alt Hacker NewsATMs didn’t kill bank teller jobs, but the iPhone did
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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?
I remember a few years back when I went into my banking branch to deposit a check my insurance company had sent me. When it was my turn at the teller, and I presented my check to her for deposit, and she said, rather rudely: "You can do this with your phone, you know?" On my way out of the bank, I remember thinking to myself that she was, essentially, putting herself out of a job by encouraging people to use their phones and not her. Turns out I was correct.
Most responses here are reacting to the specifics of ATMs and bank tellers, but I think the more interesting point, which seems to be the point of the story, is that paradigm shifts (e.g at-home vs at-the-bank banking) can be more disruptive than automation.
The interesting question of course is what paradigm shifts may be enabled by AI? Certainly all the use case emphasis so far has been on automation, whether that's businesses using agentic workflows to replace manual ones, or agentic coding tools to automate the coding (and to much less degree software engineering) process. So far it's all mechanical horses.
For example, maybe (I don't see it, but maybe) the need for software goes away entirely since it's just an intermediary to getting something done. What if the AI can just do things for you directly, given specific instructions? Rather than giving detailed instructions to an AI to help you code some software, you (or someone/something) instead just bypass that step and give it detailed instructions to do whatever the software would have been used to accomplish.
As another off the top of my head example, what about healthcare? Are doctors and doctors offices the tellers and banks? We need to advance from brittle LLMs to robust AGI first, but at-home diagnosis and prescription could certainly replace many routine doctors office visits.
Nice try, but no. When I was working for a US bank in the 80's, well before smartphone and even well before mobile phones the plan was hatched to reduce the number of offices because those offices were horrendously expensive. The big cost was the tellers and the handling of cash. For mortgages and other big ticket items there was a profit, but everything involved in the handling of money was a really large cost.
So they decided to reduce the number of offices. The ATMs were very specifically placed in the same location where the closed offices were, often renting just a fraction of the former space (usually a small cubbyhole attached to an outer wall). From 140 branches over a really small area they went to a small fraction of that, and ATMs took up the slack. Many people even preferred dealing with the ATMs rather than with the tellers because the ATMs were (at least initially) open 24x7.
Bank offices have all but disappeared. I think there are still two regional centers here and that's it. All deposits and all withdrawals of cash - as long as we still have cash - is handled by the ATMs. The iPhone came decades later.
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.
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.
This is a whole wall of post hoc ergo propter hoc.
You can’t state with any certainty that the ATM’s increased efficiency had anything to do with the expansion of bank branches. That could have simply been due to the strong population and economic growth. It’s quite possible (and I’d assume it to be true) that if the ATM had never been invented, there would have been far more bank tellers in 2005 than there were.
You also can’t assume the iPhone had that much to do with it. With the exception of depositing checks, there was nothing I couldn’t do on my computer in 2005 that I could on my phone in 2025. And you could always deposit a check at an ATM. It wasn’t like in 2006 we were all like “well I can only check my bank balance on my laptop so I’m going to drive there instead.”
It seems quite likely that other trends caused all of this.
I've been thinking hard about this paradigm shift while thinking about ideas for things to "vibecode"
I started by trying to think about ways of running a vending machine company autonomously using a finite state machine + agents. It turns out most of "automating" a vending machine company doesn't need LLM agents at all, and simply buying machines with reliable telemetry + a database + automated inventory could get you much further than replacing every or even some components with an LLM. The LLM could replace the person on the phone texting the laborers who refill and service the machines, perhaps autonomously order refills (but hey so can a cronjob).
The troubling thought I had is that AI does not displace the technicians, or the vending machines. It replaces the manager. The human manager is the component that is unnecessary. The entire global economy can eventually reflect this reality where most of the wealth is technically owned by humans but where the majority of financial transactions and decision making will be done by machines (at a level not yet seen)
Macroeconomic metrics will go up along with wealth and standard of living, but for actual flesh and blood humans, much of this will be irrelevant.
I feel like even the phrasing of the original assumption that "we have more bank tellers now that we had before", which seems to imply that ATMs didn't affect or even boost the number of bank tellers is flawed.
If you look at the graph, the number of bank tellers from 1980 to 2010 went from roughly 500k to 550k (a 10% increase). However, the U.S. population grew from 220M to 305M in the same period (a 40% increase). To me, that seems to indicate that less and less people were becoming bank tellers after the invention of the ATM. Although from the graph again, you can see that the correlation is quite poor anyway.
I'm based in the rich Western world. Whenever I travel elsewhere, I'm amazed by the cheapness of labor.
Humans would attend a gas station or fetch items in a store. Why? They're completely unneeded, I can do (and WANT to do) that myself.
I always feel sad about these people, trapped in an economic system that forces them into useless labour when they could spend their time learning actually useful skills.
Am I weird in that I don't think I ever interacted with a bank teller?
The only bank employee I ever interacted with was when getting a mortgage and maybe opening an account, but at least here in the Netherlands, I don't think there are any bank tellers left really? Old people complain of course, but am I missing something here?
