ANZ at Sylvia Park, in Auckland, does not have traditional tellers.

Expect to see fewer bank branches handling cash as New Zealanders switch to digital finance options.

New Zealand Bankers' Association chief executive Karen Scott-Howman said a recent report found New Zealand led the world in digital banking uptake. More than 80 per cent of New Zealanders now prefer to manage their money online.

"There's actually a bit of a cash conundrum happening in New Zealand," she said.

"While we overwhelmingly prefer to make everyday payments electronically, the amount of cash in circulation is growing year-on-year. At the moment there's over $5.5 billion in cash in circulation. That's up from nearly $4b in 2010."

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New Zealand recently upgraded its bank notes, at a cost of up to $40 million.

Banks said they were adjusting their systems to cater for a world where consumers wanted less physical cash in their pockets.

ASB executive general manager retail Russell Jones said branches in New Zealand had already noticed a drop in the requirement for cash to be handled over the counter.

"Increasingly the sorts of volumes of cash handling people are doing can be handled by ATMs to get cash out and by ATMs to put deposits back into the system. The amount of cash that is going through branches over the counter is reducing."

He said there were already two ASB branches that only dealt with cash via ATMs.

The rate of cheque use was dropping by about 20 per cent a year, he said, and sales were moving to digital channels as opposed to being handled by staff at a rate of 1 per cent per month.

At ANZ, spokesman Stefan Herrick said the way customers used branches was changing. "More customers are now doing their day-to-day banking online and visit the branch only for more specialised advice on larger financial decisions, such as investments or a home loan. On average customers visit a branch only one or two times a year," he said.

"As such, the amount of cash in our normal branches is declining and we would expect that trend to continue. These branches will have small amounts of cash for the foreseeable future."

He said ANZ, too, had sites that were virtually cashless. Its Albany mall and Sylvia Park centres did not have tellers but cash could be processed through smart ATMs

A Kiwibank spokesman Bruce Thompson said its branches were also carrying cash at reduced levels.

"Things like tap'n'go, Apple Pay and mobile wallets along with other mediums for payments have reduced the amount cash in circulation but by no means eliminated it."

ASB's general manager of payments, Matt Bartlett, said a younger generation of consumers would bring still more change.

"There is a whole new group of our customers now who have grown up with the likes of Facebook, Google and big messaging platforms. It seems to me that a lot of those big platforms are going to be moving into payments."