The Australian Prudential Regulation Authority (APRA) told the inquiry that,in the past five years,the number of bank branches dropped by 30 per cent,or more than 1000,in major cities,and 29 per cent in regional and remote areas.
The Senate inquiry has so far received 500 submissions on branch closures,many of them from local councils,businesses,and customers negatively affected by banks shutting their doors.
However,the banks have responded by arguing that more customers are shunning branches for their day-to-day banking needs as they also use less cash. They have also highlighted alternatives to bank branches,such as the partnership between banks and Australia Post.
Commonwealth Bank said it understood the concerns about branch closures,but in the five years before COVID-19 there was a 46 per cent decline in over-the-counter transactions in branches in cities,and a 42 per cent slide in regional and remote areas.
These trends “only accelerated” during the COVID-19 pandemic asmore people switched to digital banking, it said.
“This preference for digital banking has resulted in a significant decline of customers who choose to make everyday banking transactions over the counter,which has been felt nationwide in both regional and metropolitan areas,” the bank’s submission said.