EDIT: I'm pushing 40, relevant here I guess
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.
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.
ATMs came in the 90s, online banking in the 2000s, banks closed most of their branch offices in the 2010s i think. Gradually cash disappeared, so now you don't have ATMs either anymore. Than after covid they discovered that even the final bit of financial consultancy could be done via zoom, online.
Banking apps came later, long after banks had moved most interaction online.
I think people sometimes forget how backwards the US is, when lived in SF 7 years ago, you couldn't do wire transfers online. Maybe some banks, maybe some people.
But I constantly had issues with debit cards being rejected, wire transfers having to be done on a branch, etc. I doubt there is a modern bill payment system yet.
Where as in Denmark, I've bought house, mortgage, wired >100k, bought stonks, none of it required me going to a branch.
I pay a manual bill maybe once or twice per year. I do it online or in an app, I hate the process. But automatic bill payment takes care of 99% of my bills!
From my experience, the banks did kill the teller jobs to save few pennies on the dollar. The result, here, is a very poor service compared to what we had in the past. I have witnessed very sad, inhumane and awkward situations in Greek banks.
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.
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.
My experience of building automations with AI is that we aren't yet at the ATM phase. AI is going to help us to automate existing processes, but it's not the technology that will displace humans.
That technology doesn't exist yet.
If anyone who likes to geek out on old hardware, the image of the teller shows hardware that is part of the IBM 4700 Finance Communication System released in 1982, specifically the IBM 4704 Teller Terminal:
Archived docs:
https://bitsavers.org/pdf/ibm/4700/
Article on the history of ATMs:
https://computer.rip/2026-02-27-ibm-atm.html
(ChatGPT was of no use figuring this out)
The same pattern is playing out in API payments right now. Traditional API billing (Stripe subscriptions, API keys, monthly invoices) is the "bank branch" model: it works, but it requires human setup, identity verification, and ongoing account management for every provider.
HTTP 402 "Payment Required" has been a reserved status code since 1997, unused for nearly 30 years. Now protocols like x402 and L402 are finally implementing it: a server returns a 402 with a payment instruction, the client pays (stablecoins or Lightning), and gets access. No signup, no API key, no billing relationship.
This isn't replacing Stripe any more than ATMs replaced tellers. Most API providers will keep using traditional billing. But there's a new category of consumer that can't use the old model at all: autonomous software agents. An AI agent can't fill out a signup form, pass KYC, or manage a credit card. Per-request micropayments over 402 let agents acquire API access without any human in the loop.
The parallel to the article is exact. ATMs automated a task within the existing branch paradigm. Mobile banking eliminated the need for the branch. Similarly, better developer portals automated API key management within the existing billing paradigm. Machine-to-machine micropayments eliminate the need for the billing account entirely.
You mean a smartphone?
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.
As AI gets better the bottlenecks will be the place to watch. Bottleneck jobs will become more productive => they either pay more or more bottleneck jobs will be created or some in between situation occurs. This will continue until no bottlenecks are left.
What is a Bank nowadays. It is nothing. It is a virtual construct and software that we are supposed to put our trust into, where banks have a history of betraying that trust.
I don't feel the phone conclusion is quite correct, because it's not just the need to use an ATM that has dropped. The need to use a banking app or website has also dropped.
The behavior of companies has changed dramatically. Checks have almost vanished, you can often set up automatic payments, and you can get bank balance notification emails/messages. A large portion of banking interactions are fully automated.
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...
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.
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.
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 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.
I think old people who liked to interact with bank tellers passing on is a possible factor too?
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.
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.
*Mobile phones. Calling and texting your bank for account info and actions predates the iPhone... even Venmo started as a text message service before it was an app. The iPhone may have just been the nail in the coffin.
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.
Eh, bank teller jobs were dying and on their way out long before the iPhone showed up. Back in the early 00s local branches were downsizing left and right. My small rural town went from having three banks with like 4 tellers in each bank, in the mid 90s, to one bank with 1-2 tellers, in the mid 00s.
By the end that bank only dealt with mortgages, other loans, and saving accounts.
Online banking and the rise of card use was a huge reason for that. It is almost 20 years since I last time went to a physical bank to withdraw or deposit money, or pay a bill. Probably even longer for paying bills.
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.
David Oks at it again.
There is also a premium for the human touch. I currently pay $15 fee to my bank a month. Going rate here for a bank account is $0.
But the $15 bank has a call center that is dreamy - reliably connected to a competent focused individual in under 3 seconds.
It doesn't matter how good the tech & automation is I place an economic value on that ability to pick up the phone and talk to a human. LLMs are crushing it but I'm not fuckin paying $15 for an LLM.
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
Misleading graph alert! The green graph's vertical axis starts at 150,000 instead of 0. It shows the number falling to about 50%, not 10% as it appear at first. The misleadingness fits the author's narrative, which is how it always seems to go so I think it's safe to assume malice and that he's trying to mislead his readers.
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)
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?