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Chapter 12 - Telephone and Internet banking
Computer and internet use in Australia
12.1
Various studies have found that advances in information technology have
cut the cost of transmitting, processing and storing information. This has
lowered the costs of providing a range of financial services and transformed
the way in which these services are produced and delivered.[1]
12.2 This chapter looks at the growing use of the internet and telephone as a
means of banking and its adequacy in providing banking and financial services
to Australians in regional, rural and remote areas. It also discusses some of
the impediments that discourage people from using this mode of banking.
12.3
The Internet is an interconnected web of networks that transfers
information between computers or smaller networks of computers. This web
connects independent computers, communications entities and information
systems.[2]
Internet traffic initially travels between a link from the customer to the
Internet Service Provider (ISP). The connection between a customer and the ISP
is dedicated and through dial-up.[3]
12.4
Australia is among the world’s most enthusiastic users of
high-technology products.[4]
Dr Jennifer Curtin noted that in the last four years, Australians have
increasingly taken up the use of the Internet, to the point where they are one
of the highest user populations in the world, third after Sweden and the United
States.[5]
Access to a computer
12.5
The Australian Bureau of Statistics has conducted a major survey of
household use of information technology which shows that the
proportion of Australian households with access to a computer at home has
increased steadily from 44 per cent in 1998 to 47 per cent in 1999 and 53 per
cent in 2000. By 2002, 61 per cent of Australian households had access to a
computer.[6]
The statistics also clearly indicate that rural communities are well behind the
major cities in the acquisition and use of information technology.
Table
12.1—Number and Proportion of Households with Access to a Home Computer in
Metropolitan and Non-metropolitan Areas: 1998–2002 [7]
|
Region
|
Number of households
(‘000)
|
Proportion of all households
%
|
|
|
1998
|
1999
|
2000
|
2001
|
2002
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Metropolitan areas
|
r2 126
|
r2 302
|
r2 543
|
2 928
|
3 091
|
48
|
r51
|
r55
|
62
|
65
|
|
Ex-Metropolitan
areas
|
r958
|
r1 035
|
r1 260
|
1 383
|
1 465
|
38
|
r40
|
48
|
52
|
54
|
|
Total
|
r3 083
|
r3 337
|
r3 803
|
4 311
|
4 556
|
r44
|
r47
|
53
|
58
|
61
|
|
r revised
|
Access to the Internet
12.6
In comparing table 12.1 and 12.2, the statistics show that the
percentage of households with access to a computer is significantly higher than
those with home internet access. In 2002, 61% of households had access to a
home computer but only 46% had access to home internet. The overall pattern of
internet access over recent years shows a steady upward trend from a low 16% of
households in 1998 to 32% in 2000 and 46% in 2002.
12.7
Table 12.2[8]
also shows that those in metropolitan areas are more likely to have access to
the internet.[9]
Table 12.2—Number
and Proportion of Households with Home Internet Access in Metropolitan and
Non-metropolitan Areas: 1998–2002[10]
|
Region
|
Number of households
(‘000)
|
Proportion of all households
%
|
|
|
1998
|
1999
|
2000
|
2001
|
2002
|
1998
|
1999
|
2000
|
2001
|
2002
|
|
Metropolitan areas
|
r834
|
r1 151
|
r1 665
|
2 206
|
2 398
|
19
|
r25
|
r36
|
47
|
50
|
|
Ex-Metropolitan
areas
|
r264
|
387
|
676
|
908
|
1 047
|
10
|
15
|
26
|
34
|
39
|
|
Total
|
1 098
|
1 538
|
2 340
|
3 114
|
3 445
|
16
|
22
|
32
|
42
|
46
|
|
r revised
|
12.8 The difference in internet use between those in metropolitan areas and
those in other areas hovers around 11 per cent. In 2002, 50 per cent of
households in metropolitan areas had access to the internet compared with 39
per cent in non-metropolitan regions.
12.9
Dr Bruce Swanson suggested that this difference would probably be
magnified if broken down further into major regional centres and smaller rural
towns. He was of the view that ‘rural Australia is not well situated in terms
of skills or infrastructure to compete with the urban workforce for the new
‘location independent’ industries or to fully realise the potential benefits of
IT to its own industries’.[11]
12.10
This view accords with the experiences of those living in country Australia.
