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When ATMs were introduced to banks in the 1980s, people thought bank tellers would quickly stop existing. Over time, each bank branch did end up employing fewer

When ATMs were introduced to banks in the 1980s, people thought bank tellers would quickly stop existing. Over time, each bank branch did end up employing fewer tellers. However, ATMs made it cheaper to operate bank branches, so more bank branches opened and there were eventually more bank teller jobs over all. This comforting trend ended several years ago. Here's a blog that plots teller employment numbers up through 2015: https://greatdisruption2018.com/the-project/the-parable-of-the-bank-tellers/ https://greatdisruption2018.com/the-project/the-parable-of-t... Here's the BLS data and outlook for the future: https://www.bls.gov/ooh/office-and-administrative-support/tellers.htm https://www.bls.gov/ooh/office-and-administrative-support/te... Teller employment peaked in 2007 at over 600,000. It's down to 472,000 as of 2018 and projected to decline another 12% by 2028. You need to keep following the numbers to distinguish "the prediction of technological unemployment was premature" from "the idea of technological unemployment is mistaken."

program_whiz 7y ago
Another note on that -- this is with increasing population and as they say, more bank branches opening than ever, so the automation effect has been very strong.
- VHRanger 7y ago
  Arguably, a lot of the recent advances in banking automation aren't ATMs, they're online banking and banking apps.
snarf21 7y ago
This is exactly what happened but I assumed that the real cause of more branches was different. When banks stopped having to keep banking and investments separate, they wanted all the customers they could get. When you are averaging 10+% in the stock market while only paying 1% to consumers, you want as many consumers as possible. Then the only reason people would switch would be if a specific branch was more convenient for them or had more free ATMs. This became a question of customer acquisition. Plus you can write off the building and have a solid real estate business (ala McDonalds) for free. This also is what has pushed the banking consolidation trends so much. Banks could no longer get new customers via switching so they starting buying all the local players to keep their balance sheets growing.
asdfasgasdgasdg 7y ago
Also worth noting that this is absolute number of tellers, not tellers per US resident. Automation is very clearly reducing the demand for tellers on a per-potential-customer basis. For example, if we had seen the ratio remain flat, starting in 1980, we'd have expected a 50% growth in the number of tellers. But in fact it was flat (at least on the original article's graph). I can't find numbers on what fraction of the population was unbanked in the '80s, but I can only imagine it was higher than it is now. That also is not accounted for in the parable.
- LeoTinnitus 7y ago
  As someone who has worked at a financial in a rural area, I can assure you these people are still going to need tellers. I mean can you imagine explaining daily why someone gets charged an NSF fee or telling them that their check is a fraudulent check (sent by a scammer)? Also these people hate technology more than communists. So trying to sell them online banking is like telling them to become atheist socialists ready to fight for the revolution.
  - asdfasgasdgasdg 7y ago
    Nobody but nobody is saying that tellers will go away completely. Even buggy drivers still exist. The question is how many there will be.
VHRanger 7y ago
Author here. > Teller employment peaked in 2007 at over 600,000. It's down to 472,000 as of 2018 and projected to decline another 12% by 2028. By that point we're not talking about the effect of ATMs anymore, which were introduced in the late 1980s/early 1990s. This effect is more likely due to online banking and banking apps. We don't know yet how this change reallocated > "the prediction of technological unemployment was premature" from "the idea of technological unemployment is mistaken." Not really. If you look at the other example (spreadsheet apps and bookkeepers) you see that even if a job stops existing, the remaining tasks get allocated elsewhere over time. This overall dynamic is supported by the researchers in labor economics (see papers linked in the post) This doesn't mean the transition is smooth, or even benefitial, for the job holder, but it doesn't translate to long run unemployability.
- freewilly1040 7y ago
  Even if the decline in teller employment is not due to ATM's, the parable still suffers if another convenience innovation came along and did kill jobs.
  - VHRanger 7y ago
    The problem isn't that automation kills jobs. Those jobs reallocate over time. We've seen automation act on the economy since the 1820s and nothing about deep learning or big data changes these dynamics. The problem is that those who do lose their jobs have their lives altered for the worse, and those who get the better parts of automation don't share the benefits with the ones losing from it.
  - VHRanger 7y ago
    It didn't kill jobs in aggregate -- unemployment is at its lowest in decades. The bank teller jobs might be disappearing over time, but they'll get reallocated. The point of the article is that that reallocation process can be painful for those affected and increases inequality.
    - chii 7y ago
turtlecloud 7y ago
Well since the population of the US also increased, the actual decline would be much more pronounced if population had remained constant.
cjblomqvist 7y ago
I'm a swede, who lived in the US 2009-2011. Back then I was amazed (and my friends as well when I told them about it) about how behind the US were tech wise when it comes to banking. From what I understand, we're in the forefront in Sweden, and now with all the bank startups, it's just taking off for real. In Sweden the number of offices almost halved between 2007 and 2019. It takes time for these kinds of shifts to really take off. As a tech guy, I believe tech guys are often to optimistic about how fast non-tech _humans_ adopt tech (not because of tech, but because the change in lifestyle, which takes a lot of time for people). It's all the standard curve of adoption (first hype, then dispair, and then it truly happens and diffuses into massmarket).

program_whiz 7y ago

Another note on that -- this is with increasing population and as they say, more bank branches opening than ever, so the automation effect has been very strong.

