ATMs didn't kill bank teller jobs, but the iPhone did

One key line about ATMs is buried deep in the article:

> the number of tellers per branch fell by more than a third between 1988 and 2004, but the number of urban bank branches (also encouraged by a wave of bank deregulation allowing more branches) rose by more than 40 percent

So, ATMs did impact bank teller jobs by a significant amount. A third of them were made redundant. It's just that the decrease at individual bank branches was offset by the increase in the total number of branches, because of deregulation and a booming economy and whatever else.

A lot of AI predictions are based on the same premise. That AI will impact the economy in certain sectors, but the productivity gains will create new jobs and grow the size of the pie and we will all benefit.

But will it?

Two anecdotes I'll share:

First: Most people believe it was Netflix that killed Blockbuster, but that's not strictly correct. It was the combination of Netflix and Redbox that really sealed the deal for Blockbuster (and video rental generally). It normally takes not one, but at least two things to really fill the full functionality of a old paradigm. Also it's human nature to focus heavily on one thing (Blockbuster was aware of Netflix) but lose sight of getting flanked by something else.

Second: Not listed here is how banks themselves have changed to be almost entirely online, which in many cases is more of a outsourcing play than a labor destruction play. My favorite example of this is Capital One, where the vast majority of their credit card operations literally cannot be solved in a branch. You must call them to say, resolve a fraud dispute. Note that this still requires staffing and is (not yet) fully automated, just not branch staffing. It doesn't make sense to staff branches to do that.

I do not get what's special about banking apps as opposed to online banking. I've been doing online banking in the browser on a PC since before apps and I'm still doing it because dealing with data on a phone is painful compared to a PC.

Is an app really that much easier to use?

When ATMs first came out, they were mostly still only at the branch because they were big machines. I remember in the late 70s/early 80s, if you got a steady check (like social security or a paycheck from a steady job) you could cash them at the liquor store. The liquor store would even run my Dad a tab, and he would pay it off when he cashed the check. On paydays he would not be the only one doing that, they must have had to get a lot of cash on hand.

TFA reasonably reduces to:

First, ATMs increased the demand for bank branches, which more than made up for the decrease in tellers per branch.

Second, mobile banking decreased the demand for physical branches.

In recent years I have been going less and less to banks. 20 years ago I would go monthly to pay some bills.

Nowadays, I must visit a bank once or twice a year tops. My manager frequently sends me messages, but invariably he is trying to sell me something.

I've noticed that branches have really cut down on tellers and in my latest visit the branch didn't even have a teller, just someone helping people use the ATM and lots of desks (most were empty) for you to handle more complicated business with your account manager.

I didn't notice any link with the iPhone, except maybe a vague coincidence in timing. Online banking existed before the iPhone, it worked using websites, on personal computers. And it took some time before smartphones were taken seriously by banks.

What I noticed however is a noticeable decrease in service quality in bank branches while online (desktop browser) options became better. Banks pushed customers out of their branches progressively. In the early 2010s tellers couldn't do anything you couldn't do online by yourself. For services like dealing with large quantities of cash, or coins, they made it so that you couldn't do more than what the ATMs allowed you to do, limiting the amount of cash the branch had access to and increasing how much you could withdrew from ATMs.

They didn't get the idea to fire all their tellers when Steve Jobs announced the iPhone. It was a decision at least a decade in the making. It is just that people tend to resist change so it happens slowly, especially for big, serious business like banking. And I don't think it is a bad thing.

That paired with an increasingly cashless society. (Which is also in large part to smart phones) Otherwise you'd still need more tellers to conduct transactions that exceed ATM limits.

Fun story. There are still bank tellers in the Falkland Islands because there is no e-banking. Transfers are literally made by filling in a piece of paper and taking it to the bank.

The author wants to say that atms are a stand in for in person banking experience, while the iPhone changes the paradigm entirely.

Why? Seems like basically the same paradigm to me, I can just do it without going anywhere.

Starting with quotes with JD Vance and talking about listening to him on Joe Rogen is... a choice. Also I fail to see how the iPhone did anything or is relevant at all. Banking apps were made by third parties years after the iPhone came out and everybody had dozens of smart phones to choose from. The reason why they mentioned the iPhone specifically, touch screen and app store, already existed in the form of PDAs long before the iPhone came out.

If I have to physically still go to the bank, it really hasn't disrupted much. The iPhone created an opportunity... the banks investing around the technology is the disruption. ATM itself couldn't unlock as much which I suppose is the paradigm mentioned in the article.