The Goulburn Shire Council was of the opinion that ‘the uptake of online new
technology is lower in rural and regional communities and within certain
demographic categories’. For example, it attributed the apparent lower number
of personal computers and access to the Internet in rural and regional areas in
part to differentials in disposable income levels.[12]
12.11 Recent data produced by the ABS shows that the rise in the number of
households with access to the internet has been accompanied by an increase in
the number of Australians using the Internet to pay bills or transfer funds.
Table 12.3—Persons who use the Internet to pay bills
or transfer funds: 2001–2002[13]
|
Internet transaction—Paid bills or transferred funds
via the Internet (a)
|
|
Region
|
1999
%
|
2000
%
|
2001
%
|
2002
%
|
|
Metropolitan areas
|
3
|
11
|
19
|
26
|
|
Ex-Metropolitan
areas
|
2
|
6
|
12
|
18
|
|
Total
|
3
|
9
|
17
|
23
|
|
(a) Percentages are of all persons aged 18 years and over.
|
12.12
A notable feature of the above table when compared to table 12.2 is the
significant difference between those who have access to the internet and those
who use the internet to pay bills or transfer funds. For instance, in 2002, 39%
of households in non-metropolitan areas had access to the internet but only 18%
of Australian adults in these areas were using the internet to pay bills or
transfer funds.
The growing use of the internet
and telephone for banking purposes
12.13
Statistics available on telephone banking also show a steady increase in
its use. The ABS found that in any one quarter in 1998:
- 1% of adults had used the internet for banking or bill paying
purposes;
- 35% had used the telephone to pay bills or conduct their banking.[14]
- 61% had used EFTPOS; and
- nearly 69% of adults had used an ATM for banking purposes;
12.14
The following table shows the steady and substantial growth in the use
of these four channels to pay bills or transfer funds since 1998.
Table
12.4—Payment of bills or transfer of funds using internet, telephone, EFTPOS
and ATM[15]
|
Adults Undertaking
Internet and Selected Electronic Transactions
|
|
|
Paid Bills or transferred funds via the internet
|
Paid Bills or transferred funds via phone
|
Paid Bills or transferred funds via EFTPOS
|
Transferred or withdrew funds via ATM
|
|
|
1999
%
|
2000
%
|
1999
%
|
2000
%
|
1999
%
|
2000
%
|
1999
%
|
2000
%
|
|
Metropolitan
area
|
3
|
11
|
44
|
51
|
64
|
66
|
73
|
75
|
|
Other
areas
|
2
|
6
|
32
|
47
|
60
|
67
|
68
|
71
|
|
Total
|
3
|
9
|
40
|
50
|
63
|
66
|
71
|
74
|
12.15 A recent telephone survey produced interesting figures for telephone and
internet banking. It showed that:
- 68% of respondents indicated that they use or know how to use
telephone banking but only 36% use it;
- 52% indicated that they use or know how the use internet banking
but only 28% use it.[16]
12.16
Although different from the figures produced by the ABS, they show a
marked difference between people saying they know how to use the technology and
those actually using it.
12.17
Mr Malcolm Rodgers, Executive Director, Policy and Markets Regulation,
ASIC, at a recent seminar on capital markets, observed that:
Of the many predictions that have failed, one of the best
examples is that traditional banks are dinosaurs that the internet will drive
into extinction. The reality is very different...the current wisdom is that the
combination of internet delivery channel with focused bank branches (‘clicks
and mortar approach’) will prevail, at least in the medium term. There is now
increasing recognition that, as public trust is so crucial to banking, an
established brand name is important and many customers wish to be able to do
some banking physically. It is the market incumbents that seem to have
succeeded in making the most of the opportunities presented by the e-finance
revolution.[17]
12.18
Even so, the rate in the number of people using the internet to conduct
banking business continues to rise. In the 12 months to March 2002, the number
of Internet bank users grew by 88 per cent to over five million. The biggest
driver is the age group of 50+, which recorded a 113 per cent increase in
registrations.[18]
Small business and electronic
banking
12.19
Small businesses are becoming major users of Internet banking. According
to the ABA, in the period from June 1998 to June 2000, Internet access by small
business increased 105 per cent (from 28 to 57.5 per cent). Banking is the most
popular on-line activity for Australian businesses, with 37 per cent of small
businesses using the Internet to undertake a banking transaction of some kind.[19]
12.20
In country Australia, businesses are beginning to appreciate the
benefits of using the internet. The Laverton Shire Council stated that ‘quite a
few local businesses now operate their businesses using electronic/telephone
banking services’.[20]
The Nauiyu Nambiyu Community Government Council noted that from a commercial
aspect, modern on-line abilities have allowed Council banking transactions to
continue without undue problems.[21]
Farmers and electronic banking
12.21
Internet use by Australian farmers is among the highest in the world.
