Is cash cactus? Are bank branches busted? Industry figures have their say (2024)

Bank branches are not finished, despite the huge and ongoing shift to electronic banking, according to the industry.

With 99.1 per cent of banking interactions now done online or via apps, fears have grown about a continued decline in branch numbers - especially in regional and smaller areas - and about the future of cash itself.

"The role of branch banking in Tasmania is changing, with customers visiting less frequently for cash transactions, but continuing to visit for more complex and involved requirements like general product advice, Know Your Customer on-boarding, safe custody, verification, lodgement of legal authorities such as power of attorney and financial management orders," Mr Morgan said.

"While Tasmanians are changing the way they bank, MyState acknowledges that some customers will retain a preference for face to face banking services.

"That's why MyState has retained branches in key centres and has partnered with AusPost to offer over the counter services in smaller centres.

"While cash is declining, it still plays an important role in the Tasmanian economy and is preferred by some customers."

Mr Morgan was speaking after the release of a report called Bank On It by the Australian Banking Association that showed customers were shifting to digital banking channels at "unprecedented rates".

The ABA said banks were not going to go cashless any time soon despite a huge decline in its use as digital banking surged.

"Australians are going digital in all aspects of their lives and banking is no exception," chief executive Anna Bligh said.

Digital boom

"We are in the midst of a digital banking boom in this country.

"Australians are interacting with their bank more than ever before thanks to the ease and convenience of digital banking.

"They are banking whenever and wherever it suits them."

Ms Bligh said banks would continue to support people who preferred to use cash and face to face banking services.

"This report shows that Australians are using less and less cash, but we're not about to become cashless any time soon," Ms Bligh said.

"Banks still maintain a strong branch network, with Australia still having a higher branch density than the OECD average, complemented by the availability of face-to-face services at over 3500 Bank@Post locations around the country."

Through the floor

The ABA said the share of retail payments made with cash had fallen by about 10 per cent each year since 2007.

It fell from 37 per cent in 2007 to just 7.5 per cent in 2022.

Cash use had fallen substantially among all age and income groups.

Its use for legitimate transactions was projected to fall to just 4 per cent by 2030.

The report showed payments with mobile wallets in the last year exceeded total ATM cash withdrawals for the first time ever ($126 billion to $105 billion).

Interactions at banking branches fell by 47 per cent between 2019 and 2023.

Mr Morgan said MyState Bank had been ramping up its investment in digital services to meet customer demand and expectations.

"Mobile banking via the app is accelerating, with four out of five MyState customers registered for online and mobile banking," he said.

"More Tasmanians are choosing to check their balances, transfer money and pay bills on their phones via the MyState App rather than at a branch."