Leading financial advisor urges Australian government to step up and stop banks 'UNBANKING' people

According to Alex Jamieson, Australia's leading financial advisor, millions of Australians are being dumped by their banks without even knowing it.

"Ever heard of the term unbanked?  Well, it is happening all over the world including Australia.   Banks are closing branches, closing services such as telephone help lines and dumping cheque books.  Customers are being unbanked," Jamieson said.

"It is a trend we are seeing all over Australia. If you are an older Australian, not particularly tech savvy, someone who deals in cash or someone who lives in regional areas, chances are your bank is closing down services on you making it almost impossible for you to engage with them.

"Banks are happy to have your money in their account so they can use it, however they don't want you to use it if it means they have to help you in any way."

Jamieson believes the government will need to step up to the plate and look at minimum service levels for people.

"Many businesses and older Australians still use cheque books, but these are starting to disappear," he said.

"Banks are starting to phase out cheques due to the administration burden of processing the payments and the increasing risk of scams/fraud with this payment method.  This is both for domestic and international cheques, and we are seeing this trend across the market.

"The Australian Banking Association reported in the last 12 months to December 2023 that there were 301,778 scams and $292 million lost from customers.  Historically, branches have provided a safe and secure method to transfer funds and also for people to access banking services as an alternative to cheques.

"The rapid transition, however, by banks to internet banking, has placed the elderly and less technologically savvy in a vulnerable and dangerously exposed position.

"These individuals are often operating their internet banking on outdated software and hardware that is vulnerable to hackers.  The bank may have the most sophisticated computer infrastructure, but if the individual is using a 10-plus-year-old computer with software that is out of date, this places the bank customer at a much elevated risk to being exposed to hackers and scams.

"With the decline in banks providing cheque services, the only options available are internet transfers, Bpay for payment services.  This pushes people deeper into the technology area of banking, who may not be suited to this transition."

Jamieson emphasises that zoomers and milllenials are ideally suited to online banking because they have been brought up with a device in their hand, but even many younger Australians are struggling to afford basic technology.

"Banks are supposed to be havens for our money, where we can put our savings in a safe place and access them when we need them," Jamieson said.

"Unfortunately, people are being debanked and will soon be left with no means of engaging with their bank.

"This is a big issue for many people that is about to get worse as more banks quietly unbank people in the hope of eliminating customers who might need a bit more help.

"What is happening is unAustralian and something needs to be done about it."

About Alex Jamieson

Alex Jamieson, BBus, MFinPlan, FChFP, is the founder and head of AJ Financial Planning and one of the country's most respected financial advisors. He is located in Melbourne, Australia and has a national client base. AJ Financial Planning is a boutique firm. Alex and his team pride themselves on providing specialist knowledge in the areas of financial planning advice and investment advice.

www.ajfp.com.au