Westpac should have been fronting up at the second hearing of the Senate inquiry into regional bank closures in Cloncurry this morning but after the beating it took during the first hearing at Sale in March, it appears it was not prepared to face an angry mob in a town where it was planning to close its local branch.
In an RSVP to its invitation to appear published by Senator Gerard Rennick last week, Westpac declined to attend saying it had said everything it needed to previously.
“We appreciate the Committee’s invitation to attend the second public hearing in Cloncurry, however, Westpac doesn’t at this stage have further information to provide over and above that imparted in the first public hearing in Sale, our answers provided to questions on notice, and our detailed submission which included an update on our most recent ATM expansion announcement,” it said.
In the next breath it revealed it was back-flipping on its decision to close the Cloncurry branch as well as another seven around Australia that had been put on pause while the inquiry was underway.
“For the Committee’s awareness, we have today advised the Councils and stakeholders in each of the eight locations where our branch closure decisions were paused, that Westpac will be keeping these branches open (i.e. the decision to close is reversed), and that we are currently negotiating lease extensions in each location. This includes Cloncurry and Ingham,” the letter read.
It was a remarkable decision, something that it would be safe to say a big four bank has never done before.
The reversal of eight decisions to close branches shows what can be achieved when there is political will and a few senators who are on the ball enough to not let the banks get away with the sort of spin they have been sprouting through the media to justify the withdrawal of banking services from regional communities.
But if Westpac hoped that this move might keep them out of the headlines this week after the good press they received following the announcement, they may be disappointed.
It has presented an ideal opportunity to have a close look at the grilling its executives received at Sale and remind readers that this is the bank with the worst track record leaving communities without banking services.
Westpac is now cutting into the remaining quarter of its regional network, having closed nearly 600 branches outside the capital cities since the 1970s. Along the way it has sacrificed branches to alternative service models that barely lasted a handful of years afterwards and been merciless in closing the last banks in towns.
This behaviour has continued right up until this decision, with the communities of Carnamah and Coober Pedy left with journeys of hundreds of kilometres to get to their next banks just a matter of weeks ago.
Westpac even closed the Carnamah branch in full knowledge that there was no disabled access into the local post office, the only other place in town that people could access basic banking services.
Hay, Moree, Port Douglas and Katherine have also been forgotten in the excitement, all losing Westpac branches since the senate inquiry was announced in February.
Westpac has copped a lot of criticism over the years for this sort of behaviour without batting an eye, so why this decision now on the eve of the bank having to step back into the witness stand?
It’s been 20 years since a senate committee looked at bank behaviour in regional Australia and the first time ever that the welfare and economic impacts have been specifically included in the terms of reference of an inquiry.
Unlike the watery “Taskforce into regional banking”, the senators on this committee are not there to curry any favours or push their own agendas and this was apparent from the opening moments at Sale.
Westpac was the first to present and Chief Customer Engagement Officer Ross Miller read a prepared statement, opening with the line, “access to banking services is critical to economic and social development”.
“At Westpac our priority is always to offer our customers the best, most accessible service we can in both metropolitan and regional areas,” he said.
He then went on to reveal however, that Westpac has a “digital first” policy and blamed customers for “driving” the move to online banking, a claim being echoed by the other major banks citing figures that only tell part of the story.
Mr Miller’s biggest mistake was rolling out the same tone-deaf lines dished out to media when a branch is closed at a senate hearing.
“While the reduction in branches is something that has occurred across the entire sector, we recognise that in regional areas the impact is felt more,” he told the senators. “That is why we closely consider each and every decision about the future of our branches. The decision to close a branch is not made lightly, especially in regional areas. We consider a number of factors such as branch usage, customer demographics, location and proximity to other banking services, particularly our Bank@Post partnership service.”
He finished with his second biggest mistake: “I thank you for your indulgence and welcome your questions.”
Chairman Senator Matt Canavan: Can you take us through the process you went through before making the decision to close the Sale branch? I realise I should recognise and welcome the fact that you have held that off in response to our request, and we appreciate that. But going back to that decision to close Sale, what happened? What did you do beforehand to speak to the local community before making a decision to close the branch here?
Mr Miller: We have a rigorous process around making any decision to change our operations across the Westpac Group. In the case of a physical branch, we consider a number of factors …
Senator Canavan: Had you or anyone in your team spoken to the local council or other business groups/representative bodies here in Sale before making the decision to close?
Mr Miller: In our process when we determine we are going to move to close a branch we don’t engage with those stakeholders before announcing that to them.
Senator Canavan: I find that strange, because in Westpac’s submission to the Regional Banking Taskforce, in speaking about decisions to close local branches, Westpac stated: “These decisions are never made lightly. They’re made after careful consideration and consultation, usually in response to declining customer attendance”.
What does the word ‘consultation’ mean, then, if you’re not speaking to anyone locally before making the decision to close?
