The true extent of bank closures across the country has been revealed, raising a chorus of concerns and highlighting the drastically shifting landscape of the financial world.
The Australian Prudential Regulation Authority (APRA) has pulled back the curtain on the latest figures, revealing a concerning trend in the closure of bank branches.
Over the past year, a wave of closures has swept through the country, with hundreds of banks shutting their doors. This trend has left many consumers, businesses, and communities grappling with the consequences of limited access to financial services.
The Australian Prudential Regulation Authority (APRA) has released its 2023 Authorised Deposit-Taking Institutions (ADIs) points of presence statistics. These figures provide an in-depth view of the physical banking service channels available to Australians, including branches, ATMs, and EFTPOS facilities.
The latest statistics show a marked decline in the number of bank branches, with the closure of 424 branches across the nation, marking an 11 per cent reduction. What’s particularly concerning is the 7 per cent decrease in branches located in regional and remote areas, where banking services are already less accessible.
This alarming trend represents more than mere numbers on a spreadsheet; it signifies a potential crisis in the making. Reduced access to physical banking services can have severe repercussions for consumers and businesses, especially in areas where digital banking infrastructure might not be as robust.
One person who is fully aware of the severe repercussions that can come with limited access to banking services is Cash Welcome campaign spokesperson Jason Bryce who recently launched a petition calling for guaranteed access to banking and cash in regional areas — which has currently received close to 130,000 signatures.
“Australians don’t want to lose access to cash or their right to choose cash to pay for essential goods and services,” Bryce said in response to the latest findings.
“Consumers and businesses need cash and banking for our local economies to thrive. Even people who don’t use cash every day need cash occasionally or when systems go offline. Many bank branches are being closed despite continuing heavy foot traffic and even growing numbers of customers.
“Banks enjoy a central place at the heart of our economy and money system. Banks need to serve their customers and ensure that all communities have ready access to cash.
“Australians don’t want a cashless society. If I buy bottled water that doesn’t mean I want the water pipes to my home dismantled.
“The cash system is essential national economic infrastructure, that is now being dismantled and replaced by privately owned payment systems charging fees to users.”
The latest findings come as experts warn that the notion of Australia becoming a cashless society is more than just a possibility, it’s “well underway”.
The move toward a cashless society, once seen as a futuristic idea, is happening much faster than expected and RMIT associate professor in finance, Dr. Angel Zhong believes we could be doing away with cash by the end of the decade.
“The shift towards a cashless society in Australia isn’t just a possibility, it’s already well underway,” Zhong explained in a piece for The Conversation.
“The convenience of digital transactions has become irresistible for consumers and businesses and has led to the sector eclipsing traditional payment methods.”
A recent report from the Australian Banking Association shone a light on the rapid rise of digital payments.
Payments made with digital wallets on smartphones and watches have surged from $746 million in 2018 to over $93 billion in 2022 with cash now making up only 13 per cent of payments in Australia, down from 70 per cent in 2007.
Digital wallets are popular with people of all ages, but it’s young Australians aged 18 to 29 who use them the most, with two-thirds making purchases with digital wallets.
Interestingly, around 40 per cent of Australians feel comfortable leaving home without their physical wallets, credit cards, or debit cards, as long as they have their mobile devices with digital wallets.
With such drastic shifts in how people view the use of cash and traditional payments, Zhong believes that Australia will enter into a cashless society by 2030, however, the Commonwealth Bank expects the shift to occur much sooner with their estimates placing Australia going cashless as early as 2026.