Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

How the retreat of banks from regional and rural Australia hurts small businesses retailers and the communities they serve

Mark Fletcher
October 19th, 2017 · 14 Comments

More Australian banks are pulling out of country towns, leaving local businesses and individuals without any over the counter bank services. They are closing branches and agencies.

In one situation recently, 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.

This 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 everyday retail businesses like newsagencies.

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.

In having to bank far away, this increases the risk on the long journey to and from the bank.

With so many small business retailers in regional and rural Australia, matters such as the closure of local bank branches and agencies matters. Newsagents are being affected as are their customers and their suppliers.

It is possible that a local bank closure is enough to tip a local business owner to closing a local retail business. The knock-on effect on local jobs, local suppliers and out of town suppliers like us would be noticed.

I 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. While I am not usually a fan of subsidies, in this situation there is merit, especially for small towns.

I think such a policy of support would not only help small businesses like newsagents, 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.

Through my POS software company Tower Systems I am actively supporting calls by small business retailers for government action to provide support for local banking services.


Category: Newsagency management · Newsagent representation

14 responses so far ↓

  • 1 Andrew FENNELL // Oct 19, 2017 at 7:13 AM

    Hi Mark
    Why not encourage them to move into newsagencies and give them any incentive?


  • 2 Colin // Oct 19, 2017 at 7:45 AM

    Subsidies solve nothing. Better to spend on training and educating on usage of cashless systems, plus regulating banks to provide universal on line services at universal prices irrespective of customer size or location.


  • 3 peter // Oct 19, 2017 at 7:55 AM



  • 4 Sharyn Boddy // Oct 19, 2017 at 8:16 AM

    We have two major banks close in two years. Both we bank with, we now have to bank at the post office, cheques taking 5 days to clear. Our closest branch is 45min drive. Making it very difficult to meet our commitments on time with our creditors.


  • 5 Brett // Oct 19, 2017 at 8:42 AM

    I agree with Andrew – a small bank would work well with most newsagencies


  • 6 Steve B // Oct 19, 2017 at 9:24 AM

    Post Offices pick up the slack quite well when this happens in the smaller towns. Large business deposits can still be made, and largish withdrawals as well.
    As a newsagency post office cross it brings extra customers through the door who, no matter how much advertising you do, still discover gifts etc and extra sales result.


  • 7 Mark Fletcher // Oct 19, 2017 at 9:28 AM

    The examples I had prior to writing this post were towns where the local post office is not the newsagency and does not offer service of use.


  • 8 Steve // Oct 19, 2017 at 11:00 AM

    Post offices have taken on most day to day banking functions and there wouldn’t be many if any small towns with a newsagent and no LPO.
    My main challenge is change, LPO’s dont carry small notes and coins for the till nor do they accept bulk coins as deposits. I have to send excess change to another town for banking usually every fortnight and carry a large float to cover myself, which is a cost and a risk I could do without.


  • 9 John F // Oct 19, 2017 at 4:15 PM

    Why subsidise the banks? As an in conjunct Post/ News offering AP full business banking facilities we cannot afford to subsidies the banks with handling bulk coins. If the banks / Govt were to pay us correctly for the time taken most Post Offices would be more than willing to spend the time counting and handling coins for anyone. Pharmacies, Doctors and even Telstra (phone boxes) are paid a Govt subsidy for Community Service Obligations in many rural areas yet Licensed Post Offices are expected to suck it up and provide most of this work, below their costs.


  • 10 Mark Fletcher // Oct 19, 2017 at 9:02 PM

    I am not suggesting subsidising banks. Rather I am suggesting subsidising s mall local communities.


  • 11 Joe // Oct 22, 2017 at 2:27 PM

    I believe and certainly in my travels (during a recent holiday in regional NSW 🙂 ) seeing more service hubs on the rise. These involve a post/parcel/lottery agency and yes possibly room for a community bank. These hubs would work well regionally, IMHO.


  • 12 Kerrilyn // Oct 26, 2017 at 10:57 AM

    We know the situation Mark writes about first hand. In our scenario we were the agency for the bank, the small “former local building society” was bought out by a Tasmanian bank. Our LPO is our major competitor in town. There are a number of limitations on what we can do at their LPO not to mention we don’t particularly like this operator seeing any of our financial dealings nor do we have trust in the confidentiality of our dealings in a small community. Others who live in small towns will know exactly what we mean. The “community bank” are not remotely interested in assisting or establishing new branches as we’ve approached them. The irony in our situation is this agency closed when we were told it was their second busiest branch they had, a blanket decision made in Tasmania without any thought for the rural community in Queensland left with the fallout. Politicians not remotely interested at any level of government. The agenda to prop up Post offices with banking as technology changes the mailing platform.


  • 13 Ken // Oct 26, 2017 at 11:52 AM

    Well put Kerrilyn, our PO is also our major competitor and when GNS decided to sell their products outside of the newsagency channel they pounced on it selling their sovereign products especially at discounted prices just to annoy us. If we put something on sale they would do the same or go even cheaper. There is no such thing as a level playing field nor is there much loyalty when it comes to saving money. The foot traffic diminishes each time a business closes in a small town and customers are forced to go to the larger centres.


  • 14 Tim // Oct 28, 2017 at 4:43 PM

    The time is not far away when cash wont be used even for small transactions as phone based apps will replace it. China, for example, has progressed much further than Australia in use of phone apps , for payments as low as a few cents.

    So bank branches are dead, except in major city CBDs.


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