The trial of the “less than efficient” regional banking hub

The Reserve Bank found that a trial of regional banking centers had “not been successful”, describing them as “less than effective”.

The hubs review, released to 1News under the Official Information Act, revealed a range of problems. They include: lack of privacy and security issues, unresponsive phone support, and unreliable/out-of-order service.

“Communities have been disappointed with the limited and sometimes unreliable services hubs provide,” the Reserve Bank said.

“The frustration that hubs aren’t providing what locals want hurts the customer experience and undermines communities’ trust and willingness to use them.”

The hubs started in 2020 and are a partnership between the government and the NZ Bankers Association, on behalf of the big six banks.

They include smart ATMs, a tablet for online banking and a priority phone line. They can be found in places like pharmacies or community centers.

NZ Bankers Association chief executive Roger Beaumont said improvements had been made to the hubs.

“Yes, there have been some technical issues…that’s why in phase two of the hubs, we’re going to expand and improve them to provide a better customer experience,” Beaumont said.

The four initial hubs are in Twizel, Stoke, Martinborough and Opunake. Next year the trial will be expanded to include Whangamatā, Ōpōtiki, Tūrangi and Waimate.

Improvements include greater privacy and access to specialist banking staff.

“Hubs aim to provide a solution for customers, especially in smaller towns, who for whatever reason are not yet comfortable with the digital or online environment,” said Beaumont.

In Stoke, there was an outcry when the last bank closed in 2018. Nelson Gray Power chair Sue Sara said members loved their banking centre.

“A lot of them don’t have internet, like with the hub. They can go there, there’s always someone available to help them set up automatic payments, have their kitchen guide them throughout. It’s absolutely wonderful.”

In the review, the Reserve Bank also looked at the broader issue of baking in the regions.

“Even if the hubs are improved, our work to date suggests that they will never be, at best, more than a partial solution to a continued reduction in cash and banking services in the regions.”

Other options listed include a code of conduct for bank closures and requiring banks to provide a certain level of service.

Finance Minister Grant Robertson said all options are worth considering.

“Well obviously there are things like what’s done in other countries, things like minimum codes for banks. Arrangements that they have to follow if they choose to close a branch.”

He says the purpose of the banking center trial was to determine what worked and what didn’t.

“I’m sure the result will be better services in the long run.”

National revenue spokesman Andrew Bayly said it was crucial the government got it right.

“At the end of the day, we need to ensure that people living in rural areas have access to excellent, locally-provided bakery services.”

He said it’s especially important for people with disabilities and connectivity issues.

“If the hub concept doesn’t work, we’ll have to consider other options,” Bayly said.

Most banks have said they won’t close any more regional branches until at least the end of 2023.

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