Have you visited a regional town lately? You’ve probably noticed a pattern. The bakery is still there. The pub is still there. The post office is hanging on, but the bank branch is shut, permanently.

It’s like someone has ripped a vital organ out of the community. Banks are integral to how a regional town operates.  They help local businesses bank cash, secure lending, solve cash flow problems and speak to someone who understands the area. Regional and rural banks provide jobs. They give Boomers and people less comfortable with online banking, a way to manage their money without feeling flummoxed.

According to research from the Regional Banking Investment Alliance (RBIA), regional and remote Australia has lost around 900 bank branches over the past nine years, shedding around 4000 jobs in the process. That’s a 38 per cent reduction in bank branches and a decline in service for regional areas. In the meantime, the RBIA says banks have saved about $1 billion a year through those closures.

Canberra knows there is a problem. Federal Parliament has already conducted two inquiries into regional bank closures. Both concluded branches were essential and solutions were needed to keep banking services in regional communities. Yet meaningful policy action has failed to materialise.

If you’re a regional business, losing a branch can mean driving to the next town to deposit takings, waiting longer for finance decisions, or spending hours on the phone trying to fix something that once took just a few minutes across a desk.

Cash still matters in many communities. So does trust. So does being able to sit down with a real person when fraud hits an account, a payment goes missing or seasonal cash flow tightens.

David Heine, CEO of Regional Australia Bank, said face-to-face services remain essential.

“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,” he said.

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

Regional business owners know this already.

Many local economies run on industries with uneven income cycles. Harvests. Tourism peaks. Weather events. Freight disruptions. A slow quarter followed by a bumper month. Banking in those conditions is rarely one-size-fits-all. It helps when someone on the other side of the desk understands how your business and the region works.

Online banking has its place. Most businesses use it every day. The issue is that digital tools can’t replace every service. They don’t handle every problem well. They don’t create local jobs. They don’t sponsor the junior footy club or know which main street floods first.

When branches close, confidence takes a pounding, too. It sends a message that services are shrinking and investment is moving elsewhere. It’s problematic when towns are trying to attract families, workers and new businesses.

Aaron Newman, CEO of Queensland Country Bank, said branches are critical “for jobs, local economies and the livability of communities.”

He added that while others are stepping back, his bank continues to invest in branches because it knows how important they are to regional communities.

The stop-gap measures in place do little to solve the broader issue. A temporary moratorium on some closures doesn’t  address reduced opening hours or stripped-back services. Bank@Post can help with basic transactions, but it can’t replace the privacy, security and specialist support of a staffed branch.

Meanwhile, regional banks that stay committed to their communities often end up serving customers from larger institutions that have pulled out. How is that fair? It’s an imbalance. And it needs attention.

The RBIA is calling for a bank-funded cost-sharing model to help maintain essential face-to-face services in regional towns. Whether that exact proposal is the answer is open for debate. Shared-service branches, industry funding pools and targeted incentives are all worth serious discussion.

What should not be up for debate is the need itself.

Regional Australia contributes enormously through agriculture, tourism, resources, transport and thousands of small businesses keeping local economies alive. Those communities deserve better than watching another branch lights-out notice go up in the window.

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