More banking hubs to help customers where banks have closed

More parts of the country are set to get regional banking hubs, as the New Zealand Bankers Association expands the programme.

The regional banking hubs provide smart devices and phones to help customers, without the infrastructure of a traditional branch.

Increased interest in banking hubs comes as the fate of the traditional bank branch seems uncertain.

A KPMG report released in March found there were 144 fewer retail bank branches in New Zealand in 2021 compared to 2020, with 84 branches disappearing between 2019 and 2020.

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The banks participating in the regional banking hubs trial, ANZ, ASB, BNZ, Kiwibank, TSB and Westpac, have committed to not closing any further regional branches until the end of the trial next year.

The regional banking hub trial program will double its numbers from four to eight hubs.

Existing hubs in Martinborough, Ōpunake, Stoke and Twizel will take on improvements suggested by customers such as a bank employee one day a week, or a bookable video conference service.

New Zealand Bankers' Association chief executive Roger Beaumont said the impact of the trial so far had been difficult to measure due to interruptions of Covid-19.

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New Zealand Bankers’ Association chief executive Roger Beaumont said the impact of the trial so far had been difficult to measure due to interruptions of Covid-19.

The four new hubs in Whangamatā, Ōpōtiki, Tūrangi and Waimate will have a Smart ATM, cash change services, a full-time dedicated concierge, and private areas for phone and internet banking.

New Zealand Bankers’ Association chief executive Roger Beaumont said the impact of the trial so far had been difficult to measure due to interruptions of Covid-19.

“With major changes in customer behavior accelerated by the Covid-19 pandemic and regular changes in alert levels. We intend to run the next phase until the end of 2023, to give these dynamic changes time to pan out,” Beaumont said.

Massey University​ banking expert Claire Matthews​ published a study on the effect of branch closures on small rural towns in the 1990s​, a decade in which 40% of all bank branches shut.

The study found the impact was smaller than expected, with people compensating by switching to phone banking and eftpos.

Massey University​ banking expert Claire Matthews​ says the “impact of branch closures can be overstated.”

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Massey University​ banking expert Claire Matthews​ says the “impact of branch closures can be overstated.”

“The impact of branch closures can be overstated,” she said.

While initially uncertain about the NZBA’s regional banking hub proposal, she said its new direction, with a greater focus on human interaction, would better serve regional communities.

“The branch is not the be all and end all, as people don’t actually visit branches very often. But sometimes they need to do talk to people, to an expert, but you don’t need a branch to do that. I think this new way of operating will actually be very useful,” she said.

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