Better Banking: A Frictionless Future

Ryan Heshmati

February 3, 2023

Transacting and banking methods evolve with time, and the last decade has been no different. The consumer has advanced, and will likely keep advancing, in the forms of conducting business. The more frictionless digital transacting experiences become, the greater adoption they will see, and that will be key in assessing changes to come in the following decade. In the coming years, new and unique alternatives, like biometric payments, for instance, may become more widely adopted. 

To understand where banking is headed, it is important to understand how it has gotten to where it is now. The checkbook, once a fixture of every transaction, lost its prominence with the rise of credit and debit cards. Plastic, however, has already seen a decline with the introduction of the digital wallet, and that trend is only accelerating. While currently at about $7.5 trillion, Juniper Research projects that by 2026, transactions involving digital wallets will grow to $12 trillion worth. 

With the growth of non-cash methods, questions arise regarding the need for physical bank branches and automated teller machines. N26 came out with a study predicting the erasal of bank branches by 2034. With regards to ATMs, even in 2015, its end was being called by the likes of the Smithsonian Magazine, boldly titling a piece “The ATM is Dead. Long Live the ATM!” It is unsurprising, especially with the rise of online banking, that these predictions are being made, and the changes might be great strides for the better.

At the root of the decline of bank branches and ATMs is the decline in the usage of paper currency. Working through a pandemic, public health has been thrust into the spotlight. In addition to banknotes possessing cocaine traces, they also have transmissible diseases of concern. For instance, Time reports that research has found salmonella and E. coli on banknotes, too. With such dangers adorning banknotes, the adoption of digital alternatives appears increasingly attractive.

Samuel Goldwyn asserted, “Only a fool would make predictions — especially about the future.” While taking heed of such wise words, one understands it is impossible to foresee what the future, in this case of banking, holds; research finds there are indications of the trajectory of transactions. Not only is the digital wallet’s prevalence on the upward slope, but bank branches and ATMs are on the decline. The implications for decreased physical banknote use are likely positive for public health, considering the diseases many notes are teeming with. The future of finance remains to be seen, but watching it play out will likely be quite fascinating.