Banking hubs: 'A very small response to a major issue'

Wednesday, 2 October 2019

Politicians and campaigners say banks need to pay more attention to local communities affected by cuts.

New Zealand's biggest banks joined forces this week to trial new 'hubs' for regional customers, following a backlash against a growing number of branch closures across the country.

The new hubs, which will open in Stoke, Martinborough, Opunake, and Twizel early next year, will feature 'Smart ATM' machines, 'a support person', and online and technology support, according to the NZ Bankers' Association.

The initiative comes as banks attempt to keep down costs and maintain goodwill with provincial communities. Small towns have expressed anger about shrinking branch networks and access to customer service staff.

The hubs will offer 'basic transactional services' to customers, including cash withdrawals, deposits, and account transfers. During a trial period, major banks will also halt regional branch closures — with the exception of Kiwibank and NZ Post's shared sites.

* Kiwibank closing two Christchurch branches as NZ Post split continues

* NZ Post branches are closing because they just aren't used enough, says MP**

While hubs might solve some banking issues for regional towns, politicians and campaigners say banks need to pay more attention to local communities affected by cuts. They say local branches still matter, despite the growing use of technology.

The hub initiative received a tentative thumbs up this week.

'For consumers in communities that don't have a bank branch, the move will be welcome,' says Jessica Wilson, head of research at Consumer NZ.

Wilson believes most Kiwis want access to a proper local branch: 'Despite the growth of online banking, many people still rely on doing at least some of their banking at a local branch, and want this as an option.'

Yani Johanson, a Christchurch city councillor, campaigned against the closure of a Kiwibank/NZ Post branch in Linwood. Johanson is 'supportive' of the new hubs, but says the idea doesn't go far enough.

'It's fantastic that something is being done to support those areas. The idea of using a public space, like a library, makes sense.' Johanson says.

'But in reality, it's a very small response to a major issue. Having a physical [banking] presence and being able to meet with people is very important, not just for rural areas, but for urban communities like Linwood.'

Johanson is frustrated that banks do 'very little' to keep communities informed about branch closures.

'There seems to be very little regard for communities, in terms of going through the solutions. Areas can really suffer as a result of these closures,' he says.

Johanson says 'lower socioeconomic' urban areas, where customers may not have access to high-speed internet, are increasingly affected by branch closures.

'It builds a feeling that people in areas like Linwood aren't important,' he says. 'The last thing you want is disaffected communities. Banking is a basic right.'

Advocacy group Grey Power, which campaigns on behalf of the over-50s, has fought against the closure of NZ Post and Kiwibank's branch in Stoke, Nelson. Stoke is one of four towns to receive a new hub, but Grey Power's Kevin Gardener does not think it will 'replace' a proper branch.

'Initially, it looks fantastic, but the devil is in the detail,' Gardener says. 'The Prime Minister and Finance Minister say the hub will have basic services, but that sounds like an employee standing around an ATM giving tutorials on how to use the machine,' he adds.

Gardener says customers across the country will still face huge journeys to access services like home loans and business banking. He believes 'a lot of young families', and those in rural areas, will be hit by cuts.

'It's not just the elderly,' he says. 'A lot of families don't have access to the internet, particularly on the west coast and in country areas.'

Nelson MP Nick Smith supported the petition to keep Stoke's Kiwibank branch open. The National MP believes the Government needs to provide stronger support for the regions.

'The coalition agreement promised to expand public services in the regions, and Shane Jones has criticised privately-owned banks for withdrawing regional services while remaining silent on NZ Post and Kiwibank doing just that,' Smith says.

Smith says he's 'very positive' about the new banking hubs, as talks continue with lenders: 'My hope is that they promote independence, and provide a service to help people with modern technology-based banking.'

He believes banks need to be more 'mindful' of vulnerable, elderly communities: 'There's a growing group of elderly people who are struggling with change, and they can end up isolated,' he says.

As the new initiative prepares to launch, Smith hopes the banking sector and government will pay closer attention to local communities in the future.

'Had there been a consultation with the people of Stoke, we would have come up with a solution like a hub, without all of the drama and uncertainty,' Smith says. 'It could have been managed better, but at least we're heading in the right direction.'