Mr Miller: We’re using the data that we have about branch usage as our primary position for making the decision around the branch. I run a very large business. We have the second biggest retail network across Australia. I also rely on the advice from my state general managers and their understanding of the local areas, and we take that all into account.
Senator Canavan: When was the first time Westpac spoke to the local council around the closure of the Sale branch?
Mr Miller: We notified the local council in parallel to the—
Senator Canavan: By email?
Mr Miller: In this case we did it by email. This was one of our reflection points. We’ve already looked at that process. We were responding to feedback and decisions made at the Regional Banking Taskforce as to ensuring we were engaging with local councils and not just the state and federal MPs. I think in hindsight, looking at that process, we’ll be changing that from simply an email to an actual conversation with those local councils.
Senator Canavan: Is that commitment for a conversation before a decision is made or just a notification that a decision is made?
Mr Miller: At this stage we would be making it to communicate that the decision has been made. But as you pointed out, we’ve postponed the decision in Sale and seven other branches that we announced this year. We’re using that time to ensure that we review our process and review this decision we made about Sale.
Senator Canavan: My understanding is that you met with the council this morning; is that correct?
Mr Miller: They met with Mr Green. (Jason Green, National General Manager Operations and Effectiveness, Consumer Customer Engagement)
Senator Canavan: That’s the first contact you’ve had with the council around the decision to close?
Mr Green: Yes.
Senator Canavan: So, you’re only speaking to them because we’re here and having a Senate inquiry?
Mr Green: I spoke to them as we were in town. As part of my role, I don’t notify the councils or federal government or state government. That’s not part of my role. Given that we’re in town, we took the opportunity to meet with the council, reflect on the fact that we advised them in writing around the original decision, and assured them as we move forward and reconsider the decision and work through the postponement of the Sale branch that we’ll be continuing to communicate with them.
Senator Canavan: Are you or anyone from your team going to physically go to the other towns where branch closures are prospective—Ingham, Cloncurry, Tully? Are you travelling there at some point to speak to those communities?
Mr Miller: For all of the locations we have one of our state general managers or regional general managers attend the branches during the transition period. In regional—
Senator Canavan: No, my question is not about the branches. My question is: are you going to speak to the local councils and community in those towns, and physically go there? Do you plan to do that?
Mr Green: I don’t plan to do that.
Senator Canavan: Do we need to have a Senate inquiry in every one of these towns so you can do that? You make billions of dollars in profits a year. Why can’t you travel to a local country town and talk to them about a closure? Why can’t you do that?
That exchange set the scene for an interrogation Westpac would not get over in a hurry.
Senator Gerard Rennick took the bank on over the profitability of the branches that were being closed, the cash transaction component of figures the bank was quoting to base closure decisions on and limitations of the Bank@post service.
Senator Raff Ciccone wanted to know if over-the-counter transactions were declining at the same rate in regional area as in metropolitan areas, a question the bank has failed to answer even in its question on notice response.
Senator Peter Whish-Wilson honed in on Mr Miller’s reference to customers driving the move away from face-to-face banking and questioned whether this behaviour change had been engineered by the bank.
Senator Whish-Wilson: You’ve framed it up today as it’s been customer preferences that have driven this move to digital, this transformation that’s happened across the bank. You’ve mentioned several times that you were part of the Regional Banking Taskforce. The Finance Sector Union’s submission to that taskforce gave a number of accounts of staff who said it had been a deliberate strategy of Westpac over many years to convince customers to go online and not use the face-to-face channels. What are your views on that? Has this been part of a corporate strategy that’s been driven at the heart for cost savings?
Mr Miller: I stand by the comments I made in my opening remarks that customer preference is increasingly to use channels other than our physical channels.
Senator Whish-Wilson: But you’re driving that, aren’t you?
Mr Miller: It’s not isolated to banking. It’s all walks of life, the way we interact. What we’ve done throughout recent years is ensure that we’re equipping our people to be able to coach and support our customers as they adopt digital banking. We do that so that, when people come into a branch, particularly if they’ve had to travel to a branch and it would have been more convenient for them to do something themselves remotely—we think it’s not only our obligation, it’s a customer service positive—we’re able to show and educate people how to use our digital services.
Senator Whish-Wilson: But at the heart of that is the corporate strategy to reduce costs and to transform your business and transition to using digital strategies. From your tellers through to your management chain coming up to you, Mr Miller, how are you incentivised in terms of your remuneration package? Do you get bonuses based on cost savings and the profitability of your division?
Mr Miller: I’m remunerated to provide good customer service to our customers. My role is the Chief Customer Engagement Officer. I do think taking the time to improve the experience of our customers by being able to coach and demonstrate how our digital services work is a critical part of what we do. It’s a requirement in our banking services.
Senator Whish-Wilson: You do say on your website that helping people is at the heart of your corporate values. What do you say to the people here today and the many who made submissions to the regional task force and have contacted the Senate that are customers of your banks and others that are unhappy with the fact that you’re closing that human interface that they’ve grown up banking with all of their lives? What do you say to them?