AI is more iPhone than ATM IMO.

Arent these basically minimum wage jobs? I mean throw a few dollars an hour on top of that, but there are plenty of jobs like this.

Any time I needed anything advanced, I get shuffled to someone else.

I hate the graph here. "Bank teller employment has fallen off a cliff" - well it _looks_ that way but actually it's more like halved from its peak because the bottom of the Y axis isn't zero. That's still a significant reduction, but it's not as dramatic as it seems at first glance.

Lies, damn lies...

I guess the trope in movies of masked bank robbers going in and threatening a scared bank teller will be a thing of the past soon. Pointing a gun at an iPhone doesn't have the same vibe.

I really enjoyed this article, I didn't bridge the idea of an ATM and mobile banking.

I think the idea raised about "Automated Firms" is a bit off in the picture painted in that linked article. I think the David Oks intention is to paint a picture of a fully automated company, but the linked article gives this impression:

> Future AI firms won’t be constrained by what's scarce or abundant in human skill distributions – they can optimize for whatever abilities are most valuable. Want Jeff Dean-level engineering talent? Cool: once you’ve got one, the marginal copy costs pennies. Need a thousand world-class researchers? Just spin them up. The limiting factor isn't finding or training rare talent – it's just compute.

In that above paragraph the author is saying to the reader that a human will be able to spin up and get these armies of intelligent workers, but at the end of the day their output is given to a human who presumably needs to take ownership of the result. Intelligent workers make bad choices or bad bets, but those AI machines cannot "own" an outcome. The responsibility must fall on a person.

To this end, I think the fully autonomous firm is kind of a fallacy. There needs to be someone who can be sued if anything goes wrong. You're not suing the AI.

Correlation is not causation.

There is no clear link to the iPhone causing lower teller employment.

This article does have a glaring omission: The 2008 financial crisis effects on the banking industry in general. When there are fewer local banks there are naturally fewer tellers employed. Bank failures peaked in 2010 in the aftershocks of the crises, which lines up nicely with the articles timeline.

This seems like a fluff piece. The tl;dr is that mobile banking (not the "iPhone") is what "killed" bank teller jobs. You can add online banking, credit cards, debit cards, and all other cashless payment options to that too.

This writing style where every section has multiple paragraphs of preamble, prolepsis, cold openers for cold openers, and tangents is infuriating. Get on to the point already.

I was born in the mid-80s and I've never had a bank teller experience. For me growing up, the bank teller was simply the tech support person for my debit card.

I didn't see the article mentioning how banks forced people to use ATMs or apps instead of tellers by having "green" accounts. where you would get a monthly account fee waved if you didn't go in to a branch.

Everyone I knew working as a bank teller quit because the actual job is screwing over old people with bad performing and long lasting investments. My bank calls me at least once a year to tell me my personal bank teller changed again.

Based on the fact that we've had ATMs since the 1970s and bank tellers didn't fall away until the 2000s, the correlation isn't there regardless of the causation.

Not sure it’s great to start this with jd Vance…

Many banks wanted their branches to become like Apple stores where it's self serve even though that's not what an Apple store is.

The interesting takeaway is that automation rarely removes jobs inside the existing paradigm. ATMs automated a task inside branch banking, so banks just reorganised labour around it. Smartphones removed the need for the branch entirely.

I mean, there is definitely a turndown period in labour force when a new tech is introduced, but it will defintely produce more jobs tho, as an evolution of human history. <3

Uhhh... if it's 'mobile banking' that killed teller jobs, what does the iPhone have to do with anything other than clickbait? (I guess I answered my own question)

The graph showing that "Bank teller employment has fallen off a cliff" is not zero based. This is pretty damn bad. The graph looks like it's going down 90%, but it's actually going from 350k to 150k. That's a ~60% drop which is a lot, but not "falling off a cliff".

> an AI system is literally a machine that can think and do things itself

why do so many writers claim this as a matter of fact? are we losing (or did we never have) a shared definition of the word "think"? can an LLM, at this time, function with zero human input whatsoever?

edit to add: these are genuine questions, not meant to be rhetorical :)

it's hard for me to gauge a broader understanding of AI/LLMs since most of the conversations i experience around them are here, or in negative contexts with people i know. and i'll admit i'm one of those negative people, but my general aversion to AI mostly has to do with my own anxiety around my mental health and cognitive ability in a use-it-or-lose-it sense, along with a disdain for its use in traditionally-creative fields.

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