By Katie Pisa
(CNN) – The checkbook is dead. While we’re at it, let’s also write an obituary for the card readers.
And if you’ve ever been concerned about who might be seeing your PIN over your shoulder at the ATM, or the exorbitant fee you’ll have to pay for that money transfer, fear not.
In the next few years (we are talking about the near future), these problems will not exist, as the way we conduct our banking and control our finances will change enormously. It has already done so in many ways.
“We are in this unprecedented space where technology is advancing at such a rapid rate that it is starting to scare everyone,” said Gi Fernando, founder and investor of Free: Formers, a company that helps businesses and young people unemployed with digital skills.
“It will be sooner than you think,” said Fernando, who claims that in five years, the technology behind how we handle our banking operations and our finances is going to be unrecognizable.
Here are five things you probably won’t need in five years to do your financial operations.
Pin numbers and card readers
As biometrics becomes the choice of more companies, outdated PIN numbers and heavy card readers will be a thing of the past, Fernando said.
Fingerprints, retinal readers, belt buckles, watches, and even contact lenses will replace old pin numbers and card readers in our modern transactions.
“We will see more use of biometric information,” agrees Steven Lewis, a global banking analyst at Ernst & Young. “Fingerprints and eye scanners will replace signatures and become more prevalent,” he said.
“Buying things is going to be easy and hassle-free,” said Fernando, who described a scenario in which shoppers enter a store, choose what they want to buy, pay through their device or laptop, and leave.
Banks … as you know them
Although there will still be physical banks, many of them will not exist as we know them today. Some of them will appear in supermarkets, coffee shops, temporary stores and concessions, says Fernando.
Like the 14th century coffee shops where business deals were struck, these new banking environments will serve a similar purpose. “People have a need to meet face to face,” added Fernando.
So while there will still be bank branches, many of them will look more like an Apple store, he suggests.
Cash and checks
There will always be cash despite what advocates of a cashless society might predict. It’s fast, easy, accepted almost anywhere, and can keep your paper track simple.
“It will take longer for the cash to disappear,” Fernando said. Meanwhile, smartphones and contactless payment methods will grow in popularity as a way to buy our groceries, clothes, train and bus tickets and much more.
However, we cannot say the same for checks. “Over the past few years, the check is almost dead,” Lewis said. “We are making use of digital technology to write that check,” he said.
“We are going to have a number of different technologies. Those who adopt it first will be very willing to use their phones. Others will still have cash, checks and cards, ”Lewis added.
Do you need money but your bank does not want to grant you the loan? Fear not, there are different models of groups of loans between individuals (P2P) and websites that will loan money directly to individuals and businesses without going through a traditional financial institution.
Lending Club and Prosper are the two largest entities offering peer-to-peer loans in the United States. In 2013, they made $ 2.4 billion in loans, which is a significant increase from $ 871 million in 2012. And a recent report by venture capital firm Foundation Capital predicts that the global market for loans will be between individuals could exceed $ 1 trillion by 2025.
Another example, Funding Circle, in the UK, projects massive growth. While banks still make the majority of loans in the UK (over 85%), Funding Circle says it expects to occupy a large chunk of that market over the next five to 10 years.
“We have seen significant growth among private lending entities over the past few years,” Lewis said. “Although they only represent a tiny fraction of the overall loan market, their approach is beginning to change the traditional model of bank lending. This is so so that some banks are beginning to partner with entities that provide loans between individuals to offer more options to customers.
Electronic transfer companies.
Soon, the days of going to the bank or money transfer agency to send your hard-earned money home or abroad could be over. There are already a wide range of companies online that offer money transfers with lower fees per transaction; Transferwise, Kantox, CurrencyFair are some of them.
Social media could broaden the appeal. The financial services company Azimo, for example, allows users to transfer money through Facebook, as well as through the Azimo website and app. While a commercial bank charges an average of 12% for sending remittances and a traditional transfer operator charges more or less 6.5%, Azimo says it only charges 2%.
Azimo is growing rapidly, doubling in size every two and a half months, said Michael Kent, the company’s chief executive. “We estimate that around 98% of money transfers are not yet online,” said Kent, “but now that the numbers are turning our way, we see that that is rapidly changing and will soon be a tipping point, as customers realize the cost savings and benefits of digital operations. ‘
However, it will not be an immediate change, warns Lewis. “Certainly other providers will increase competition, but we are also seeing a number of banks that are more restrictive in the realm of money transfers, as they grapple with increasingly complex anti-money laundering provisions.”