A recent report has revealed that Banks in South Africa have reduced the number of ATMs amid a surge in digital banking.
BusinessTech’s analysis highlights a decline in the number of ATMs in the country, with the count dropping from 33,171 in 2019 to 28,967 in 2023/2024. The demand for physical ATMs has reportedly diminished as more customers move to online and digital banking.
Additionally, the increase in ATM-related crimes such as vandalism and theft has made securing these machines more challenging and expensive, as banks are increasingly focusing on enhancing digital services and infrastructure to meet customers evolving needs.
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According to the Outlier, one of South Africa’s largest financial services organizations, Absa Bank, saw its number of ATMs decline from 8,802 in 2019 to 5,364 in 2024, as its customers shifted to e-commerce and digital platforms. The majority of closures occurred between 2020 and 2022.
The bank further noted that its ATM footprint has however witnessed a slight reduction in numbers primarily due to violent crimes, including ATM bombings, making it impractical to replace certain units.
First National Bank (FNB) one of South Africa’s “big four” banks, saw its ATMs reduced from 5,780 in 2019 to 4,790 in 2023/2024. Nedbank recorded a notable decline in ATMs from 4,257 to 4,199 in 2023/2024. Standard Bank saw its ATM reduce from 9,321 in 2019 to 2023/2024.
The bank is upgrading its ATMs with new technology to improve transaction speed and service quality. The new ATMs have enhanced capacity and offer additional services, such as real-time acceptance, validation, and recycling of bulk cash.
In contrast, Nedbank recorded a modest increase of 19 ATMs since 2019 despite removing 62 outdated devices within the past two years. The bank highlighted a growing demand for ATM services, even from non-Nedbank customers. However, the bank acknowledged the rising popularity of digital payments and transfers, which it noted may potentially impact future ATM transaction growth.
The decommissioning of ATMs in South Africa reflects broader changes in consumer behavior, technological advancements, and economic pressures within the banking industry. However, the trend in the reduction of bank ATMs, is not unique to South Africa, as globally, banks are reducing their ATM networks in response to similar shifts towards digital banking and cashless economies.
In Nigeria, according to a KPMG report, weekly ATM usage decreased from 70% in the previous few years to 40% in 2023. The report notes that the reduction in ATM usage coincides with a notable rise in agency banking usage, with six out of ten customers now frequent bank agents every week. The report further highlights a shift in customer preferences towards readily available cash options, emphasizing the popularity of bank agents across the nation.
Additionally, the poll reported that, according to NIBSS statistics, payments made through digital channels increased by 52% in 2023 between January and October. Approximately 13% of retail banking respondents now rely on fintech for their primary banking needs, compared to the 4% who made the switch in 2022.
As digital solutions become more prevalent and sophisticated, the banking industry is likely to continue evolving. The decommissioning of ATMs in South Africa is a clear indicator of this shift, signaling a future where digital banking is at the forefront, and traditional banking methods gradually become obsolete.
In response to this, banks are likely to invest more heavily in enhancing their digital services. By improving mobile and online banking platforms, they can offer comprehensive services that compensate for the reduced ATM network.