This usage is largely for business purposes, mainly in the area of information
gathering. Other areas such as electronic commerce, Internet banking and
education and training are poised to grow substantially.[22]
An Australian Bureau of Statistics Survey on ‘Use of Internet Technology on
Farms’ revealed that in June 2000, 34 per cent of farmers were using the
Internet, up from 18 per cent in March 1999.
12.22
Evidence presented by a number of local councils adds to the general
impression that farmers are taking advantage of the benefits offered by the new
technology. The Lockhart Shire Council noted that there appears to be an increasing
willingness in the farming community to embrace computer technology and to use
the Internet for banking.[23]
According to the ABA, this trend is not surprising as most farmers run
‘efficient and professional businesses and are equipped with computers and
other innovative information technology’.[24]
Overall trend in the use of
electronic banking in country Australia
12.23
The trend over recent years indicates that electronic banking has become
an accepted mode of transacting banking business and will continue to grow in
popularity. Despite the increasing number of people in country Australia
adopting internet and telephone banking, especially farmers, the statistics
show, as noted earlier, that people in regional Australia have not embraced
electronic banking to the same extent as those in metropolitan areas. The
following section examines some of the major barriers to access to electronic
banking in regional, rural and remote Australia. In particular, it looks at a
number of recent studies that have focused on the telecommunications industry
in country Australia. It uses these studies to compare their findings against
the evidence presented to this Committee.
Provision of telecommunications
services in country Australia
12.24
The Regional Telecommunications Inquiry and submissions to that inquiry
provide a rich source of information on the provision of telecommunication
services to country Australia. The Committee draws on this material as a
starting point for the report’s discussion on various aspects of the telecommunication
industry and the delivery of banking and financial services in regional, rural
and remote Australia.
12.25
A number of submissions to the Regional Telecommunications Inquiry
acknowledged the contribution that advances in telecommunications could make to
improving the quality of life in the country. The Online Access Centre
Association of Tasmania stated:
With the increasing trend to transact business online and
access information and services online and the increased withdrawal of
face-to-face services in local communities, access to the Internet is a vital
part of life for rural and regional communities. The trend towards online
delivery is accelerating and therefore access to the Internet will not merely
be more important but essential for the survival of local communities.[25]
12.26
Similar views were presented to this Committee in regard to banking
services. Many submissions recognised the benefits that modern technology
delivers. They understand that electronic banking is an important feature of
the banking environment in 2003 and appreciate the need for country people to
be beneficiaries of technological progress. [26]
The Tamworth City Council noted that:
Advances in information technology have changed the
traditional banking structure. Individuals in rural communities are becoming
familiar with, and accepting of, operating outside the banking system which operated in the latter part of
the 20th century.[27]
12.27
Without doubt many benefits come with the use of electronic banking.
Consumer behaviour and the enthusiasm with which people have adopted this
method of banking stands as incontrovertible evidence of the popularity of
electronic banking. The convenience, ease of access, and lower transaction
costs attract more and more consumers. They now enjoy access outside normal
banking hours and have no need to leave their home or place of business to
obtain information and carry out transactions.
12.28
Not all Australians, however, are able to take advantage of the new
technology and the technology itself has limitations in delivering banking
services to regional, rural and remote Australia. The following section looks
at the access that people in regional, rural and remote areas have to internet
and telephone banking.
