Banking service on the wheels may just be the solution to the shortage of bank branches in an effort to cater to disadvantaged consumers.
The Consumer Council has recommended to the banking sector to explore the feasibility of introducing mobile branches in areas without a branch or an ATM, or in communities with a high proportion of aged population.
The proposal was put forward in a study of the problem created by a substantial reduction in the number of manned bank branches in recent years, down from 1,463 branches in 2001 to 1,209 in 2006 - an overall reduction of 254 branches or 17%.
The problem is particularly acute in districts of low household income levels such as Kwun Tong, Sham Shui Po and Tin Shui Wai which were selected for the study. The disparity is most evident in some areas.
For example, only one branch was found for a population of more than 45,000 inhabiting four large housing estates in Kwun Tong compared to roughly one bank per 1,400 persons in an affluent area such as Wanchai.
People living in the worst affected areas (as in the case of Lam Tin) have now to walk 30 to 45 minutes (for an average person) to a specific bank branch for counter service, instead of 5 to 10 minutes as in the past.
The Consumer Council released today (March 29) the findings and recommendations of its study report on "the Impact of Branch Closures and Fee Increases of Banks on Disadvantaged Consumers".
The Council has called on the banking sector to facilitate the use of ATMs and other automatic banking facilities to consumers.
It is recommended that while there may be technical difficulties involved, the banking sector should seriously consider interconnecting the two ATM networks.
Interconnection between networks is currently available in countries such as Australia where every holder of a debit or credit card can access any of the ATM facilities in the country.
The use of biometrics technology (such as finger print or retina) is also recommended as an alternative to PIN for accessing ATM services.
Further, ATM service should be provided cost free to the disadvantaged such as the poor, elderly and disabled. They should also be able to obtain cash from a retail checkout point without having to make purchase at the same time.
In the study, the Council has recommended that assistance should be given to customers, particularly the underprivileged on welfare payments, in their requests to switch to other banks in the event of branch closure.
In this regard, the banking sector should discuss how best to streamline procedures for switching between banks - and the necessary notification and documentation with the Social Welfare Department - by offering a one-stop service that will facilitate the switching of accounts for their customers.
The levy of miscellaneous fees and charges of banks was found to be of particular concerns to the disadvantaged consumers. Many felt they had no alternative but to pay as almost all banks imposed such levies, nor were they aware of the availability of fee waivers from some banks.
To address the problem, the banking sector is recommended to improve its transparency of bank fee waiver policy, and to provide automatic fee waiver to recipients of Comprehensive Social Security Assistance Scheme and Social Security Allowance Scheme.
Other proposals to ease the burden of underprivileged consumers include: introduce a waiver on the application of penalties associated with the issue of a replacement card, and other fees such as counter service fees by allowing a limited number of free withdrawals or transfers made at counters.
On the part of the Government, the Council has recommended amongst other proposals to study the need for introducing a standard basic bank account to consumers similar to that available in other countries.
For example, in France, Canada, and the US, the right to access a basic banking service is enshrined in law.
Observing that banks in general have a policy to waive the charges on the accounts maintained by underprivileged customers, the Government has responded that it therefore does not consider that the public have difficulty in obtaining basic banking services, but nonetheless it will continue to monitor the situation and follow up with the banking sector where necessary.
Further, the Government is asked to make special provisions in order to attract banks to open up branches in public housing estates where there are few or no bank branches, and to continue to explore whether post offices can provide micro-payments service.
Consumers are also urged to play their part in the proper choice and use of banking services. For instance, consolidate bank accounts to avoid unnecessary service charges; select the most suitable bank account to cater for one's own circumstances; seek help and learn to use ATMs or other automatic banking facilities, etc.
The Consumer Council has had discussions with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Association of Banks (HKAB) over the findings and recommendations of the study.
The HKAB has already undertaken special educational activities to promote the use of ATMs, and agreed to give further consideration to some of the Council's recommendations.
An executive summary of the study report is available on the Consumer Council website at http://www.consumer.org.hk.