Cashless Bank Branches in Canada

Interesting short paper by Walter Engert and Ben Fung of Bank of Canada.

Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available. These services are instead provided via automatic teller machines. This note discusses the development of tellerless bank branches in Canada and analyzes the potential implications for cash demand.

Some Canadian banks are moving towards branchless banking:

Canadian banks seem to be experimenting with tellerless branches to align with a decrease in demand for cash services and to reduce cash handling costs (as
described above).  Over the last four years, Laurentian Bank, a regional institution, has been transitioning its network of over 90 branches from traditional bank branches to tellerless financial advice centres. Completion of this transition is expected by the
end of 2019.
The Canadian Imperial Bank of Commerce (CIBC), a major Canadian bank, has also increased the number of its tellerless branches in recent years. Based 
on information available on its website, CIBC has about 185 tellerless branches, accounting for 18 percent of CIBC branches in Canada. At least two other major Canadian banks are also introducing tellerless branches: TD Canada Trust and Scotiabank. TD Canada Trust operates a number of TD Help & Advice Centres, where cash services are available only through onsite ATMs.8 Scotiabank is opening two types of new bank branches, called Scotiabank Express and Scotiabank Solutions. According to the description of these new branches, cash services are available only through onsite ATMs.
However, these branches are unlikely to lead to decrease in demand for cash:
In Canada, bank branches always have one or more ATMs, and these ATMs are multifunctional. Thus, at a tellerless bank branch, cash withdrawals and deposits, cheque deposits, bill payments and bank transfers can be made through in-branch ATMs or a 24-hour deposit box (for business customers). In addition, bank customers can call the telephone banking centre to temporarily increase their daily ATM withdrawal limit or they can ask staff at the branch for assistance.
Many banks have also installed, or are in the process of installing, new ATMs that allow customers to choose among several denominations of bank notes (from $5 to $50) when withdrawing cash. Some of these ATMs can also provide $100 notes, although this denomination is not yet broadly available. In addition, a built-in bank note scanner allows easy deposits of cash to a bank account.
In sum, the transition to tellerless bank branches in Canada seems unlikely to increase the frictions or costs around accessing cash that could discourage cash
demand in Canada. 

One Response to “Cashless Bank Branches in Canada”

  1. Lucky Pandey Says:

    Interesting one! Bank of America branch in Chicago’s also gone tellerless. This can decrease the demand for cash.

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