Shoppers are also preferencing online banking and digital wallets on their smartphones over physical cards or cash, analysis from the Australian Banking Association found.

More than a third of people with smartphones use their devices to pay at the counter and one in 10 Australians regularly leave home without their physical wallet.

Cash withdrawals from ATMs continued to decline, falling a further 20 per cent in the year to August 2021 after dipping the year before.

ABA chief executive Anna Bligh said banks are pivoting investment towards online platforms and apps as the use of physical branches drops.

"It is no surprise to see banks invest in areas where customers prefer to bank," she said.

But there will continue to be face-to-face options with around one in five customers still preferring to bank in branches.

Eighty banks and financial institutions offer services at 3500 post offices across Australia, about half of which are in rural and remote locations.

Australian Associated Press