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Transcript of questioning of National Australia Bank’s Executive General Manager of Retail Krissie Jones by Senators Gerard Rennick and Peter Whish-Wilson at the first hearing of the Australian Senate’s Rural and Regional Affairs and Transport References Committee inquiry into regional bank closures, held at Sale on March 2, 2023.

SENATOR RENNICK: You mention in your opening statement you say usage has declined out in the regions, here and I assume other regions as well. Has the profitability declined in the regions as a result of the reductions in transactions or ... assuming the profitability has increased, why can’t you reinvest some of those profits back out here in the regions by moving back-end services, phone banking to these regional towns that do drive so much of Australia's profitability?

KRISSIE JONES:  We have been investing as I said in the opening statement in regional Australia. We've had more than $70 million invested over the last three years ... (questioning over where that was invested in, other panel discussion) 


We don't look at it by location by location profitability. Instead what we consider is how we are serving our customers in those locations. 


SENATOR RENNICK:  I guess that's the problem. You are looking at it through the eyes of a spreadsheet or management charts. These people do live by location. It might be semantics for the management accountant back at head office but the reality is for people on welfare and retirees and everyone like that, they literally have to geographically travel from one town to another and that is something that seems to be more focussed on the number of transactions rather than the essential service of banking service that is critical to a geographical region called a country town. 


KRISSIE JONES: Yeah, what we have been seeing over the past five years - pre pandemic - it's been an ongoing trend. The way our customers are banking has dramatically shifted. We have seen a reduction in our foot traffic into branches of about 66 per cent, so significant change. So the way our customers are doing things is different. So in regional towns we are seeing people who might have previously banked in a small town travel to a place like Sale to undertake their shopping, to visit the mechanics, to see the doctor and it’s at that time we also see them doing their banking. So I appreciate we absolutely need coverage across Australia and we have entered into a 10-year agreement with Australia Post who have 3500 outlets across the country, so we have extended the services in terms of face-to-face over that time but of course there are people who we still need to make sure they have adequate access to banking services too.


SENATOR RENNICK:  In terms of the decline in transactions has that been the case for business banking? Small businesses in a town I've been told there are 5000 small businesses here in the shire as well as 2000 farmers, agricultural industries. A lot of those businesses still need to bank cash and withdraw cash daily. Is that something you think that the bank should do or is that something the post office can do? Because knowing the post office can only employ so many people to do the post so at some point you are going to start squeezing services there with all the different banks asking Australia Post one outlet to do the work of four major banks.


KRISSIE JONES: So, we service both our personal customers and our business customers both in branch and at Australia Post. So with businesses, one of the things we introduced is the ability of a business to get business change at Australia Post up to $1000 a day because that was something that we were hearing from customers was really important to continue to have access. So our business customers range through our own branch network but also through the Australia Post offices as well. 


SENATOR RENNICK:  For the local school that has a fete on the weekend they need more than $1000 cash so this is what I am coming to and the feedback I get is that Australia Post can't provide adequate cash facilities in the same way that a bank branch can. 


KRISSIE JONES:  We don't see as many of those complaints that you are referring to. From time to time there might be a specific issue. We work with Australia Post on that individual issue. We have extended our services, for example the $1000 in business change is something we did in response to the feedback we were receiving from our customers. 


SENATOR RENNICK:  Can we get a copy of the services Australia Post does on behalf of NAB and possibly the terms and conditions of those services.




SENATOR WHISH-WILSON: How many staff have lost their jobs through your closures in regional rural and remote ...


KRISSIE JONES: (Speaking over the top of PWW) ... I am really proud of the way in which we approach the opportunities for our team members. In very instance we offer that person redeployment to an ongoing role. That could be ...


SENATOR WHISH-WILSON: In the community?


KRISSIE JONES: So it could be the next branch or it could be a different role. So for example ...

SENATOR WHISH-WILSON: So not necessarily in the community where they ...


KRISSIE JONES: So for example in Sussex Inlet, which we've just recently closed, we have Naomi who will be working from her home to support customers in financial hardship. We have Tracy who will also be working from home .. able to digital servicing through our NAB messaging platform. We redeploy 97 per cent of our colleagues through branch closures and in most cases where we haven't been able to find an appropriate role it's not ... the individual circumstances of that person, rather than not having a role for that person to do. 


SENATOR WHISH-WILSON: The regional taskforce that looked at this issue in the last government, there was a submission from the Financial Services Union that over many years the staff were encouraged to migrate people on to digital platforms and away from face-to-face service. Has that been the strategy of NAB? 


