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Banks are facing ''the battle of the last branch standing'' in many smaller rural towns, with each one knowing they will lose customers if they are the first to leave.
The KPMG survey of financial institutions found the ''hot topic'' for the 2013 report was branches versus ATMs.
KPMG head of financial services John Kensington said more people had moved to phone and tablets and wanted an app with which to do their banking.
But there remained a ''real place'' for the branch and the knowledgeable person within that branch.
''While the use of apps has exploded, and is more frequent on a daily basis when compared to a branch visit, research shows the types of transactions that occur using an app are currently limited to checking balances, transferring funds and making minor payments.
''The apps may well be able to do more, but the 'now generation' who use them do not seem to use them for more complex activities.''
When it came to larger transactions - mortgages, other significant loans, insurance or other complex transactions - the average customer still wanted to do it in a branch, face-to-face with a real person, he said.
For those more complex transactions, which typically required evidence by signing a signature, electronic was not yet the accepted way.
That put banks under pressure. Many branches found themselves overburdened with people doing transactions across the counter - transactions that could be done through a smart ATM such as deposits, withdrawals, transfers, payments and changing credit card limits.
''Particularly in some regional and suburban branches, it is almost a social occasion to go and see the bank teller. On some days of the week, such as pay day, benefit day or bill payment day, many branches are inundated with people all wanting to do one or two labour-intensive transactions.''
A more efficient approach might be to have those people directed to a specific smart ATM that could undertake the transaction for them, perhaps by a concierge at the door identifying the specific machine, Mr Kensington said.
At the same time, high-value complex transaction customers could be directed to an experienced senior banker.
Banks needed branches to have a presence in the community, however, many were wrestling with the long periods of time their branch and branch staff were idle, while at other times there was a rush of people.
Some banks were looking at branch opening hours and realising many busy people needed to be able to access their branch at weekends if they were unable to leave work during the week, he said.
Related to that was the battle of the last branch standing in smaller rural towns.
There might be three or four banks represented in towns with barely enough business in total to support one bank.
''But each knows if they are the first to fold and leave town, they would probably lose customers.
''They know if they can hang out until the end and be the last left, they will pick up a good percentage of customers from those branches that have departed for the very reasons mentioned earlier.
''In some ways, this is the battle of attrition,'' Mr Kensington said.