The head of the Australian Banking Association (ABA), Anna Bligh, recently underlined a profound shift in how Australians interact with financial institutions. Driven by the rapid decline in the use of cash, this move towards a cashless society is reshaping the entire Australia banking landscape.
According to a report by Yahoo Finance, digital payments now overwhelmingly dominate consumer transactions, pushing banks to rethink the traditional role of their branches.
This transformation, already well underway, is not only changing the way services are delivered but also raising questions about future access and customer experience across urban and regional communities.
The Steady Decline of Cash Usage and the Rise of Cashless Banking
Digital payment methods such as cards and smart devices now dominate transactions, with physical currency becoming increasingly rare. Speaking to 2GB’s Michael McLaren, Bligh stated:
“We are, as Australians, using less and less and less cash.”
She noted that this change has “massive implications for what our branches are doing.”
Bligh described this transition as “the biggest transformation in the history of the country” for banking services. Australians are increasingly relying on digital solutions, reshaping expectations for physical branches.
Changing Dynamics of Bank Branches
Beyond the reduction in cash handling, the role of branches is also impacted by evolving practices in mortgage services.
“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,” Bligh said.
An example of adaptation is Westpac‘s introduction of new Service Centres in Moree, Leongatha, and Smithton. These centres differ significantly from traditional bank branches. Customers will not be able to make cash withdrawals from a teller but will have access to SmartATMs.
In addition to ATM services, the centres provide face-to-face assistance for retail and business banking needs, support for digital banking, help with identity verification, assistance with personal and business lending, and fraud and scam support.
Ongoing Branch Closures and Regional Impact
Branch closures continue to shape the banking landscape. According to Canstar, 230 bank branches closed during the 2023-24 financial year, with 52 closures occurring in regional areas.
While the closure rate has slowed compared to previous years, it still presents challenges for customers who must travel greater distances to access banking services.
Australia’s four largest banks have agreed to a moratorium on regional branch closures, committing to maintain current services until at least 2027. The future beyond this period remains uncertain.
Bligh acknowledged that closures have even occurred in regional centers with growing populations, largely due to reduced foot traffic.
Digital Investment and Customer Security
The move towards digital banking requires significant investments to ensure platforms are safe and user-friendly. Bligh pointed out that aligning investment with customer needs is not straightforward, stating:
“Putting your money and your investment in the best place to look after your customers is not an entirely clear thing at the moment.”
The focus is now on enhancing digital banking infrastructure to support the needs of a population that increasingly prefers electronic transactions.