KRISSIE JONES: We have been encourgag ... we have been asking our team to make sure that our customers are aware of all the options available to them. Um, what we saw particularly during the pandemic that was never more important. Here in Victoria we had lots of lockdowns. It was really important that our customers (would or could) access their banking. If they were only able to access their branch there was a risk that either they were unwell and couldn't travel to a branch or that we ourselves were closed because we couldn't staff it due to Covid. So what we saw particularly through that is that customers do have alternatives so we opened up services such as passbook, customers being able to use Australia Post for example, but we also made sure that our customers were able to use digital services and we had an example in fact of a 105yo customer who for the very first time came into open an account so she could use it online because she needed to access her money. It's very important that people have options. 


SENATOR WHISH-WILSON: You mentioned earlier that it's a difficult decision to close branches and it's not a decision taken lightly. Why is it difficult? Is it because you get the feedback that you're getting from places like today?


KRISSIE JONES: Yeah, um, I think, absolutely. Um, these are decision we pine over for a long time. We do talk to our local teams. Often the people providing input into these decisions work in these communities. These are colleagues that we work with that know the communities that people live and work in. So we do take into account a lot of information such as what has happened in terms of what our customers are doing and how they are banking. And that's over a long period - that's over a five year plus period that we look at. But these are difficult ...


SENATOR WHISH-WILSON: So you recognise that these are difficult decisions and that there are mixed views in the community. Not everyone is happy to go online and that some people are going to be disadvantaged - domestic violence victims are going to be disadvantaged cohorts, first nations, a whole range of different people ... How much is it - I suppose it's a difficult question across different branches - but are you able to give us any indications of how much it costs to run a physical branch in a place like Sale. 


KRISSIE JONES: It really depends. There are a lot of factors that go into the cost of a bank branch. So for example, there's the obvious cost of staffing, there's also the cost around property, movement of cash into the location through our cash in transit providers, the technology that goes with it, the oversight ... there are a whole lot of costs and it not the same for everyone at different locations. 


SENATOR WHISH-WILSON: Is it fair to say given you understand there are some consequences to this, that there are disadvantaged customers, you are essentially doing this to put it in technical terms to enhance the present value of future cash flows - you're doing this for profitability reasons - is that correct?


KRISSIE JONES: I think what we are doing it for is really to be where our customers are and unfortunately, the truth of it is, many of our customers are going to other locations to do their broader, um, do their grocery shopping, as I said to see the doctor, um, and so we need to be in the places where our customers are going to be. 


SENATOR WHISH-WILSON: Right, so you're saying there's not going to be regional ... 


KRISSIE JONES: There are less transactions and less foot traffic in some of these towns unfortunately.


SENATOR WHISH-WILSON: I've had a look at your website too, and your corporate ethos and I presume you've been there long enough to feel this ethos, is that National Australia Bank is more than money, it's about more than money, so I'm presuming it's also about the customers and about communities and about the environment and other things, can you see why people are upset with banks such as yourselves, because it does very much appear to be all about money and not providing those community services or obligations to communities?


KRISSIE JONES: Yeah, I do understand the very different points of view and absolutely, as I have said, these aren't easy decisions to be making but the fact is our customers are doing things differently and we need to stay relevant to our customers.


SENATOR WHISH-WILSON: You're driving customers doing things differently. Correct? There's been a very deliberate strategy especially over Covid to get people online, get them on to digital and discourage them from coming into the banks ...


KRISSIE JONES: We don't want to discourage people to come in but we want to make sure there are option available to them. 


SENATOR WHISH-WILSON: How do you do that when we found out today that you don't actually really consult with the community. You say you do consult with your customers? 


KRISSIE JONES: Ah, so, um, what we do is we undertake a review of a location and we do that ongoing. And we're always looking at how we reshape our network to reflect where our customers are banking and we take input from our local teams. But a few years ago we did undertake a listening tour across regional Australia which included 13 different towns. One of those was here in Sale, one of the listening sessions, that was done by senior executives and we listened to more than 400 community members across the listening tour and based upon that feedback we made changes to the way when we do make the decision to close we have put in places changes, such as the business change example I mentioned earlier to make sure we were responding to that feedback. 


SENATOR WHISH-WILSON: And then you accelerated this over Covid? Branch closures over Covid?


KRISSIE JONES: We have had periods where we have stopped branch closures in regional locations due to drought or other matters but during Covid we did make closures but that was across metropolitan and regional locations.


SENATOR WHISH-WILSON: Last question, is your remuneration as an executive Krissie, is that tied to, for example, closures of retail outlets in rural, remote and regional areas.


KRISSIE JONES: Like anyone at NAB, my remuneration ... is based on ... certain measures (audio unclear)


More to come.

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