The NAB Exclusively Promotes Digital Transactions

Over-the-counter transactions at NAB have decreased 70% since 2015. The BIG Four banks have actively discouraged people from withdrawing cash over the counter in the past several years. By training customers in this way, the banks have been able to produce a ‘shock and awe’ figure of 99.95% reduction in cash transactions.

Sounds incredible, yet that’s exactly what it is. It isn’t so much a shift away from cash by the public – it’s a shift in behaviour by the banks.

The banks have no idea how many people are using cash. They don’t see cash transactions. They are actively discouraging the use of cash, then coming out with statements that people don’t want to use cash, which is just plain wrong.

According to many constituents, if a customer goes to a branch of the NAB to use the counter services, there is a high likelihood they will be shown how to use the ATM. The NAB says that’s because they need to know and be fully aware of the alternative options. In June, the NAB is pleased to report they saw 96% of customers making digital transactions. How many of those were walked outside to do that?

Mortgage applications are now being conducted remotely by 40% of customers. Pre COVID the figure was zero, yet post COVID the NAB has found that customers are very happy to take up the digital services for buying a house. The NAB report that a massive shift has occurred over the last few years. Social distancing and lockdowns furthered their digital goals.

The NAB’s reported 99.95% less cash payments is just for bank transactions within the bank itself. All real-world cash transactions are an unknown figure. Customers still need to go to the bank though to withdraw their money to use it in their daily lives. How hard is that becoming?

Ross McEwan, CEO of the NAB, says there are thousands of ATMs available to do this freely, and also acknowledges that Australia is a large country. The NAB says it looks at a range of factors when making decisions to close branches, including feedback from staff members and what is happening in the community where it has invested. How much of that is about listening to customers’ needs?

Transcript

Senator ROBERTS: Thank you for appearing today. Your submission includes this statement: ‘Banking transactions made over the counter at NAB branches have decreased by 70 per cent since 2015.’ Is that a 70 per cent reduction in actual transactions; and, if so, what are the figures for, firstly, total over-the-counter transactions in 2015 and, secondly, total over-the-counter transactions now?

Mr McEwan: I’ll ask Krissie Jones to address that question.

Ms Jones: I’ve got the data from 2017 in front of me. We understand that, in 2017, there were 35½ million over-the-counter transactions through our branch network. Certainly, there has been a large reduction over the period since then and, at the conclusion of this year, we expect that there will have been a 71 per cent reduction. We’ve seen a massive shift over the last few years with our customers starting to use digital services. In fact, in June, 96.5 per cent of interactions were digital ones.

Senator ROBERTS: According to reports made to my electoral office, if one of my constituents goes into the NAB to conduct an over-the-counter transaction, it is likely that the teller will march that customer out to the ATM in front of the bank and make them conduct their business there. Does your 70 per cent reduction figure compensate for increases in the use of ATMs in front of your bank?

Mr McEwan: First off, we should probably look at the circumstances in which a customer is shown how to use an ATM. It also depends on the branch structure that we have, as we’ve got a number of branches that are open for standardised hours, which will probably be three hours a day, and the staff member may have shown the customer how to use the services 24/7. But I’ll pass over to Krissie because, again, she runs the network and is very familiar with what staff are being asked to do, in training and developing customers and showing them odd services. Krissie, maybe you could talk to the senator on that one.

Ms Jones: Yes, sure. We want to make sure that our customers are aware of all of the options that are available to them. If they want to conduct their banking in a branch, then we would welcome them using the over-the-counter services. But we want to make sure that, for those examples of when a branch isn’t open, they know of the alternative options. Over the last few years, we’ve added in new functionality to be able to deposit a cheque on your phone from the convenience of your home. So we really want to make sure that customers are fully aware of all of those alternative options, whether it’s phone banking, digital banking options or Bank@Post. But, of course, if a customer wants to come in and talk to their local branch team member to do their transactions, we welcome that too.

Senator ROBERTS: This is a quote from your submission: ‘Only three per cent of our personal banking customers exclusively use our branch network to conduct their banking.’ Could you define ‘exclusively’, please. Does one ATM withdrawal or one call to report a stolen card constitute the loss of ‘exclusive’, as in ‘did not exclusively use over-the-counter services’?

Ms Jones: We do publish some of this information in our FAQ sheets as well, but our definition of ‘exclusive’is really about when a customer walks into the branch. So ‘exclusive’ would be a customer who comes in and only uses that branch for their transactions; it would not include things like the use of ATMs or other services, such as digital transactions.

Senator ROBERTS: So, if a customer used a bank for over-the-counter services every time, except for one call to inquire about a bank card, would that mean that they do not exclusively use over-the-counter services?

Ms Jones: It’s a rolling period and so it would be that, in that period, that wouldn’t be the case. But we look at it over different rolling periods.

Senator ROBERTS: You say here, ‘Only eight per cent of our business banking customers exclusively use our branch network to conduct their banking.’ That’s one in 12, which seems a lot to ignore, doesn’t it? Asking that same question again, does the same definition of ‘exclusive’ apply?

