South Africa’s biggest banks closing ATMs and shrinking branches
South Africa’s biggest banks have closed many ATMs nationwide and are shrinking the size of their branches as more of their clients use digital channels to conduct transactions.
This has been a deliberate strategy of South Africa’s traditional ‘Big Four’ banks – Absa, Standard Bank, Nedbank, and FirstRand – to reduce operating costs and increase capital efficiency.
It has also been accelerated by new digital-only banks such as Discovery Bank, TymeBank, and Bank Zero, which do not have branches or ATMs.
These banks, particularly TymeBank, leverage South African retailers’ footprint and distribution channels as cash points.
Another major catalyst of this shift was the pandemic-era restrictions imposed on in-person interactions, which forced clients to use digital transaction channels and pushed banks to improve their online offerings.
The number of transactions conducted through ATMs has not recovered to its pre-pandemic levels, making a significant portion of these devices inefficient to operate.
There has also been a push from some banks to enable their clients to use ATMs from outside of their networks.
For example, Standard Bank has removed the Saswitch fee it used to charge on the 20,000 ATMs managed by Bankserv Africa’s Saswitch.
This enables the bank to have a countrywide footprint and reach its clients without having to service thousands of additional ATMs.
While there has been a clear decline in the number of ATMs around the country, the Big Four banks – besides Absa – have actually increased their branch number over the past financial year.
Standard Bank’s head of personal and private banking, Kabelo Makeke, said this is part of a strategy from banks to adjust their services to better align with customer needs.
He explained to Daily Investor that branch networks are no longer seen as central to a bank’s offering but are complimentary to its digital and self-service channels.
And so, while these banks have increased their number of branches, the size of these facilities is actually declining.
The reasons for the decline in the number of ATMs and the shrinking size of branches are outlined below.
Absa
Absa said in its latest integrated annual report that the decline in its ATM number and branches is due to the increased functionality of its app.
As it has increased the number of services available on its app, clients no longer need to visit branches or ATMs to conduct transactions or access documents.
This has been driven by the successful move of the Absa website and app to Amazon Web Services, enabling it to handle increased demand and more complex services.
For example, the app has been scaled to offer a comprehensive suite of lending and deposit products such as credit cards, overdrafts, personal loans, depositor plus, cash investment tracker and client switching on the app.
Credit card control has also been launched on digital channels, allowing clients to increase their credit card limits, activate their cards, freeze cards, reset their pins, and order a replacement card.
Absa said these self-service functionalities have decreased calls or branch visits, thereby contributing to lower utilisation of higher-cost channels.
The bank said it maintains a well-established branch presence in all major cities in South Africa, and its ATM network reaches the majority of South Africans.
| Measure | FY2022 | FY2023 | Difference |
| Number of ATMs | 5,364 | 5,250 | -114 |
| Number of branches | 621 | 618 | -3 |
Standard Bank
Standard Bank has significantly cut its number of ATMs and shrunk the size of its branches in South Africa as online transactions grow rapidly.
It pointed out that transactions conducted at its branches decreased by 13% in the first half of 2024 to around 2.5 million transactions. Over the same period, online transactions increased by 30% to 1.5 billion transactions.
In this time the bank has actively reduced the average square meter size of its branches each year.
The bank has reduced its branch square meters by 4% to 239,000 square meters in the last year, equivalent to about eight Ellis Park Rugby stadiums, without reducing the number of points of representation.
It said it continues to optimise our infrastructure by, for instance, reducing branch square meterage and ATM numbers.
However, this is balanced by the fact that many of its clients still need to access and process cash, and the bank said it understands there is no substitute for in-person meetings when dealing with complex issues.
Makeke told Daily Investor that demand for cash withdrawals has not fully recovered to pre-pandemic levels, leaving the bank with little choice but to shutter underutilised ATMs.
“In recent years, we have seen a significant increase in ATM cash deposits driven by branch cash migration.”
“ATM cash withdrawals remain largely flat whilst there is continued decline in utilisation of non-cash ATM services due to digital migration.”
“In some cases, this will result in the removal or relocation of low transacting ATMs to areas that are more convenient and accessible to clients.”
It has also been renewing its ATM network by introducing more advanced devices with improved transaction speed and the ability to offer additional services.
