Abstract

Australia's financial system is undergoing a period of substantial structural change. A number of interrelated factors are implicated: changes in the competitive forces within the sector, the introduction of new technology, and changing consumer demands. While these changes may have had positive impacts on most consumers, they have had a number of negative impacts, particularly for low-income consumers of financial services and for people located in rural and remote communities.

This Discussion Paper (218) and the one following (219) will analyse the proposition that an alternative model for the delivery of financial services or re-regulation of the financial sector is required to protect the interests of low-income groups and, in particular, Indigenous people. The argument is based on an understanding of the impact of the deregulation of the financial sector on the delivery of banking services to low-income groups and to people located in rural and remote communities. Indigenous people make up a significant proportion of both of these groups. It is argued that deregulation has had a profound impact on Indigenous people, both because of their historical lack of equitable access to financial services, and their comparatively low socioeconomic status.

Supply of financial services to rural and remote communities within Australia is currently in decline. This paper explores current banking and financial services in the context of Australia's financial system, the current supply of banking and financial services to rural and remote communities, and the impact that the lack of access to these services has on the relatively increasing Indigenous populations of these communities. Work by Westbury has detailed the specific problems faced by Indigenous people in the Barwon-Darling region. These include:

• the failure of financial providers to take account of the different conceptions that Indigenous people have of financial facilities;
• the problems caused by the inadequate provision of banking and financial services within the region;
• the fact that many Indigenous people do not understand either the way bank fees and charges operate, or how to minimise these fees and charges; and
• the low technical proficiency of many Indigenous people.

In addition Indigenous people want banking services to be provided on a personal, private, face-to-face basis, by Indigenous staff. If these requirements are to be met, alternatives to the current delivery of banking and financial services to rural and remote Indigenous communities will have to be considered.

ISBN: 0 7315 2653 8

ISSN:1036 1774

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