Kiwibank's closure of its Taradale branch makes no sense and will hurt elderly in the region, a councillor says.

The bank announced on Wednesday its plans to partner with a new franchise had changed and the bank would close on March 13.

New Zealand Post, which operates out of the same building, will move across the road to Paper Plus on March 14.

Kiwibank spokesman Geoff Waller said the trend towards online banking meant they were no longer able to sustain multiple branches in close proximity to each other.

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"Every year more and more people are shifting to online channels, and while we know this doesn't reflect all customers, it does mean we have to find a way to continue to have a presence in our communities in a financially sustainable way."

He said customers tended to log into the bank's app one or twice a day, but only visited a branch one of twice a year.

The Kiwibank ATM in Taradale will remain, allowing customers to withdraw money in the suburb, he said.

Taradale councillor Tania Wright said it was a disappointing decision given the current growth in Taradale, with several housing developments going up in the area.

She said businesses closing tended to disproportionately affect the elderly and other people who were less mobile.

A spokesperson for Kiwibank said it acknowledged change was not easy for everyone.

"We would like to reassure customers that between now and the changes taking place our team at Taradale will work with affected customers to find solutions to meet their customer experience and access needs."

New Zealand Post spokesman Mark Yagmich said he was excited to begin a partnership with Paper Plus.

"This model of working with local businesses is more financially sustainable for NZ Post, in an ever-changing mix of postal services usage - the decline of mail, versus the significant increase in parcel services.

"It's also good for the businesses we work with, as they enjoy additional income both from transacting postal services on our behalf and by having more customers coming through their doors to pick up their parcel or send a postcard."

Wright said she was pleased to hear residents in Taradale would still be able to access postal services in the suburb.