Overall accessibility to electronic banking
12.29
The NFF asserted that with the availability of technology and banking
alternatives, there should be nothing preventing people in regional and remote Australia
from having access to the same quality of service.[28]
Indeed, an expression that has gained currency is that electronic banking
overcomes the ‘Tyranny of Distance’.[29]
As noted earlier, however, statistics show that non-metropolitan areas are
lagging behind those in larger areas in the use of the internet and to a lesser
extent telephone banking.
12.30
Numerous submissions have identified a range of obstacles that
discourage the use of electronic banking.[30]
The following section outlines the main issues raised in evidence about the
difficulties experienced by people in country Australia in gaining access to
electronic banking. It looks at:
- the adequacy of the existing telecommunications
infrastructure—its availability, reliability and capability in delivering a
satisfactory level of service;
- affordability of the new technology; and
- consumers’ confidence in and ability to use the technology.[31]
Inadequate infrastructure
12.31
The growth and development of telephone and internet banking depends on
its supporting infrastructure which includes the connection, repair and
reliability of basic telephone services, coverage of affordable mobile phone
services, and ready and reliable access to the Internet. Recent studies have
shown that the key concerns about the delivery of telecommunication services
relate more to rural and remote areas than regional centres.[32]
12.32 While many submissions to the Regional Telecommunications Inquiry
acknowledged the progress made in extending and improving the quality of
telecommunications services in country Australia, they recognised that there is
still much scope for improvement especially in the more remote areas.[33]
The submissions mentioned the unreliability of the Internet service and cited
very slow speeds for data retrieval and services often dropping out as a
constant source of irritation for country users.[34]
Overall, the Regional Telecommunications Inquiry found that:
- there are particular areas in rural Australia where improvements
need to be made to network reliability;
- the Internet Assistance Program has benefited those who have
accessed it, but it needs to be more widely promoted, and benefits should be
guaranteed into the future for all Australians through a licence condition on
Telstra;
- continuing Government support and action will be required to
resolve fully some concerns, such as improving service levels in remote
Indigenous communities;
- a number of further modifications to existing programs and
arrangements are recommended, including in relation to ensuring the upgrade of
radio concentrator systems in remote areas, and addressing the issue of poorly
performing pair gain systems.[35]
12.33
Although less technical in detail and focused on banking services, the
submissions to this inquiry replicate much of the evidence before the Regional
Telecommunications Inquiry.[36]
They reinforced the message that although solid work has been done to
telecommunication infrastructure to improve access to services, there remains
much room for improvement.[37]
12.34
Even though many witnesses could see the advances being made in
technology they feared being left behind. Mr Francis, City of Ballarat, told
the Committee:
It is no good having banking online if you do not have a
usable phone line. If you talk to small rural councils like Yarriambiack in the
north of the state, you will find that is the crisis they face. You talk about
the information highway and they are on the information dirt road.[38]
12.35
In conveying a general dissatisfaction with the quality of service, and
consistent with the views put to the Regional Telecommunications Inquiry,
submissions cited difficulties such as slow speeds and line drop outs. Rather
than recite the long list of matters raised in submissions, the following
examples provide a fair representation of the complaints presented to the
Committee. The Shire of Dandaragan was just one of many drawing attention to
the need to improve internet access. It stated:
In many parts of rural Western Australia there are limitations
on internet facilities, costs too high or problems with delivery.
Some banks also have limitations on what can be undertaken by
telephone banking so if country people do not have a good internet access and
their bank has limited telephone banking facilities they are disadvantaged.[39]
12.36
The Corowa Shire Council also expressed frustration at the limitations
imposed by the telecommunication system. It stated that ‘we see ever increasing
use of electronic means to access banks and particularly in our rural areas
there is a need to upgrade the speed of Internet access to banking’[40]
12.37
To the same effect, the District Council of Grant, the Nanango Shire
Council, the City of Ballarat, the District Council of Robe, the Victorian
Farmers Federation, the Gunning Shire Council and the Gulin Gulin & Weemol
Community Council Aboriginal Corporation submitted that telephone services and
Internet services could be improved in their respective areas.[41]
Broadband
12.38
A major problem with meeting the challenge of providing country
Australia with adequate access to modern technology is not simply a case of
catching up with metropolitan areas but also of staying in touch with
international developments.
