4 Banking Services That Could Disappear by 2036

Banks are expected to materially shift toward digital-first models over the next decade, with traditional in-person branches shrinking or becoming hybrid advisory hubs, cash usage and ATMs declining, personal checks largely disappearing, and simple passwords/PINs supplanted by biometric and AI-enabled identity verification. Real-time payment rails such as FedNow and person-to-person apps are accelerating the move off legacy payment methods, while rising fraud is driving adoption of multi-factor and behavioral biometric solutions—trends that favor fintech, payments and security vendors and portend implications for branch real estate and legacy banking operations by 2036.

Analysis

Market structure: Winners are card-issuers and wallet/platform providers (MQ, MA, V, FIS/FISV) and identity/security vendors (OKTA, CRWD) as payments and authentication migrate to tokenized, biometric, real‑time rails; losers include ATM/legacy cash logistics (Diebold Nixdorf/DBD analogs), check‑printing/clearing vendors and branch‑heavy regional banks (KRE constituents). Expect pricing power to shift to software/processor networks (take‑rates up 10–30bps over 3–5 years) while physical‑infrastructure unit volumes decline 20–40% by 2030 in mature markets.

Risk assessment: Tail risks include regulatory bans/limits on biometric profiling (state/EU privacy decisions), a major real‑time‑rail outage or large fraud event causing liability shocks, and macro shocks that revive cash demand. Immediate market moves (days) will be news‑driven; watch FedNow/real‑time volumes over next 6–18 months for adoption inflection; structural effects play out 3–10 years. Hidden dependencies: armored logistics, commercial RE, and core banking vendors are second‑order exposures that can transmit losses.

Trade implications: Direct: establish a 2–3% long position in MQ (benefits from card issuance/wallet issuance growth) and 1–2% longs in MA/V; initiate 1% long in OKTA/CRWD for security upside. Pair: long MQ vs short ATM/legacy hardware (DBD or short KRE constituents) to capture secular share shift. Options: buy 9–12 month calls on MQ/MA (25–35% OTM) and hedge regional bank exposure with 6–12 month put spreads on KRE (strike width per risk). Entry: scale into longs over next 3 months; exit/trim at +30–50% or if FedNow adoption stalls >12 months.

Contrarian angles: Consensus underestimates persistence of cash/checks in older demographics and SMEs — check volumes may plateau rather than vanish, creating niche cash‑service franchises. Biometric/security rollout could be slowed by regulation or fraud spikes, creating overstated upside in some fintech valuations today. Historical parallel: ATM adoption accelerated then plateaued; expect migration waves, not binary outcomes. Monitor KPIs: monthly ATM txn volumes, FedNow value/txns (target +20% YoY as go/no‑go), bank branch closure rates >10% YoY to validate acceleration.

Key Decisions for Investors

• Establish a 2–3% long position in Marqeta (MQ) over the next 3 months, scaling in 25% tranches; target 30–50% upside within 12–18 months if FedNow/real‑time payment volumes rise >15% YoY on guidance. Exit or re‑evaluate if MQ misses revenue growth by >5% vs consensus next quarter.
• Allocate 1–2% longs across payment networks (MA, V) to capture structural take‑rate expansion; use 9–12 month LEAP calls (25–35% OTM) to lever upside while capping cash outlay, sell into strength at +40%+.
• Initiate a pair trade: long MQ (2%) vs short ATM/legacy hardware exposure (~1% short DBD or equivalent) to capture margin migration; increase short if ATM transaction volumes decline >10% YoY in two consecutive quarters.
• Hedge regional bank exposure: buy 6–12 month put spreads on KRE (size 1–2% portfolio) with strike width sized to pay off if KRE falls >15% from current levels; reduce regional bank exposure by 3–5% if branch closure rates exceed 10% YoY.
• Monitor these three KPIs over the next 90–180 days before scaling: (1) FedNow monthly transaction growth (look for >15–20% YoY), (2) ATM transaction counts (watch for >10% YoY decline), and (3) biometric regulation developments (state/federal bills or EU rulings). Take profits or cut positions if these indicators miss thresholds by >20%.