Regional banks say the big four and Bank of Queensland are retreating from rural branches, then circling back with a move that could squeeze the players left behind. A proposed industry trial of 20 fee-free ATMs in non-metro locations looks helpful on the surface, yet small lenders argue it undercuts their already thin margins.
Regional advocates frame it as a classic case of powerful incumbents reshaping a market they partially abandoned. They warn regional customers could be left with fewer real choices, not more.
Under the proposal before the Australian Competition and Consumer Commission, major banks would jointly fund 20 shared ATMs outside Australia’s cities, removing withdrawal fees for customers. The Regional Banking Investment Alliance has lodged a submission opposing authorisation, arguing the coordinated scheme would destabilise small bank economics in affected towns.
Industry body Australian Banking Association is steering the initiative on behalf of participating majors. Commonwealth Bank and Macquarie stand apart, declining to sign onto the trial at this stage.
Regional Banking Investment Alliance characterises the move as predatory pricing enabled by the financial firepower of Australia’s largest banks. Small authorised deposit-taking institutions rely on surcharge income and branch-linked services to justify maintaining physical access points.
A cluster of heavily subsidised fee-free ATMs could pull transaction volumes away from local lenders that cannot match the pricing. Those smaller players say the economics of keeping branches and machines in low-density areas are already marginal, and this push may tip them over the edge.
Critics argue the proposal is less about customer service innovation and more about a market power play in communities already hit by branch closures. The scheme centralises control of crucial cash access points in the hands of a few dominant institutions.
Regional voices warn the result could be fewer locally anchored banks, weaker competition on loans and deposits and greater dependence on city-based decision makers. ACCC’s decision now shapes how regional banking remains viable.