Mr Miller: For those Australians who feel that way, that’s why we’re participating in this hearing. We want to hear from them. We want to respond. But we also want to make sure that we’re opening up as many channels as we possibly can for our customers to be able to do banking with us.
Senator Richard Colbeck doubled back on Senator Canavan’s questioning about the consultation process before a decision to close a branch is made.
Senator Colbeck: So you decide yourselves what the alternatives might be and then put them on the table? Because you’re not consulting with the community as part of this process. Effectively, from what I can understand of your evidence today, the only people you’re consulting with are yourselves. So you look at what’s happening within the branch, decide how you might alternatively provide the service and then deliver a decision to the community?
Mr Miller: That’s currently the way; you’re right. That’s currently the way that we reached the decision. We have incredibly strong insights and data around our customers and their banking usage. We are using that to primarily determine the decision. Again, if we use the example of the eight branches where we’ve postponed, there is an opportunity for us to review that process and think about whether there are different ways of doing it. But at this point we do not have a community consultation step before the decision has been made to close a branch.
Senator Colbeck: But if you’re not talking to the community, how do you know what the community’s view is?
Mr Miller: As I said, I’m fortunate that I have a very experienced team reporting to me. They’ll be able to give me any local insights that are particularly relevant. But we are making a decision based on our customers’ usage and how we can service our existing Westpac customers.
Senator Colbeck: But if the communities were happy with it, why are we sitting here? It would appear to me to be a pretty obvious question. We’re getting representations from all over the country about this. You’re telling us that the community’s okay with this, and yet they’re all sitting here in the audience and making representations to us as small communities all over the country. I’m not sure how the two things line up.
Mr Miller: I’m not trying to make an assumption as to what the community’s opinion is about the decisions we make. What I’m explaining is the way that we make a decision around branch operations. Particularly in regional areas we have a long transition period where we’re able to work with our customers and educate them around the alternative channels they’re able to use. In particular, we’ve talked a lot today about Australia Post and what can be done there, but also the digital channels, the virtual channels and, as I said, the increasing uptake of our video channels.
Senator Colbeck: It really sounds to me like you’re trying to drive interactions with the business in a certain direction, and theme of your statement this morning is around digital. I understand that. I get that. But it’s not necessarily about consultation and choice, it’s about where the bank wants to go with its business and how it wants to provide a service. And in some circumstances, as Senator Rennick has indicated, those services won’t be available because they’re not provided through the alternatives.
Mr Miller: We have a Digital First customer strategy, as I explained. As far as how we support our customers, we’re investing significant amounts of money in digital and virtual channels. But we will always have branches present where it makes sense for us to have a branch.
Senator Colbeck: That’s your judgement, not necessarily the community’s judgement, because you’re not consulting communities about what services they actually want, you’re determining what you might provide based on your consultation with yourself, not with the community.
Mr Miller: Would you like me to answer that?
Senator Colbeck: I think that’s a Tony Jones answer.
Senator Whish-Wilson jumped in again at this point.
Senator Whish-Wilson: There are certain cohorts in the community, like domestic violence victims, for example, with financial coercion. It’s quite important for them to be able to physically access a branch and speak to a teller. I had a coffee this morning outside a branch. There was a fellow who looked to be homeless. I don’t know. I presume he was. He said to me, ‘Do you know what time it is?’ I said, ‘It’s 9.30.’ He said, ‘Good. The bank’s about to open’, because he clearly needed to go in there. He didn’t have a phone. He didn’t have any money. He needed to access that branch and the person in there. That’s actually a true story. There are people who do physically need a branch, but that clearly hasn’t been part of your decision making?
Mr Miller: There are many customers that potentially could benefit from seeing someone face to face where we’ve never had a branch or there aren’t branches available. Particularly when it comes to serious issues that customers need to discuss with us, such as domestic violence, we have other ways they can do that, particularly through our telephone banking services.
The last word went to Senator Canavan.
Senator Canavan: I’m leaving here today thinking the consultation that you’re committing to is a Clayton’s one, that you’re not serious about two-way communication. I’ll obviously have more to say. I’m sure we’ll have you back during this inquiry.
(‘OHHH NO YOU WON’T SENATOR CANAVAN’, the pantomime audience yells back in reply.)
By the end of an hour-long excoriation that went 30 minutes over time, Mr Miller appeared shaken and red in the face. It was undoubtedly a public humiliation. The Westpac representatives left the room and did not return so were not there to hear the Finance Sector Union’s Wendy Streets later tell the senators that she believed the tactics used by banks to move customers onto digital platforms amounted to harassment.
So at this stage we have two inquiries for eight saves. Much better statistics than the Regional Banking Taskforce’s loss of 92 banks in nearly as many days after its final report was released.
What a shame the senators can’t meet in every regional community that is losing a bank.
This article appeared on The Regional on 17 May 2023.
Related stories: Commonwealth Bank breaks pledge to pause regional bank closures; Senate inquiries are serious business and no place for spin.
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