Are bank tellers on the verge of extinction?
Updated: Jan 28, 2019
In South Africa, major banks are actively discouraging in-branch (teller) transactions and promoting usage of ATMs and mobile banking apps instead. One of our businesses, a retail operation, handles significant volumes of payments that are made through one of the leading banks in South Africa. In 2014 just above half (52%) of the payments were made inside the bank (i.e. at a teller) and 48% at an ATM. There was a huge reversal in 2015 with teller transactions dropping to 38% and ATM deposits rising to 62%. Significant decreases in teller transactions, and corresponding increases in ATM deposits, continued year to year thereafter and stood at 5% versus 95% respectively in 2017. These figures have remained stable in 2018.
In-branch (teller) transactions are costlier to the business compared to self-service options and therefore the above shift is generally good for the business. From a more general perspective though, it is interesting to read that the number of physical bank outlets is declining globally, including in South Africa. Given the growing use of digital banking platforms and advancements in artificial intelligence, such as ATMs that can handle transactions that currently require the human element, are bank tellers on the verge of extinction?