‘Exploring new ways’: Big banks want to share regional branches

Australia’s banks are seeking an exemption from competition laws to set up regional banking hubs, where several institutions would share one physical facility, against the long-term backdrop of declining access to branches in regional towns.

The number of bank branches outside Australia’s major cities dropped from 2335 in 2017 to 1459 last year, according to federal data, as the vast majority of people switched to primarily interacting with their financial institutions online and the sector closed offices to cut costs.

Under a plan submitted by the Australian Banking Association, which represents the big four banks as well as Macquarie and several international institutions, the Australian Competition and Consumer Commission would allow the banks to co-operate on regional and rural services.

The plan, lodged on October 2, includes banks issuing broad standards on when people can expect access to physical banking services, a trial of up to 10 banking hubs and arrangements to share costs of those regional facilities.

Banking association chief executive Simon Birmingham said that the package would ensure that regional customers still have access to face-to-face banking services.

“Banks recognise that some customers still prefer face-to-face options even though the number of transactions in branches has plummeted, challenging their viability,” Birmingham said in a statement. “Branches will continue to be an option for regional customers, however this hub trial explores new ways to deliver face-to-face banking services in communities that currently don’t have a branch.”

If the ACCC grants the legal exemption, the banks will negotiate with one another on the standards and hubs, and then choose individually whether to adopt the plan.

In February 2025, Treasurer Jim Chalmers announced that the big four banks had agreed not to close any more regional bank branches until mid-2027. Last week, the Commonwealth Bank of Australia announced it would extend its regional bank branch closure moratorium to 2030, matching a similar vow by Westpac.

To get the exemption from Australia’s competition law, the regulator’s rules state that the banks will have to show that their plan would not “substantially lessen competition” or “has a net public benefit”. The ACCC was contacted for comment.

The United Kingdom already has more than 230 hubs operating under a similar model, but that has not stopped concerns from advocates and the government that there is too little access to in-person banking in some parts of the country. An inquiry into the issue commissioned by the Labour government is due to report this month.

Cash usage, which is one of the primary factors cited by advocates as justifying physical banks, has fallen from being used by 96 per cent of Australians every week in 2010 to 50 per cent in 2025. But the statistics from the Reserve Bank show cash makes up less than 10 per cent of payments by value.

Australia Post outlets also offer banking services in partnership with several institutions.

In November, consultancy KPMG calculated that Australia’s big four banks had recorded a combined annual profit after tax of $29.8 billion. The firm noted that the banks were quickly increasing their technology spending to make their operations more efficient and better serve customers online.

The big four banks are facing competition in Australia from the likes of Macquarie, which is now the fifth-biggest home lender, and ING. Neither has a network of branches.

Birmingham, the banking association’s CEO, is a former Liberal minister. Two other senior staff members at the association, Chris Taylor and Maxwell Pryor, left earlier this year to join One Nation.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.