Banks are closing their doors on communities who need them the most, as vulnerable people in rural Australia are less likely to have the money and skills to access online services, research shows.
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More than a third of people in regional areas experience affordability stress when paying for high-quality internet, affecting their ability to buy other essential items, according to a report led by RMIT University.
The report showed 36 per cent of people in outer regional areas spend more than five per cent of their household income on internet access, a higher level than those in the cities.
The share of people who need to spend more than 10 per cent of their income to access the internet is also higher in rural and remote Australia.
"For many in this cohort, a reliable internet connection is beyond their economic reach," the report by the ARC Centre of Excellence for Automated Decision-Making and Society said.
"More people in these areas will have to rely on cheaper and less capable services, intermittent service, or a complete lack of connectivity.
"Therefore, regional bank closures remove face-to-face services in precisely those geographic areas where there is a higher need for such services."
The analysis of the Australian Digital Inclusion Index data also showed the gap in technological ability between city and regional residents is pronounced, especially among older people.
First Nations communities are particularly vulnerable after local banks close, with poor connectivity, lack of access to cash and concerns of elder financial abuse in remote areas.
The research has been submitted to the Senate inquiry into rural bank closures, which is due to sit in Kingston SE in South Australia next week.
"The uneven social and geographic distribution of digital inclusion in Australia should be taken into account when supplementing (or even replacing) bank branches with digital services," the report said.
The long-running inquiry has been examining the effects of increasing rural bank closures.
Nearly 800 country branches have shut since June 2017, with some regional residents forced to travel long distances to manage their finances.
Leaders of all of the major banks told the inquiry the rapid uptake of digital banking and decline in cash transactions have made branches less viable.
NAB was criticised for closing operations in Lithgow and Oberon, in central western NSW, this month.
"I don't think these banks have a real understanding of the distances that country people have to travel if they want to access a branch," the region's federal MP Andrew Gee said.
"There is little thought given to seniors and vulnerable customers who don't have access to transport.
"They have a very city-centric attitude."
Australian Associated Press
