Consumers can expect to see more bank branches without cash, as the boom in digital finance pushes banks to use their retail stores to sell more complex financial products.
As cash and cheque usage slide, an executive from Commonwealth Bank said cash would probably "disappear" from more branches, or cash transactions would be conducted through machines rather than over the counter.
Citi last year removed cash from its six Australian retail branches, and figures published on Friday showed an acceleration in the decline of cash and cheques throughout 2016.
"We will probably see cash disappearing out of branches more and more," CBA's general manager of everyday banking and payments, Michael Baumann, said on Friday.
The bank would still need to be able to accept cash from small businesses, suggesting some cash would remain in branches in some form, he said, but there could be less need for staff to handle cash transactions.
"I could see absolutely that for security purposes but also because the demand is not there, that actually cash will disappear, or more [cash] will go into a deposit machine and ATM machine rather than actually doing it over the counter," he said at the Australian Retail Banking Summit in Sydney.
Figures published on Friday underlined the rapid decline in the use of cheques, which plunged 20 per cent in 2016, the largest drop recorded by the Australian Payments Network to date.
Cheque usage has plunged 56 per cent in the past five years, while ATM withdrawals have fallen 22 per cent over the same period.
"Looking at the payment choices that Australians make, it's clear that the vast majority of us are moving away from cash and cheques faster than ever before," Australian Payments Network chief executive Dr Leila Fourie said.
The major banks will not remove cash handling across the board as Citi has done, given their massive retail and small business customers base.
Instead, banks are responding to the shift towards digital finance by installing machines for cash handling and focusing their staff on lucrative activities such as sales of home loans and financial advice.
National Australia Bank's executive general manager of retail, Bob Melrose, said customers still wanted to talk to bank staff in person about more complex products.
"The change we are seeing is that as more people have access to digital and mobile devices, they have more questions," he said at the same conference as Mr Baumann.
Indeed, some bank-owned brands such as Westpac-owned RAMS already run shopfronts without cash.
Ainslie van Onselen, executive director of RAMS, said face-to-face conversations were important for first-home buyers, a key target market, and it was able attract deposits online.
While use of cash and cheques is in decline, payments on cards jumped 12.3 per cent in 2016, while direct debits and credits lifted by 8.6 per cent. The growth in digital payments has been helped by growing use of smart phones, and the rise of online retail, which hit an estimated $21.6 billion last year.
