The cutback in bank branches was foreseen. The Wallis report anticipated
that the banks would rationalise their branch network. In 1997, it concluded:
The Inquiry recognises that there will be a need to replace any
rural bank branches which are closed with alternative delivery channels. If
this occurs, the importance of a branch presence is likely to become less
relevant to individual consumers, if not to the community. As well as ATMs,
EFTPOS, telephone and computer banking, new delivery mechanisms which may be of
assistance in rural areas include mobile rural industry specialists and agency
arrangements with non-financial services providers such as Australia Post.
Rural and remote communities and institutions should work together to explore
alternative delivery options which meet the needs of all concerned.
Clearly, the Wallis report presumed that while competition would result
in branch closures a range of services would spring up to replace them. As
expected there has been a decline in traditional bank branches accompanied by a
corresponding growth in alternative forms of banking. Taking a broad approach,
this chapter presents an overview of the range and type of banking and financial
services that are now available to people in regional, rural and remote Australia.
Current access to a banking service—overview
In essence, the banks readily acknowledge that there has been a
reduction across the board of bank branches in Australia. Nonetheless,
according to the ABA, the introduction of different forms of banking, in most
cases, has compensated for the loss. It asserted that the major banks maintain
extensive face-to-face and electronic self-service banking networks throughout
rural and regional Australia.
The ABA submitted that in 2001:
- banks maintained 4,712 branches and around 5,043 agencies;
- Australia Post had 2,821 giroPost outlets (which commenced in
- taken together (branches, agencies, and giroPost), the current level
of over-the-counter services available in Australia today is only 14 per cent
less than the number of over-the-counter facilities provided in 1990.
Mr Bell, ABA, explained further that there are 400,000 EFTPOS outlets in
Australia and 12,000 or 14,000 ATMs together with telephone banking.
There is also the ability for customers in rural and remote areas to deal with
mobile bankers or with regional banking centres on particular agribusiness
The figures seem impressive and are supported by current data.
Indeed, the ABA relies on a recent study to demonstrate that the great
majority of Australians have access to a banking service. It maintained that
this latest research shows that there is good representation of financial
services in regional and rural Australia, compared with other commercial and
The study found that there are a total of 3,380 points of presence for
Australian banking and financial services.
Any Australian non-metropolitan town or metropolitan suburb that contained at
least one banking service (Bank and Credit Union branches, ATMs, giroPost
outlets and Australia Post Office Manual Bank Agency Locations) was considered
as one point of presence for this analysis.
Before looking at the findings of this survey, the report discusses the
APRA database on access to banking services in Australia on which this survey
Statistics on access to banking services
In 1999, the Hawker Report concluded that ‘the statistical information
that is readily and officially available is of limited use in compiling a
picture of the delivery of financial services through branches and agencies.’
It recommended that the Minister for Regional Services, Territories and Local
Government and the Minister for Financial Services and Regulation, in
consultation with State colleagues, undertake a collection of comprehensive
data on the access communities have to financial services.
In its response to the recommendation, the Government agreed with the
finding that the lack of comprehensive data on the availability of services to
different regions made it difficult to draw conclusions about access to
services in regional and remote areas of Australia and whether they had
improved. It explained that the Australian Prudential Regulation Authority
(APRA) with the Australian Bureau of Statistics (ABS) and the Reserve Bank of
Australia (RBA) had embarked on a major exercise to review and harmonise its
data collection and analysis processes.
It recommended that:
APRA take into account the recommendations of, and the issues
raised by, the Hawker Committee in its review of data collection and that it
works closely with representatives of the financial sector in determining the
most appropriate data to be collected. The Government also recommends that APRA
consider publishing information that easily and accurately represents the level
of access Australians have to basic financial transaction services both
face-to-face and electronic, and that this data distinguishes between the
access people have in urban and rural communities. The relevant financial
institutions are understood to regard APRA as the most appropriate agency to
handle the collection of such data.
The Commonwealth considers it appropriate to await the outcome
of APRA’s review before it undertakes any separate collection of data on the
access communities have to financial services. If such a collection of data is
to be undertaken by the Commonwealth, then it will be done in consultation with
the relevant State authorities. 
Although APRA did not see the collection and analysis of data on the
availability of banking services as part of its prudential functions, it has
now assumed responsibility for gathering such information. APRA explained that
rather than focus on branches and agencies as was the case previously it had
developed a survey that captures all service channels available to customers. 
APRA’s ‘Points of Presence’ database
In June 2001, APRA announced the release of the Points of Presence data
which was to be the first of an annual series that would over time show the
changing patterns of financial services available to the community. The
information contained in the survey reaches down to the level of individual
service channels within separate localities, towns and suburbs.
