA’s Pilbara region, on Wednesday afternoon.

Nationals senator Matt Canavan asked Bankwest to attend the hearing and said the closures were a disappointing decision.

“These closures will affect all the communities in which they operate, reducing banking choice and the ability to get an essential service,” said Senator Canavan, who chairs the committee.

The committee is investigating why almost 800 rural branches have closed across Australia since June 2017, leaving regional residents to travel long distances to manage their finances.

Executives at all the major banks have told the inquiry that the rapid spread of digital banking and the decline in cash transactions have made branches less viable.

But regional councils and local communities have proven that online banking is not reliable in areas where phone and internet connections remain spotty.

Bankwest says it will become a digital bank when it closes 45 branches across WA in October.

Bankwest says it will become a digital bank when it closes 45 branches across WA in October.

Farming groups have told the inquiry that farmers’ relationships with local bank managers are crucial to their complex business operations and loans.

The committee has been told that small businesses suffer when people take their bank to neighboring towns, while older and vulnerable populations are left without access to cash.

The Pilbara’s Shire of Ashburton, which covers 100,000 square kilometres, does not have a bank, despite being home to major natural gas and iron ore mining operations.

Residents of Paraburdoo, a mining town 1500km north of Perth, have to make an 850km round trip to the nearest bank in Karratha.

Others in the shire travel up to 700km, the council’s submission to the inquiry said.

“The Shire of Ashburton is concerned about the impact this will have on vulnerable members of our community as well as on the productivity of businesses,” the submission said.

The inquiry must report back to parliament in May.

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