12.39
The Summerland Credit Union Limited asked for the continued commitment
from Telstra and the Federal Government to improve data transmission
technology, allowing financial institutions greater flexibility and reliability
when delivering electronic products.[42]
This observation carries greater weight when the speed of technological
advances is considered. Continuing change means that to be at the forefront of
such progress, Australia cannot relax its endeavours to keep pace with
international developments. The roll out of the broadband market in Australia
is the next major challenge.
12.40
Broadband provides data or Internet download at speeds significantly
greater than that available from the standard PSTN telephone line connection.
Broadband services are expected to produce significant efficiencies and
economic and social benefits across the community. The Broadband Advisory Group
described broadband as:
...the ability of a single access line or wireless or
satellite link, connected to a telecommunications network, to provide support
for fast, always-on access to digital content, applications and a range of
services, some or all of which can occur simultaneously.[43]
12.41
According to its findings, Australia was slow to start with this
technology but is now beginning to embrace it. OECD research indicates that in
December 2001 Australia was ranked 18th in broadband penetration out
of 30 OECD countries.[44]
12.42
In some regions Telstra lines, especially the copper variety, do not
always lend themselves to the latest electronics technology. The Local Government
of Tasmania told the Regional Telecommunications Inquiry that ‘old and tired
infrastructure proves unreliable and detrimentally effects data speeds’. The
majority of Tasmania’s rural areas are still served by the copper line system.
It asked ‘how do regional areas attract new e-businesses if the infrastructure
does not equate with standards provided in urban areas?’ The Wheatbelt
Development Commission also noted that the poor capacity of copper lines
running onto farming properties is a persistent issue within the Wheatbelt
region.[45]
12.43
The Committee notes that in December 2000, the Regional Australia Summit
Steering Committee suggested that the Federal Government may wish ‘to focus on
the use of innovative solutions to overcome the limitations of the copper wire
telephone network in a vast continent such as ours’.[46]
It went further:
The telecommunication needs of all Australians in the 21st
century will go well beyond the basic telephone service and the approaches to
service delivery also need to reflect this complex environment.[47]
12.44
The same concerns about access to new infrastructure were related to the
Committee. The East Gippsland Shire Council noted that ‘Broadband capabilities
are generally not available and satellite services (both capital and
operational) are expensive’.[48]
The Winton Shire Council noted that telephone banking and Internet
banking/shopping are growing at the expense of traditional banking but that
remote communities such as theirs are the last recipient of technology
advances. It went on to state that more importantly, ‘many properties do not
even have mains power supplies and therefore have not the same equity of access
to technology advances’.[49]
12.45
In summing up the general level of dissatisfaction with the
telecommunications infrastructure to country Australia, the Shire of Chapman
Valley made clear that electronic banking as it now stands is not an acceptable
substitute for the traditional methods of banking. It submitted:
The distinct disadvantage that rural and remote areas of
Australia have in regards to using internet and office banking services is the
poor quality communications provided to these areas of Australia, therefore
making such services a totally inefficient and ineffective method of banking
and one which would never replace the branch banking facilities until such
communication facilities are improved.[50]
12.46
A number of submissions to recent inquiries gave particular attention to
the question of equity in access to telecommunications services for country
Australia.[51]
The Broadband Advisory Group recommended that Broadband should be available to
all Australians at fair and reasonable prices. The NFF supported this view. It
believed that the ability to use Internet banking should be the same for
somebody at Mount Isa as for somebody in Sydney.[52]
There is, however, a general recognition that some areas of Australia will not
receive services through market forces.[53]
The Broadband Advisory Group recommended that the Government identify areas
that are unlikely to receive services on a commercial basis at fair and
reasonable prices within an acceptable timeframe.[54]
12.47
The Regional Telecommunications Inquiry noted:
The reality is that in telecommunications factors such as
geographic isolation, the high cost of delivery in some areas, limitations of
particular technologies and lack of commercial viability in some areas, mean
that not all consumers across the country can expect access to exactly the same
suite of services, at exactly the same price, and in exactly the same time
frames.[55]
12.48
It recognised the need to allocate funding to subsidise commercially
unprofitable services and concluded that:
...funding responsibility should rest primarily with Government,
rather than industry. It is appropriate for Government to directly fund its
social and economic telecommunications policy objectives, as it does other
policy priorities.[56]
12.49
The Committee acknowledges that great advances have been made to improve
communication infrastructure in rural and regional Australia but that more
needs to be done. Further it recognises that there are areas particularly in
remote Australia that present challenges for telecommunication service
providers in providing adequate access to telecommunication infrastructure on a
commercially viable basis.