The survey recognises that banking services are now delivered through a wide
range of ‘service channels’ and not just by traditional bank branches.
In its spreadsheet entitled Points of Presence 2001, APRA divides
the various channels of banking service into those that qualify as ‘branches’
and those that do not. To qualify as a ‘branch’, a service channel must meet
the following criteria:
- accepts cash and other
deposits (including business deposits) and provides change;
- facilitates the keeping of accounts
for customer access, including the provision of account balances;
- opens and closes accounts;
- can facilitate or arrange the
assessment of the credit risk of existing and potential customers; and
- offers additional services in
the one establishment such as financial services, business banking and
Problems with definitions—branch and agency
Although the definition of a branch is now used consistently in the
database, institutions have the latitude to name and define their other service
channels as they choose. According to APRA, this approach makes comparing
similar service channels across institutions difficult. Indeed, APRA’s figures
provide almost 120 different types of ‘points of presence’ (see appendix 4).
The sheer number of terms employed under the category ‘non branch’ is confusing
especially where a number of institutions retain the term ‘branch’ in titles
even though the facilities are not branches under the definition. These include
terms such as Branch–Kiosk; Branch–Non Cash, Interstate Branches and Mini
Branch. While the description accompanying each point of access conveys some
understanding of the level of service provided, the range is still very great
and the information is buried in the raw data. For instance the term ‘agency’
is used in both branch and non branch categories—for example, Commonwealth
manual agencies and agencies with Electronic Funds Transfer at Point-of-Bank
(EFTPOB) are not regarded as a branch while the National’s agencies are deemed
to be branches.
Thus, the definitions present a very difficult challenge for statistical
analysis. How does one compare a Westpac In-Store bank with an Elders Rural
Bank agency? An Agribusiness Banking Centre with a MAXI Multimedia kiosk?
Measuring banking services according to the number and location of ‘points of
presence’ without further considering the services those points of presence
actually deliver is fraught with difficulty. Terms such as ‘agency’ are too
broad to have any value as a statistical tool to help in understanding the
level of service provided.
Other information about the quality of service is also missing. For
example, the Committee visited the small Queensland town of Blackbutt which has
an RTC. The statistics may well show that this town has a banking facility but
it does not show that the Nanango Shire Council subsidises this facility to the
amount of between $8,000 and $10,000 a year.
Goombungee may well have an ATM but according to a council representative it
spends 90 per cent of its time with ‘an out of order’ sign on it.
More importantly, while the data shows the services available it
provides no indication of areas without banking facilities. This deficiency in
the data base was evident to the Committee when it sought information on the
availability of banking services to remote communities in the Northern
Territory. The only information available was a very basic survey undertaken
by field officers (see appendix 5). The Committee believes that any data
collected on the availability of banking services in Australia should also
document communities where there is no point of banking presence.
Other difficulties in analysing the data
APRA also drew attention to another aspect of the data that makes
analysis difficult. It warned that service channels other than those meeting
the definition of a branch, can not be aggregated to achieve the total. The
same points of presence may be simultaneously reported by separate
institutions, for example giroPost.
Furthermore, APRA told the Committee that it did not believe that the
2002 comparison figures for 2001 are worth anything mainly because the
institutions provided numbers but ‘did not know where to classify them’.
The Committee hopes that these teething problems are soon resolved.
Without doubt the Points of Presence database is comprehensive—it lists
all facilities providing a banking service. The Committee accepts that the
quality of the statistics now being collected has improved, particularly in
having the one standard definition of a bank branch. Even though the statistics
in defining a branch offer a better understanding of the services provided by
such a facility, the almost 100 remaining types of facilities that are grouped
together under the classification of non branch pose a problem for analysts.
Lack of analysis
Of greater concern, however, is the lack of analysis of this material.
The Department of Family and Community Services noted that evaluation of the
data is left to individual users. It suggested that there may be some benefit
in APRA or another agency developing ‘a more coordinated approach to analysis’
that could be used by governments, banking and other financial institutions.
APRA, however, told the Committee:
...we do not attempt to analyse or interpret this information, nor
do we have any particular insight into the accessibility of banking services
across regional and rural Australia.
...we do not actually want to put the effort into analysing that
return because it is not germane to our mandate which is set out in the APRA
The Committee accepts that APRA’s core responsibility is to ensure the
prudential soundness of ADIs. Nonetheless, the Committee believes that the data
collected by APRA is a rich source of information for the banking industry and
for governments and should be presented in such a way that it provides some
insight into the accessibility and level of banking and financial services in
country areas. It definitely should identify areas that have limited access to
bank services particularly those without a bank branch that are dependent on
self-service banking channels.
