A federal government taskforce has called on banks to engage more closely with local councils on branch closures.

The final report of the Regional Banking Taskforce, released last Friday, found that banks aren’t doing enough to communicate and consult with local communities after deciding to close a local branch.

The taskforce says local governments, which may also rely on physical banking services, are often caught by surprise when branches close, and recommends that the Australian Banking Association (ABA) establish a protocol around regional branch closures, including impact assessments, by mid-2023.

“Assessments should provide clear reasons for the closure and the engagement that will occur with customers, local government and other stakeholders,” the report says.

Helping regional communities transition

The Australian Local Government Association (ALGA), which was represented on the taskforce and raised concerns about regional closures, welcomed the recommendation, saying it would help regional communities transition from branch closures in their towns.

President Linda Scott said while closing branches was a commercial decision for banks to make, councils were often left to pick up the pieces.

“I want to thank the Taskforce for listening to our concerns and incorporating our feedback,” Cr Scott said.

“When councils have a full picture of what is happening with branch closures then they can help communicate these decisions and alternative banking options to their community.”

Bank@Post

The taskforce also found Australia Post’s banking service Bank@Post was an important provider of banking services in regional areas.

“However, submissions suggested there may be scope for improving the service by, for example, embedding banking staff at the post office, providing more banking options and improving facilities,” the report said.

It recommended that Australia Post and participating banks should collaborate to promote the service more and expand programs to support transition to Bank@Post when branches close.

The Regional Banking Taskforce was established by the former Government in October 2021 to bring banks and other relevant parties together to analyse the trends in bank closures in regional and remote Australia, assess how banks transition to new banking delivery models, and identify alternatives to bank branch models.

The Taskforce included banks, peak bodies including the Australian Banking Association, Australia Post, and ALGA.