The loss of the site is "disappointing" for community leaders who say the face-to-face service is essential for the town and residents.

ANZ Victorian general manager Michael Wake told The Standard the closure, due for March 18, 2021, was because people had changed how they banked.

"They no longer use branches as much and we see a 10 per cent decline in customer transactions every year. At the same time, demand for our contact centres and hardship teams has grown significantly," Mr Wake said.

He said a majority of customers "preferred doing their banking when it suits them" with apps and call centres now "convenient".

Mr Wake said ANZ was informing staff and customers about six months ahead of the closure.

"We will seek to retain as many staff members as possible through helping them move into a range of new roles across ANZ where our customers need us most right now, such as our call centre, customer resolution and hardship teams," he said.

"The growing trend of services moving online is happening across a range of industries around Australia and we have already seen basic services such as Medicare and the Australian Taxation Office move to online options."

The closure means the closest ANZ branches to Mortlake will be in Camperdown and Warrnambool.

Mortlake Community Development Committee president Kelvin Goodall and Moyne Shire councillor Jill Parker said they were disappointed.

"It feels a bit like the last nail in the coffin, over the years we've lost lots of things in Mortlake," Mr Goodall said.

"The town is starting to kick a few goals, there's more houses going up, there's more people moving in.

"It's going to put a big hole on the financial management of business in the town."

Cr Parker said she had banked with ANZ to "support local jobs" because it had remained in the town following Commonwealth Bank and NAB branches closing years ago.

"People have stood by the ANZ because they stood by us, but I'm not sure where the loyalty will lie now," she said.

"You also have to have basic services to attract people to a town. If you look and there is a school, a bank, a doctor and a post office - they are the hub of a town. If you are wanting to attract people to a town, you need to say 'we have got the services we can provide for you'."

Mr Wake said while many had "already changed their banking habits in recent times" the change would be "more challenging for some customers".

"We are writing to customers personally to let them know about the closure, which is about six months away. This will provide time for us to discuss alternative banking methods with them, including online, telephone and mobile banking," he said.

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