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charges and a lack of support. As mentioned above, in 1997 the Consumers’ Institute
found that the best bank was the TSB Bank, the country’s only wholly New Zealandowned
bank. It thus appears that community banking is the way forward for supporting
local communties. There are, however, a number of problems that all banks must deal
with, which I shall discuss below.
Problems Faced by Banks
All banks face four basic problems that do not share the same solution; moreover, the
differing needs of the four problems can actually conflict. These problems are discussed
below, along with the various solutions. 13a
Access to Banking Facilities
People need ready access to transactions, and if there is no bank close by they will go to
the nearest town with a local branch and do their shopping there while they are at it. A
lack of rural branches therefore contributes directly to the decline of small towns.
Although the introduction of new technology has contributed to branch closures, the main
causes are the high costs of staff, buildings and infrastructure that are required to keep
them open. Banks thus have two options: first, they can put up fees nationally for ATM,
EFTPOS and general transactions to cover costs; or second, they can rationalise by
reducing staff and closing the branches. Neither of these options is palatable to the public.
Claire Matthews, senior lecturer in banking at Massey University and author of
Fallen Branches, published by the bank staff union Finsec, says bank closures should be
questioned. 14 The number of bank branches fell from 1500 in 1993 to 900 in 1999 and was
still falling in 2000, as banks merged and switched services to non­branch banking
delivery systems like ATMs and EFTPOS. 15 When statistics for non­bank institutions such
as building societies are included with those for banks, it is found that New Zealand has
one of the highest ratios of such delivery systems per person in the world: 164 EFTPOS