Rural town lost its last bank on the same day as flood

The last bank in Mannum closed just as floodwaters inundated the small tourist village on the Murray River.

BankSA shut during the South Australian floods in December 2022, leaving Mannum residents with a 70km round trip to the nearest bank to access cash and manage their finances.

It is one of many stories of the disconnect between the major banks and rural communities shared at a long-running Senate inquiry into increasing branch closures.

“I’ve always believed our regions are the backbone of our society,” Mannum local Cathy Clemow told the committee sitting in Kingston on Wednesday.

“Every time a central service collapses it weakens the community.

“My fear is that each collapse will weaken our backbone, our communities will become incapacitated and regions crippled and unable to achieve their full potential.”

Nearly 800 regional and rural branches have shut across the nation since June 2017, according to Australian Prudential Regulation Authority data.

The major banks have told the inquiry the rapid take-up of online banking, along with a decline in cash transactions and foot traffic, mean many branches are no longer viable.

But regional communities argue they are the centre of the nation’s valuable agriculture, energy and mining industries and should not be abandoned.

The inquiry has heard farmers rely on relationships with local branch managers to oversee their sizeable loans, while vulnerable and elderly people need cash and the security of a bank.

The Coorong District Council, a large grain, dairy, fishing and renewables region south-east of Adelaide, lost its last bank when BankSA shut its Tailem Bend branch last year.

Rural towns are “between a rock and a hard place”, with little choice but to stick with the major banks for agribusiness and corporate lending.

“We all have to transact with the bank,” councillor Jonathan Pietzsch said.

“And the banks are using this reliance to take regional communities for granted.”

The council is increasingly having to step up to fight for essential services, as healthcare and financial facilities leave the region at the same time, Mr Pietzsch said.

The inquiry has long heard country people cannot always use digital banking as internet access is not reliable or affordable.

Professor Julian Thomas, from the ARC Centre of Excellence for Automated Decision-Making and Society, said the digital gap between city and rural Australians is closing, creating opportunities for remote areas.

But it is a “double-edged sword”, he said.

“Digital services are very popular in remote communities ... people are able to do their banking in their community in a way that they were never able to do before.

“The difficulties are around the support for those who are not confident about using those sorts of services and the access issues, the infrastructure issues.”

Accessibility should be at the centre of banks’ customer service values, he said.

“That means ... not imposing unreasonable costs on customers, that they are affordable and inclusive in the sense that they should be available for all Australians.”

The inquiry is due to report back to parliament in May.