The Committee believes that further work is required to refine the
definitions used in this database so they can be used to convey a more accurate
understanding of the level of banking and financial services available across Australia.
The Committee also believes that the body of raw data collected by APRA should
be analysed and presented so that it ‘easily and accurately represents the
level of access Australians have to basic financial transaction services’ in
metropolitan and in country areas. The Government recommended as much in its
response to the Hawker Report.
The Committee recommends that the Department of the Treasury and
the Department of Transport and Regional Services review the ‘points of
presence’ database to determine whether the current system of gathering
statistics on access to banking services is producing a full and accurate
representation of the delivery of such services to rural, regional and remote
Australia. Further, acknowledging that APRA does not attempt to analyse or
interpret the information it gathers for the points of presence database, the
Committee recommends that the Australian Government nominate another agency
better suited to carry out such analysis.
The following section looks at a recent study that draws on APRA’s
database to reach conclusions on the access to banking and financial services
in regional Australia.
A map of the distribution of banking and financial services in Australia
On behalf of the ABA, the National Centre for Social Applications of
GIS, the University of Adelaide, conducted preliminary analysis to map the
nation’s access to banking services using the data collected by APRA in its
2001 survey on the various points of presence. It explained its findings as
For this analysis 20 km was identified as a maximum reasonable
distance to travel to access a banking service. Few localities with a
population greater than 200 persons are further than 20 km from a banking
service. Within the whole of Australia these localities number 32. Within
Remote and Very Remote Australia there are 28 localities that are further than
20 km from a banking service, the majority of these are concentrated within the
Northern Territory and Western Australia, where population densities are low
and distances between populated localities are high...Euclidean analysis of the
distances between those 28 localities and their nearest banking service shows
that 6 are within 50 km, 4 are within 100 km, and 18 are greater than 100 km
from any banking service.
The 28 Remote and Very Remote localities isolated from banking
services tend to be remote communities, whose populations fall between 200 and
The study also suggested that throughout Australia there are less than
five localities with greater than 200 and less than 700 persons whose only
access to a banking service within 20 km was an ATM.
It concluded that ‘Australians have extensive access to banking services
through a variety of distribution channels—including over the counter, in a
supermarket, newsagent, post office or an ATM’.
The map below shows the locations of communities in Australia with more
than 200 people that do not have an over-the-counter banking service within 20
Table 6.1—Map showing the
areas within 20 km of any Bank Services Branches
These statistics appear quite promising for the case that access to
banking services in rural and regional Australia are adequate. For example the
Commonwealth Bank cited APRA’s latest points of presence data to confirm that
it is increasing its services to regional, rural and remote communities through
a variety of distribution points such as ATMs, EFTPOS machines, Woolworths Ezy
Banking and giroPost.
Unfortunately, definitional problems cloud the issue. As noted earlier
in this chapter, the ABA includes Australia Post Manual Banking Agency
locations and giroPost outlets as banking ‘points of presence’. There are 805
of these agencies and more than 14,000 giroPost outlets throughout Australia,
many in rural and regional Australia. These outlets do not meet APRA’s minimum
criteria for a branch and the level of banking service offered by the manual
banking agency is very limited.
Further still, including an ATM as a banking point of presence means that the
understanding of a banking service is reduced to its most rudimentary level.
So, while the ABA’s statistics indicate that very few Australians are
more than 20 km from some form of banking service, it is impossible from their
research to determine how many Australians have access to adequate services.
Thus, although the statistics may seem impressive in showing that there
are only 32 localities in Australia with populations over 200 that do not have
a banking service within 20 kms they give no indication of the level of service
provided to those communities. It should also be noted that the survey did not
include communities with less than 200 residents. There are over 1,000 discrete
Indigenous communities alone with populations under 200. Chapter 15 provides
more information on these communities.
Clearly, the banks are placing a heavy reliance on non-traditional forms
of banking services to convey a positive message that they are indeed catering to
the needs of those in regional Australia. Evidence to this Committee, however,
highlights community dissatisfaction with the level of service they provide.
Chapter 3 quite clearly identified the problems caused by branch closures or
the withdrawal of banking services from country areas. Chapter 5 found that
because of the lack of competition in some areas of regional, rural and remote
Australia the market was tardy in responding to consumer demands. Against this
backdrop of branch closures and weak competition, the following chapters look
more closely at the range of banking services provided to people in regional,
rural and remote Australia and consider the adequacies of such services.
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