Australia’s Suncorp said Wednesday that it will be shutting down 19 bank branches and one business center, citing a COVID-19-induced increase in demand for digital banking services, as the company reportedly gears up for significant job cuts.
The closures will happen in locations across Queensland, New South Wales and Victoria, Suncorp said, adding that most of them have already been closed since April due to the COVID-19 lockdown. Customers of these branches have already shifted to online and contact centers, Suncorp said, making it “unviable to reopen.”
The move follows the insurance and banking company’s potential plans to slash 5% to 10% of its staff as part of a wider restructuring reported by The Australian Financial Review on Sunday. Suncorp currently has about 13,500 employees, according to its website.
Suncorp did not immediately respond to a request for comment outside of business hours in Australia.
The company said that staff members affected by the branch closures will be able to apply for “contact center roles they can perform in their local communities.”
“We will also ensure we support our employees with the assistance they need through these changes and work with them to find redeployment opportunities, where possible, across our organisation,” Chris Fleming, Suncorp’s executive general manager of consumer distribution, said Wednesday.
Fleming added that the company needs to make adjustments to its businesses, “so we can keep up with our customers’ demands and remain a strong alternative to the major banks, which is something our customers also value.”
The decision to shutter the branches comes as the number of digital transactions increased an additional 10% this year, with two-thirds of new accounts opened online, Fleming said. Meanwhile, over-the-counter transactions have decreased around 60% since 2016.
“Suncorp is committed to serving our customers how they want to be served —many have shown us they love using the Suncorp app or talking to us on the phone,” Fleming said. “More and more customers have switched to digital banking in 2020, and we expect they will still want to bank digitally beyond COVID-19 and face-to-face transactions will fall further.”
The company has already begun making adjustments to its businesses to speed up its adoption of digital practices. In July, Suncorp unveiled a “new operating and leadership structure” that would simplify the company’s businesses and speed up its adoption of digital and data channels. Suncorp Group CEO Steve Johnston said at the time that “the summer of natural disasters and the health and economic impacts of COVID-19 justified a faster-paced transformation.”
Suncorp’s decision to close branches and cut jobs comes as other Australian financial firms are making similar moves to reduce their workforce. In June, PwC Australia said it would be cutting 400 staff members from its financial advisory and consulting businesses, representing around 5% of its Australian workforce. In April, KPMG Australia said it was cutting 200 jobs due to COVID-19 and enforcing a 20% pay cut for four months starting in May. Deloitte also reportedly said in June that it would cut around 700 employees in Australia, according to The Australian Financial Review.