More Australian banks are pulling out of country towns, leaving local businesses and individuals without any over the counter bank services.
In one situation last week, a regional town with a population of 2,000 saw its last bank brand close, leaving locals a forty-five-minute drive to the nearest bank. This means local businesses have a round trip of ninety minutes just to bank business takings, increasing business costs by hundreds of dollars a week as banking, which used to be done locally daily, now must be done three times a week resulting in four and a half hours in the can and at least another hour and a half parking, waiting and more.
It impacts on how a business operates.
While some businesses can operate by promoting cashless trading, in regional and rural towns with an older demographic, cash is preferred.
In not banking every day, small business retailers carry more cash on their premises. This increases the risk of theft. Insurance company representatives have said this could result in higher premiums. The costs resulting from banks reducing their level of customer service cascade, hurting further these vulnerable local businesses that matter to their small local communities.
With more than half of our small business POS software customers in regional and rural Australia, matters such as the closure of local bank branches and agencies matters to us, because it matters to our customers. It is possible that a local bank closure is enough to tip a local business owner to closing their business. The knock-on effect on local jobs, local suppliers and out of town suppliers like us would be noticed.
We think there is a role for government here to offer an operating cost subsidy to banks that maintain regional and rural banks in towns with a lower than agreed population threshold. We think such a policy would not only help small businesses like our clients, it would improve the appeal of the town for new residents as well as improving security for those who use the bank.
Locally owned small business retail is vital in any situation, but more so in regional and rural towns. The retreat by banks is an operational challenge that disadvantages regional and rural Australia and this is bad for the economy.
Tower Systems actively supports calls by small business retailers for government action to provide support for local banking services.