Ms Jones: Yes, it’s the same definition of ‘exclusive’. For both our personal customers and our business customers, I think we are seeing a really big shift in the way that they’re transacting. As I’ve said, in June, we actually saw digital transactions occurring with 96 per cent of our customers. So there really has been a very big change. Also, we are seeing more of our business customers starting to use alternatives as well.

Senator ROBERTS: This is another quote from your submission: ‘Over 40 per cent of home lending appointments are held via videoconference.’ That means that 60 per cent are not using videoconference; is that
correct?

Ms Jones: Yes. We offer a range of ways in which our customers can take out a home loan with us. They can go onto our website to find an appointment that is the most convenient for them. That can be in their local branch or over the phone; it can be with a banker coming to their home or their workplace; or it can occur by video. What we are seeing, even just in the last week, is more than 60 per cent happening over the phone or via video. But a large proportion of customers still want to come into a branch to undertake that conversation with the banker.

Mr McEwan: Just to give you a feel for the rapid change in those numbers, I can say that, pre-COVID, that was zero; we did not have that facility available. Today, as Krissie has said, these stats were put at 40 and, in the last week, that has gone even higher. So customers are very happy to take up those services, and it doesn’t matter whether they are regional or city-bound customers.

Senator ROBERTS: I quote again: ‘99.95 per cent of all payments made by or received by NAB customers were made digitally in 2022.’ Does that include when a person ‘beeps’ to pay for a coffee, petrol and the minutiae of everyday life?

Mr McEwan: Yes, it does.

Senator ROBERTS: If I withdraw cash from an ATM and spend that cash in a farmers market—in fact, I am noticing an increasing number of small retailers asking for cash payments—how would you know that I’ve paid with cash or not?

Mr McEwan: By way of a retail transaction?

Senator ROBERTS: Yes.

Mr McEwan: If a person paid cash, we would not know.

Senator ROBERTS: That’s right.

Mr McEwan: What are you asking for help on with that one? When people have paid with cash at a market or out in society, we have never known what those numbers were.

Senator ROBERTS: So what is the statistical basis for the 99.95 per cent figure, when you have no idea of what your customers are using cash for?

Mr McEwan: No. That 99.95 per cent figure of the transactions that come through our bank are done digitally; that is, the ones that we’re aware of. The definition of that stat hasn’t changed, as we’ve never known
what was going on with a trader or a person at a market who is taking cash for goods. Those stats have never appeared in our stats.

Senator ROBERTS: I made this same point with Westpac, I think it was: so we don’t really know what people are using cash for, but people want to use cash outside of the banking transaction.

Mr McEwan: That’s correct. Yes, you’re absolutely right: I do not know what you use your cash for and you don’t know what I use my cash for. But the point that we’re making is that 99.95 per cent of those interactions with the bank are now done digitally, and that doesn’t preclude customers doing what they like with their cash.

Senator ROBERTS: So 99.95 per cent of payments with NAB might be digital. With customers exchanging money with other customers, we don’t know what it is.

Mr McEwan: No, that’s right. Again, that’s not a service that I provide. Your paying cash to somebody else is not a service that I am involved in; it’s a service that they do themselves.

Senator ROBERTS: No. But for me to pay someone else cash, I need to come to NAB to get the cash.

Mr McEwan: Yes, or you could go to 4,000 ATMs around the country that I pay for you to use and they’re free to you, or you could get the money out at a branch or at 3,400 Australia Post outlets; they will give you the cash.

Senator ROBERTS: Cash is still important. So, on the face of it, your regional banking hubs are a good idea. I assume that these centres are there to handle face-to-face transactions with people from areas where a branch has been closed. You mentioned Emerald in Queensland, where I used to live some years ago. Can I ask: what is the catchment of that Emerald bank, please? How far away are the areas that it is designed to service?

Mr McEwan: We’ll have to look at that. Krissie, do you know the Emerald catchment at all?

Ms Jones: I do, but I want to make sure that we’ve got the facts right, so perhaps I could come back to you on that. We do have surrounding branches to Emerald. As well as our branch in Emerald there are Bank@Post facilities.

Senator ROBERTS: It looks to me as though the next branch, heading west from Emerald, is Longreach, which is four hours away. Is that a good indication of how far apart these regional branches are?

Mr McEwan: The regional branches will be quite different; some may well be at a shorter distance than that and others will be a longer distance apart. As you know, Australia is a huge country. But the point there is that there is a very large number of regional Australia Post offices that people can get to as well, which will service those needs.

Ms Slade: Krissie, you might want to talk about the things that we look at and take into consideration, such as where customers are travelling to already and the other branches that they’re using.

Ms Jones: When we’re making investment decisions or the decision to close a branch, we look at a range of factors, which include: where are our customers shopping; where are they banking; where are they are travelling to, whether it’s to see the doctor or the mechanic; and where do we need to invest to support them? So there’s a range of things that we take into consideration when we’re not only making investments but also making the difficult decision to close. We also seek input from our staff on the ground. We have a large number of colleagues—around 2,300 across NAB—who work across regional Australia, and many of those are bankers who face customers every day. That may be in retail, or it may be in regional and agri, which is where we have over 774 bankers providing services in those areas. So we listen to feedback from our staff members as well about what’s happening in that community, what’s most relevant for that community and what’s the way in which we can shore up in order to serve them as well.