NAB targets smaller sized 'smart' branch

National Australia Bank says its branches are likely to get smaller in the future, as more people do their day-to-day banking online using smartphones.

NAB on Thursday opened in Melbourne its first "smart store", which expands on self-serve technology seen in supermarkets.

The stores will reduce the size of NAB's branches by about 25 per cent and will be introduced progressively in coming years.

NAB head of network design and capacity planning Peter Holmes said the number of branches would stay the same but there would be fewer staff. "There will be a small reduction," he said.

The layout of the store breaks more than a century of tradition.

Gone are the counters and teller cash drawers. Instead, there are iPads, smartphones, widescreen televisions and bench-size tablet computers.

Mr Holmes said branch staff would be freed from day-to-day banking - with automated teller machines processing deposits and withdrawals - to have "more conversations with customers" about home and personal loans, as well as specialised banking.

The overhaul comes after the number of branch transactions slipped almost 10 per cent in the past year.

In the same period, mobile internet banking jumped 111 per cent.

More than 6 million Australians use mobile banking, according to data from the financial services consultancy Market Intelligence Strategy Centre.

NAB is not the only bank reshaping its branch footprint.

Last year, Westpac outlined plans to spend $240 million overhauling its branch network.

The head of Westpac's retail and business banking, Jason Yetton, said there would be fewer tellers but more highly skilled advisory staff.

"[Mobile phone banking] has completely altered the way our customers bank with us," Mr Yetton said.

But NAB digital and direct banking general manager Antony Cahill said the rise in mobile internet banking was not at the "exclusion of traditional channels" such as branches.

"Our smart store integrates all those options to make banking simpler and smarter for our customers," Mr Cahill said. While most transactions can be made in the smart stores, buying foreign currency or withdrawing more than $1000 would still need to be done at a "full-service" branch.

With 749 branches, NAB has the smallest network of the top four banks. Westpac leads with 1273 outlets, including its St George network, Commonwealth Bank has 1158 and ANZ 784, according to the Australian Prudential Regulation Authority.