Millions of people risk being left behind as the big banks close hundreds of branches nationwide to cut costs, with new analysis showing a gap in access to digital services.

Researchers at RMIT and Swinburne University published a report on Thursday showing a pullback in face-to-face banking has been worsened by a lack of affordable internet in many communities, particularly across Australia where bank closures are concentrated.

RMIT distinguished professor Julian Thomas said that while banks talk up the convenience of online banking, a “significant group” of Australians can’t reliably go online or struggle with affordability.

“It’s absolutely the case that most Australians will benefit from better online banking,” Thomas said.

“But the point about an essential service like banking is that we really expect these to be available for everybody.

“If you have just 5 per cent of the Australian population not able to use those services, we’re not talking about a small number of people, we’re talking about millions of people.”

Researchers analysed digital inclusion index figures to scrutinise claims made by the banking industry at a federal government inquiry into hundreds of branch closures to date.

They found that industry messaging about the vast majority (nine in 10) of Australians doing their banking online lacks crucial context about how vulnerable communities are being affected.

For example, fewer than 90 per cent of older Australians and those living in regional areas use online banking services.

In fact, the rate for those aged 75 and over doing so is just 74 per cent – a figure that’s “plateauing”.

Households with lower income levels also have lower rates of online banking use; 87 per cent of those living in public housing use it, while just 82.2 per cent of jobless people do.

“This rate has declined considerably since 2021, when the rate of unemployed people who recently used digital banking was close to the national average, at 91.1 per cent,” the report said.

Thomas said a diverse range of Australians struggle with digital banking due to barriers like inaccessibility of reliable coverage in their area, or the costs associated with obtaining it.

“There are affordability barriers for many lower-income Australians,” Thomas said.

“There are also significant issues in regional and remote Australia in terms of access to decent communications infrastructure.

“While some work has been done in that area over the past decade or so, it is still the case that network access or coverage is a significant problem.”

What’s known as “affordability stress” – when someone must pay more than 5 per cent of their income to access quality, reliable internet – is a key issue, with about 27.6 per cent of Australians experiencing difficulties in this area.

And there is also a cohort of Australians that may have the ability to access the internet affordably but don’t have the confidence using digital tools to be able to bank remotely.

The gap in levels of digital ability in Australia slides from 82.9 per cent of 18 to 34-year-olds being proficient to just 21.6 per cent of those aged 75 and over, highlighting the problem.

Thomas said that while branch closures were helping banks cut costs, they can’t forget their role as responsible financial entities providing an essential service across the nation.

“Our suggestion would be that whatever service you are providing, if there are savings to be had by going online then make sure that some of those savings are directed to continuing to make sure that people who don’t fit that model are provided for,” Thomas explained.

Submissions to the Senate inquiry into bank closures were reopened last year and will remain available until February 29 before an eventual final report later this year.