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New analysis by the Customer Owned Banking Association reveals that customer owned banks operate over four branches per billion dollars in assets, while the major banks collectively operate less than one branch per billion dollars in assets.
The analysis of data from the Australian Prudential Regulation Authority reveals that Australia’s four major banks average 686 branches across Australia. In contrast, the customer owned banking sector operates 735 branches despite the entire sector being one-fifth the size of an average major bank.
Customer Owned Banking Association (COBA) CEO Michael Lawrence has shared this data with the Government’s Regional Banking Taskforce, which met today in Mildura, Victoria.
“The customer owned model is unique as it allows our members to put people before profits,” Mr Lawrence said. “In many parts of regional Australia customer owned banks now operate the only local branch left in town.”
“Customer owned banks are part of the fabric of the communities within which they operate. Our members support regional communities through grants to local charities, sporting clubs, and community organisations. This investment in local communities is not a public relations exercise – it’s the genuine by-product of a banking sector that has the customer as a core part of its DNA.”
Customer owned banks have a proud history serving regional communities, with a presence in every state and territory. More than half of our members’ headquarters are based outside capital cities, bringing diverse employment opportunities to local communities.
While looking at the impact of branch closures, it is also important to consider the underlying drivers behind closures. There is no doubt that cost pressures, including significant costs associated with regulatory compliance, evolving customer preferences, along with large overheads associated with the traditional branch model, can place pressure on banks operating branches across Australia, with the impact of closures felt most acutely by regional communities where alternatives are limited.
Some of our ideas to improve banking access in regional communities include incentives for innovative community models, digital inclusion for regional communities, fair access for all banks to Bank@Post services, and local government partnerships.