VHRanger 7y ago
Arguably, a lot of the recent advances in banking automation aren't ATMs, they're online banking and banking apps.

snarf21 7y ago

This is exactly what happened but I assumed that the real cause of more branches was different. When banks stopped having to keep banking and investments separate, they wanted all the customers they could get. When you are averaging 10+% in the stock market while only paying 1% to consumers, you want as many consumers as possible. Then the only reason people would switch would be if a specific branch was more convenient for them or had more free ATMs. This became a question of customer acquisition. Plus you can write off the building and have a solid real estate business (ala McDonalds) for free. This also is what has pushed the banking consolidation trends so much. Banks could no longer get new customers via switching so they starting buying all the local players to keep their balance sheets growing.

asdfasgasdgasdg 7y ago

Also worth noting that this is absolute number of tellers, not tellers per US resident. Automation is very clearly reducing the demand for tellers on a per-potential-customer basis. For example, if we had seen the ratio remain flat, starting in 1980, we'd have expected a 50% growth in the number of tellers. But in fact it was flat (at least on the original article's graph). I can't find numbers on what fraction of the population was unbanked in the '80s, but I can only imagine it was higher than it is now. That also is not accounted for in the parable.

LeoTinnitus 7y ago
As someone who has worked at a financial in a rural area, I can assure you these people are still going to need tellers. I mean can you imagine explaining daily why someone gets charged an NSF fee or telling them that their check is a fraudulent check (sent by a scammer)? Also these people hate technology more than communists. So trying to sell them online banking is like telling them to become atheist socialists ready to fight for the revolution.
- asdfasgasdgasdg 7y ago
  Nobody but nobody is saying that tellers will go away completely. Even buggy drivers still exist. The question is how many there will be.

VHRanger 7y ago

Author here. > Teller employment peaked in 2007 at over 600,000. It's down to 472,000 as of 2018 and projected to decline another 12% by 2028. By that point we're not talking about the effect of ATMs anymore, which were introduced in the late 1980s/early 1990s. This effect is more likely due to online banking and banking apps. We don't know yet how this change reallocated > "the prediction of technological unemployment was premature" from "the idea of technological unemployment is mistaken." Not really. If you look at the other example (spreadsheet apps and bookkeepers) you see that even if a job stops existing, the remaining tasks get allocated elsewhere over time. This overall dynamic is supported by the researchers in labor economics (see papers linked in the post) This doesn't mean the transition is smooth, or even benefitial, for the job holder, but it doesn't translate to long run unemployability.

freewilly1040 7y ago
Even if the decline in teller employment is not due to ATM's, the parable still suffers if another convenience innovation came along and did kill jobs.
- VHRanger 7y ago
  The problem isn't that automation kills jobs. Those jobs reallocate over time. We've seen automation act on the economy since the 1820s and nothing about deep learning or big data changes these dynamics. The problem is that those who do lose their jobs have their lives altered for the worse, and those who get the better parts of automation don't share the benefits with the ones losing from it.
- VHRanger 7y ago
  It didn't kill jobs in aggregate -- unemployment is at its lowest in decades. The bank teller jobs might be disappearing over time, but they'll get reallocated. The point of the article is that that reallocation process can be painful for those affected and increases inequality.
  - chii 7y ago

turtlecloud 7y ago

Well since the population of the US also increased, the actual decline would be much more pronounced if population had remained constant.

cjblomqvist 7y ago

I'm a swede, who lived in the US 2009-2011. Back then I was amazed (and my friends as well when I told them about it) about how behind the US were tech wise when it comes to banking. From what I understand, we're in the forefront in Sweden, and now with all the bank startups, it's just taking off for real. In Sweden the number of offices almost halved between 2007 and 2019. It takes time for these kinds of shifts to really take off. As a tech guy, I believe tech guys are often to optimistic about how fast non-tech _humans_ adopt tech (not because of tech, but because the change in lifestyle, which takes a lot of time for people). It's all the standard curve of adoption (first hype, then dispair, and then it truly happens and diffuses into massmarket).