AN alliance of regional banks, small businesses and community supporters are calling for an urgent fix to the ongoing desertion of essential bank branch services across regional Australia – a situation that has blown a $1 billion-a-year hole in regional investment, and cost nearly 4000 local jobs in just nine years.

Current band-aid measures like the “moratorium” until 2027 and Bank@Post simply don’t stack up, as many big banks are using them to mask ongoing reductions in opening hours and services including cash handing, the Regional Banking Investment Alliance said.

The Alliance is proposing a bank-funded, low-cost, cost sharing model be introduced urgently, to quickly counter the ongoing decline in branch services.

The model will see essential banking services and bank jobs with trained staff return to regional and remote communities.

RBIA member and CEO of Regional Australia Bank, David Heine said a Community Service Obligation and cost-sharing model on banks would simply reverse an unfair cross-subsidy that already exists – where banks that choose to stay and service regional communities are currently providing face-to-face services for the rest of the industry with no support.

In a process called “pass-through banking” regional banks are providing the daily services, while larger and online banks are profiting from mortgages and deposits.

“Face-to-face services are part of a bank’s social licence to operate in Australia, and many are abandoning that responsibility,” Mr Heine said.

“Face-to-face banking services are not a ‘nice-to-have’ – they provide essential services and trained personnel to cater for needs of the people and businesses in our regional and remote communities.

“Branches provide employment and infrastructure as well as community engagement and support. They are places of action when people need help from trained professionals – security, privacy, scam prevention, problem solving and cash services,” he said.

As a consequence of community backlash, Federal Parliament has conducted two inquiries.

CEO of Regional Australia Bank, David Heine, said a Community Service Obligation and cost-sharing model on banks would simply reverse an unfair cross-subsidy that already exists.

Both inquiries concluded that branches were essential and that solutions were needed to keep bank branches in regional areas, however no meaningful policy has been implemented.

Over the last nine years, there has been a 38 per cent reduction in bank branches in regional and remote Australia – around 900 branches closed and nearly 4000 jobs lost.

Banks have pocketed about $1 billion a year in cost savings from these closures.

Worse still, some of the fastest growing banks in the country, backed by tax-payer protections, provide no face-to-face regional branch support at all.

Queensland Country Bank CEO, Aaron Newman said regional communities deserve access to essential banking services.

“We believe that means maintaining a strong, local presence,” Mr Newman said.

“While others are stepping back, we’re continuing to invest in our branch network because we know how critical it is for jobs, local economies and the liveability of communities.

Being a customer-owned bank means we’re here for the long term, and we’re committed to showing up where it matters most.

“The approach being proposed is a practical and fair solution to a growing problem. Regional banks like ours are already doing the heavy lifting to maintain face-to-face services, often supporting customers from across the broader banking system.

“A modest, industry-funded model would help ensure these essential services remain viable and accessible for the communities that rely on them,” Mr Newman said.

He said the “moratorium” on branch closures only covered the four big banks, does not cover reductions in opening hours or services and is set to expire in 2027, while Bank@Post does not provide the array or services, privacy or security required by regional people.

“A proper incentive-based scheme is needed to preserve the financial viability of existing branches and incentivise banks to invest in new ones,” he said.

“The RBIA has developed a modest and affordable cost-sharing model that redistributes bank funds to where they need to go, helping fund regional staff working face-to-face in our towns and communities.

“This is a bank problem, and the industry needs to step up and fulfil their obligations to the Australian people. That is why the model is 100% funded by banks, with no taxpayer funds needed.”

In recent weeks, the RBIA has held several consultations with community and business groups, as well as discussions with other banks, politicians and Treasury.

Australasian Convenience and Petroleum Marketers Association CEO Rowan Lee says he supports the Regional Banking Investment Alliance.

“It is essential that bank branches remain open, especially in regional areas. Fuel stores have been mandated by the government to accept cash, and bank branches have the staff and the security to ensure the ongoing accessibility to cash,” he said.

Combined Pensioners and Superannuants Association senior policy officer, Dr Billy Pringle recognises face-to-face services cannot simply be replaced by online banking, especially for groups and communities who are digitally excluded.

“A loss of bank branches in the bush means a loss of financial autonomy and financial safety for these communities,” he said.