12.50
The Committee accepts that areas difficult to service may need
government intervention to ensure adequate and affordable access to
telecommunication services. It is beyond the scope of this inquiry to suggest
the nature and extent of this intervention but notes the findings of the
Regional Telecommunications Inquiry. It agrees with the view that any
such assistance should be targeted and nationally co-ordinated. The
Committee, however, is firm in its view that the Government in considering the
provision of telecommunication services to regional, rural and remote Australia
keep foremost in its mind the crucial role that this service now has in
delivering banking and financial services to people throughout country
Australia.
Recommendation 15
The Committee recommends that any initiatives to develop or
improve information technology and telecommunications infrastructure in
regional, rural and remote Australia take account of the banking needs of those
living in country Australia and are implemented to support and enhance the
provision of such services.
Affordability
12.51
The extension and upgrading of infrastructure to remote areas is not,
however, the only factor influencing accessibility—affordability is also an
important consideration.[57]
As mentioned by a number of participants to this inquiry, the cost of the
service is also a disincentive for people to use broadband. The Macedon Ranges
Shire Council asserted that in rural areas such as theirs ‘telecommunications
infrastructure is of poor quality and often expensive and slow to access’.[58]
The Hindmarsh Shire Council noted that in many areas the lack of affordable
access to bandwidth, also frustrates attempts at ‘on line banking’.[59]
12.52 The Victorian Farmers Federation maintained that many people in rural
Victoria do not find internet banking a suitable alternative to
over-the-counter services due not only to infrastructure difficulties but also
the cost of long-distance calls and IT infrastructure such as computer
equipment and installation of home satellite receivers.[60]
12.53
Fees charged for an electronic banking transaction are lower than those
for over-the-counter transactions (see Table 11.3). They do not act as an
impediment for consumers rather they are an inducement to use this form of
banking. Although the fees charged for an Internet transaction are low relative
to charges for other means of transacting, the initial outlay and ongoing costs
of maintaining the necessary apparatus may effectively limit public access to
such facilities for people who cannot afford their own equipment.
12.54
In other words, the costs involved in purchasing equipment and internet
connection may prove to be a real obstacle for some people in regional, rural
and remote Australia which frustrates their desire to bank ‘on line’. A
computer for home internet use still represents a significant outlay for many
Australian households.[61]
12.55
A report by the Human Rights and Equal Opportunity Commission found:
A computer for home internet use would still be regarded as a
very substantial investment by the great majority of Australian households and
would be likely to remain financially out of reach for many. Some households
are likely to reallocate expenditures to achieve internet access as the
usefulness of this access expands and becomes more obvious, but this choice
remains effectively unavailable to people on low and fixed incomes including
many older people and people with disabilities, at least pending further
development and deployment of a wider range of internet access technologies
such as web phones and web TV.[62]
12.56
Recent statistics produced by the ABS support this observation. They
show that costs associated with Internet use figured prominently in the reasons
for households not having home internet. Although there is little difference
between metropolitan and non-metropolitan regions, around a quarter of
households without home internet access cite high costs as a barrier to access.
Table
12.5—Main Reasons for Households being without Home Internet Access—2002[63]
|
|
No. of households without home internet access
|
No use
|
Lack of interest in the internet
|
Costs too high
|
Access elsewhere
|
|
|
‘000
|
%
|
%
|
%
|
%
|
|
Region
Metropolitan areas
Ex-Metropolitan areas
|
2 383
1 667
|
17
15
|
24
28
|
25
27
|
9
5
|
|
Total
|
4 051
|
16
|
25
|
26
|
7
|
Currently, those who cannot afford to purchase their own
equipment also have limited public access to internet facilities.[64]
12.57
The Committee accepts that a central component to improving access to
basic financial services for Australians is ensuring that such services are
affordable. In cases where banking options are restricted and some consumers
cannot afford the initial expense for equipment, such as a computer,
alternative arrangements should be implemented. The answer may well be in the
provision of such equipment through other service providers such as the local library,
an RTC or indeed the local council. Banks may well consider cooperating with
local councils to supply and install such equipment.
