Cashless warning as bank chief predicts huge change for Australia: 'Massive implications'
The head of the Australian Banking Association (ABA) has warned that bank branches will undoubtedly look different in the future due to the declining use of cash. Digital methods like cards and smart devices make up the overwhelming majority of payments these days, as physical money slowly fades into obscurity.
ABA chief Anna Bligh said the way Aussies use banking services was undergoing the "biggest transformation in the history of the country" as the cashless and digitisation revolution continues. She said, naturally, this means things would have to change.
"We are, as Australians, using less and less and less cash," she told 2GB's Michael McLaren.
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"That has massive implications for what our branches are doing.
"If people aren't coming in anymore to withdraw or deposit cash, then that really changes what a branch is and what it might look like in the future."
She cited figures stating that 70 per cent of everything Aussies paid for was in cash back in 2007.
That's dropped to about 10 per cent now and the Reserve Bank of Australia (RBA) predicts it could fall as low as 4 per cent by 2030.Bligh said not only are Aussies using bank branches less because of the reduced use of cash, but another popular service has also dramatically changed.
"People will be surprised to know that 75 per cent of all home loans in Australia are now written by a mortgage broker, and those people come to your house," she said.
"The old models of doing things are breaking, and we've got to find different and better ways to make sure that Australians, wherever they live, can continue to get the banking services they need."
Bligh pointed to Westpac's recent move to resurrect three regional branches across New South Wales, Victoria and Tasmania that closed in recent years.
The new Service Centres will be based in Moree, Leongatha, and Smithton and won't act like a normal branch.
The ABA chief said you won't be able to withdraw money from a teller like you normally would, but you can access the centre's SmartATM.
They will also provide face-to-face support for retail and business customers, assistance for digital banking services, as well as services related to identity verification, personal and business lending, and fraud and scam support.
"They're not quite like the old branch that you once knew, but it is a face-to-face experience," Bligh said, hinting this is how branches could look in the future.
Hundreds of bank branches have shut down in the past few years as customers prefer to do all their banking online.
Canstar analysis revealed 230 branches were closed in the 2023-24 financial year, 52 of which were in regional areas.
While the rate of closures is lower compared to previous years, it's still tough for those forced to travel sometimes large distances to get to the next closest branch.
The Big Four banks have all signed a moratorium against closing any more regional branches until at least 2027. What happens after that deadline is anyone's guess.
Bligh admitted that some banks have been closing branches in major regional centres with "booming" populations, but it was largely down to foot traffic.
"The people who are living there aren't using bank branches anymore," she said.
"They are paying for things electronically, they're using their phone to buy their groceries."
She said if customers want a digital experience for their banking, banks had to divert their finances and resources into making sure it worked and it was safe.
"Putting your money and your investment in the best place to look after your customers is not an entirely clear thing at the moment," she added.
Cash advocates staged a protest across the country this week and called on others to withdraw money from ATMs, banks, and supermarkets.
The grassroots movement was designed to send a message to financial institutions that cash is still important to many, even if it's not used as much by the masses.Sign in to access your portfolio
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