23 July 2024
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Our banking future will be cashless and digital

Peter Switzer
30 January 2024

It’s a sign of the times as Bankwest is set to close three more WA branches after closing all its east coast stores, and while it should not be a big issue for digitally-savvy young people, older Australians might have to change banks or embrace the new age.

Finding a new bank in coming years will become increasingly difficult, with Matt Comyn, CEO of the CBA, which owns Bankwest, telling us that the bank will eventually be all digital.

The Daily Mail says that right now Bankwest has 1.1 million customers across the country and has cited a ‘surge in digital transactions and the rapid decline of demand for cash services’ as the reason for the decision.

As another sign of the future, Scott Spittles, the bank’s general manager of personal banking, told a Senate inquiry that “Bankwest's strategy is to grow as a digital and broker-first bank for home buyers.”

He added that over-the-counter transactions have declined by around 44% in the last three years, while digital payments now account for 97% of all transactions and his over-arching boss, CBA’s Matt Comyn he told the inquiry: “Bankwest is moving to predominantly and probably over time almost solely digital only”.

Comyn valued the provision of cash to customers at $400 million or $40 for each of the CBA’s 10 million customers.

This comes as some Bankwest customers, especially in rural areas, are being told to use the Post Office to withdraw cash.

Experts say Covid sped up the transition to a more cashless society, with the Daily Mail reporting that the use of digital wallet payments on smartphones and watches has soared from $746 million in 2018 to more than $93 billion in 2022!

And by the end of 2022, cash only accounted for 13% of Australian consumer payments, compared to 70% in 2007.

RMIT Associate Professor in Finance Angel Zhong looked at the major concerns of going cashless for The Conversation website and here they are, courtesy of the Daily Mail:

  1. It can leave out older Australians or others not digitally connected.
  2. It relies on internet coverage and reliable connectivity.
  3. Some areas of the cash economy will suffer, such as charities, buskers, and beggars.
  4. 'Hidden' fees that come with digital transactions.
  5. Hacking and scams could escalate — estimates say Australians lost more than $2 billion to online scams in 2021, but the true figure could be much higher due to many incidents going unreported.
  6. Lagging legislation could disadvantage many consumers.
  7. Losing the value of money and less social interaction.
  8. Loss of independent spending power, which could affect those with abusive partners.
  9. Your spending can be tracked, which the ATO and criminals could find valuable.
  10. Loss of your and freedom of choice that could have wider and unseen implications.

The bottom line is that the future is digital, whether you like it or not!

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