These new ATMs have several key improvements in their technology infrastructure to handle a greater capacity of transactions and complete them more quickly.
“The new ATMs have higher capacity and offer more client services, including real-time acceptance, validation, and recycling of bulk cash,” Makeke said.
“This is part of a five-year journey which will also result in either removal or relocation of low-transacting ATMs to areas that are more convenient and accessible to clients.”
| Measure | FY2022 | FY2023 | Difference |
| Number of ATMs | 3,780 | 3,548 | -232 |
| Number of branches | 619 | 652 | +33 |
Nedbank
Like Absa, Nedbank said the reduction in its number of ATMs and the size of its branches is due to the improved functionality of its online services.
Over the past few years, Nedbank automated services that were available only at a branch or through human interaction.
Today, more than 200 retail client services (from 170+ in 2022) and more than 400 juristic services (from 200+ in 2022) are available on its apps and via electronic platforms.
This has greatly reduced the number of branch visits and ATM transactions, enabling the bank to increase its efficiency.
As Nedbank optimises its physical presence through Project Imagine (the bank’s new digitally-focused outlets) its branch floor space has decreased by 27,000m² in 2023. Since 2014, it has decreased by 111,000m² to 137,000m².
In its 2023 financial year alone, the bank reduced its branch and head office floor space by 62,000m². Across the year, it opened 386 new Imagine digital-oriented branches, now making up 71% of its total.
Its Imagine branch design focuses on convenience and digital self-service banking, with features like an appointment booking system through the banking app suite.
Clients can use the Nedbank Money app or Nedbank Online Banking to book a date and time with a branch consultant without waiting in a queue for personal financial guidance or assistance.
The bank has also been pushed into adapting its physical presence by the strong growth in digital transaction volumes and a corresponding decline in branch transactions.
“A reduction in the number of employees and employee-dependent activities and outlets (predominantly their size) results in cost savings,” the bank said.
These cost savings are partially offset by the impact of ongoing IT investments, investment in skills appropriate to compete in a more digital world, and increasing fee pressure as clients migrate to more affordable digital solutions.
The bank said its shift towards a new Target Operating Model, based on optimising its physical infrastructure and organisational structure, has yielded savings of R2.2 billion.
| Measure | FY2022 | FY2023 | Difference |
| Number of ATMs | 4,334 | 4,199 | -135 |
| Number of branches | 545 | 547 | +2 |
FirstRand (FNB)
FNB appears to have undergone a much slower process of closing down some of its ATMs and reshaping its branch network.
However, these numbers do not fully reflect the fundamental change in the nature of its ATM and branch offering in recent years.
The FNB ATM footprint, which includes various customer options, remained relatively flat, moving from 4,789 devices in December 2022 to 4,790 devices in December 2023
In response to questions earlier this year, FNB Corporate Affairs Executive Jacqui O’Sullivan said the bank continuously reevaluates and reviews the location and number of its ATMs.
“Although there is a slight reduction in ATM numbers, we are installing more Automated Deposit Terminals (ADTs) as these terminals offer greater customer functionality,” O’Sullivan said.
The ADTs allow cash deposits to be authenticated, counted, and immediately credited into FNB accounts while allowing customers to draw cash, print bank statements, and make prepaid purchases for airtime and electricity.
“We do not have a strategy to reduce our self-service device footprint, as is evidenced by the information, the availability of automated machines for customer self-service has remained flat year on year.”
The slight reduction in ATM numbers is mostly due to FNB converting some traditional ATMs to ADTs that allow for deposit taking in addition to all other ATM services.
“FNB continues to focus on having sufficient representation in all areas to ensure our customers have access to self-service terminals for convenient banking.”
The bank continues to grow its branch number but is ensuring its branches are optimally sized and remain highly efficient. It is also being very deliberate in where it is opening new branches.
Currently, FNB is implementing its Branch Community Project, which commenced in May 2021, with the objective of building 50 new branches in Community Townships over the next few years.
This is to ensure adequate representation of FNB in previously underserved communities. Since the inception of this project, 31 community branches have been opened.
| Measure | December 2022 | December 2023 | Difference |
| Number of ATMs (including ADTs) | 4,789 | 4,790 | +1 |
| Number of branches | 614 | 624 | +10 |
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