Cash flow and cash management problems
12.58
While Internet and telephone banking provide a convenient means of
paying bills and transferring funds, they do not provide a solution for people
or businesses needing to deal in cash or cheques. Evidence presented in chapter
3 identified the difficulties experienced by small business when the local bank
branch closes its doors. At the moment, electronic commerce does not address
this problem of managing cash flow and cheques. The Shire of Woodanilling
submitted that you cannot get cash from the Internet while the Catholic Women’s
League Australia observed that you cannot deposit money or cheques over the
phone or by the internet.[65]
It argued that it is necessary to have options that will cater for these needs.[66]
12.59
Moving and managing large sums of cash is a serious issue for business.
The Carnarvon Chamber of Commerce pointed out that employing new technologies
does not help a remotely based business deal with cheques and cash, both of
which need to be physically transported to branches. It made the point:
For one hotel business in the area, banking requires a 900 km
round trip on gravel roads, subject to wash outs after rain and no amount of
technology short of a ‘teleporter’ is going to solve their problem. They
currently send their cash and cheques to their bank with trusted clients.[67]
12.60
To the same effect, the Guyra Shire Council noted that ‘most businesses
deal in cash and cheques and thus rely on having facilities to deposit the
day’s takings’. It asserted that if there are no banking facilities in the
town, businesses have to travel greater distances to undertake their daily
banking.[68]
The Post Office Agents Association Ltd also noted that ‘there continues to be a
need to have a physical channel to transact certain types of businesses, eg
cash deposits and withdrawals, proof of identity, signature of documents,
passbook accounts etc’.[69]
12.61
These limitations on the range of services offered through internet and
telephone banking continue to pose problems especially for those in remote
districts. Access to cash and face-to-face services are important elements in
providing financial services across the nation and telephone and internet
banking are rarely a complete solution for those living in remote areas.[70]
Establishing a relationship between customer
and banker
12.62
Although the internet and telephone banking may put a customer in
immediate contact with their bank, the nature of this contact is quite
different from that established over the counter in a traditional branch.
Indeed the use of call centres or the complex procedures in using the telephone
to conduct a transaction or obtain advice can be a source of much irritation to
the customer. The evidence presented in chapter 3 clearly showed the
frustration experienced by customers who cannot converse with local staff about
their banking business.
12.63
The sensible use of dedicated phone lines and designated account
managers would go some way to help foster a better relationship between the
customer and their bank. Clearly, the banks could give greater consideration to
the more effective use of telephone and internet banking to improve their
customer service in this area. The following chapter deals with using
technology to enhance the relationship between customer and bank.
Conclusion
12.64
The Committee recognises that new technology offers enormous advantages
for country people to conduct their banking business. Further, it has the
potential to open up a range of other financial services to people in remote
areas. The realisation of such benefits, however, depends on having access to
stable, reliable and affordable telecommunications infrastructure capable of
delivering a level of service that would enable all Australians to conduct
their banking business efficiently and effectively. Until this can be provided
to all Australians, access to the new services offered by the banks will be
inequitable and country people in particular are destined to lose out.
12.65
Making suggestions regarding the quality and reliability of
telecommunication infrastructure, including the cost associated with data lines
and links to more remote communities is beyond the scope of this Inquiry. The
Committee, however, stresses that any initiatives to enhance information
technology and telecommunications infrastructure in rural, regional and remote Australia
must consider the provision of financial services.
12.66
In turning to the matter of affordability of equipment, the Committee
accepts that there are people in country Australia who cannot afford the outlay
to purchase a computer and hence will have limited access to internet banking.
The Committee believes that Government and banking industry assistance toward
ensuring that communities have access to public phones and internet terminals
is a first step toward enabling all Australians to access electronic banking.
12.67
The following chapter discusses some of the steps being taken by
community groups in the country to make the new technology work to the
advantage of people living in outlying areas.
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