Not so long ago customers would sign up with a bank and stay a loyal customer for life. Perhaps the difficulty in moving an established account engendered this life long relationship, or just a lack of choice. No matter, today Information Technology (IT) makes that transition far easier, and indeed, we are already seeing an emerging world of virtual organisations that include banks. The advantage is simple - open 24 hours a day - always available for business with or without human intervention. For many people the notion of travelling into town to visit a physical branch to conclude business is already an anathema. For the most part it can all be done by telephone, and soon, on-line from the computer on your desk.

So what are the fundamental drivers invoking all this change? For aeons mankind has taken raw materials and shaped them into artefacts we could barter. Expensive physical articles have been dominant in the market place with money an absolute necessity to oil the wheels of commerce. Putting aside the occasional economic crash or misdemeanour, banks have been an essential cornerstone of the economic system and necessary to support global commerce. Lately a more ethereal market has arisen within a newer world of bits - not raw material. The information world and market is concerned with the construction and production of a new kind. Manufacturing bits can be very expensive, but their replication, storage and transportation is not. Using computers, networks and terminals instead of warehouses, trains, planes, trucks, wholesalers and shops, means we can distribute faster and sell far more. Hence, we are witnessing the start of something new.

Macro-economies based on micro-prices is a trend that is already visible as software and services are sold on-line, on demand, any place, any time. Libraries of classic books, reference works and new interactive multimedia entertainment packages are available. There are over 24,000 CD titles currently on sale at prices varying from tens to hundreds of pounds. The complete works of William Shakespeare can now be bought for 2.5 pence as part of a CD collection of 2000 classics costing ?50. Soon, such titles will be on line at an even lower price. We also see on-line travel and furniture shops, clothing catalogues and many other traditional high street activities becoming available through IT to the office and home. This future of micro-money will see the birth of new macro-economies, and companies that go on-line will see some remarkable new phenomenon. People will buy and discard products faster, markets will become more fickle, companies will be created, come to dominate, and then die faster, as the whole economic cycle speeds up through enhanced productivity and communication.

At this point traditional banks are really are no more than databases with no need of direct human contact required for most transactions. They must be electronic as it is wholly uneconomic to process cheques or coinage in such small amounts. Unfortunately it is also clear that anyone with a reasonably powerful PC and a modest software programming capability can open their own bank. So it is not entirely by accident or inspiration that car manufacturers and telephone operating companies have now moved into banking. Perhaps large software suppliers will soon do the same as they can make enormous savings by integrating their entire operation. One computer company that recently put its sales and marketing catalogue on-line now deals with 1.7 million enquiries a week and has seen a trade increase of over 50 per cent. This is fundamentally impossible for humans as the interface of a conventional retail outlet chain.

Telecommunications and IT are developing at an incredible rate. Every year our ability to process, store and transport information doubles and the cost reduces. Within a decade the computer on your desk will be 1000 times more powerful, in two decades a 1,000,000 times and so on. With this explosion of ability will come artificial intelligence, creativity, control and manufacture on a new and expanding scale. As we move into the 21st Century the information age will gradually migrate toward experience with virtual worlds in education, training, transport, work, entertainment medicine and care - plus many others. All of these new industries will require a new commerce - a new way to charge and pay. This will be a far faster world of much more for much less. People working from anywhere for anyone with no jobs for life will be the dominant mode. A more chaotic and opportunistic world far removed from that of today.

All of this will further erode the traditional banking sector and be compounded by a disappearing commodity - coinage. It seems remarkable that metallic and paper tokens (money) are still used in a world of information technology and electronics. Credit cards, electronic cash cards, the electronic purse (MONDEX) and other on-line variants are in everyday use and there are further startling developments on the horizon. In this information world no money is exchanged - databases are merely updated. There is no gold, or any need for it - it is a moribund concept. In a sense, geography is also dead and for the customer the choice will increasingly become stark. You can still travel into town, with all the inconvenience and time wasting it entails, and pay the additional overhead of a shop, wholesaler and distribution chain. Alternatively, you can go direct to manufacturer in the USA, make a purchase and have your software delivered on-line at a fraction of the price, by-passing the VAT man in 2 countries. At the same time the databases of only two banks, customer and producer, change negligibly. No middle men, no non-value-add links in the chain. A new world of instant gratification, convenience, and more for less.

We can now see banking for what it really is - not money, just information. Interestingly this information market spawns a new concept; information about information. The first evidence of this comes from the United States where publishing details of television programmes and information databases makes more money than those producing the raw information - programmes. Here is a new opportunity - banks hold a vast amount of information about companies and individuals, they have the databases and the infrastructure to supply new services.

So what should conventional banks do? Firstly they have to recognise that they are increasingly in the 'information about information' business. For many organisations billing for services and goods supplied is becoming a very large operating overhead and a process they do not want to be in. Banks do this extremely well and we might see a future where they become an ethereal point of sale, providing a range of financial, physical and information goods supply services. Why do we have gas, electricity, water, television, entertainment, hotel and insurance bills as separate entities? These are very often paid by direct debit and could easily be integrated into one electronic statement. In the information future we may therefore see banks becoming the universal billing system for all human activity. This would then allow some novel service groupings able to provide new opportunities for purchase incentives, discount and loyalty bonuses, price and cost reductions. Clearly, as the bureaucracy involved in collecting and moving money around the planet is reduced to its bare essentials, data, the nature of banking will migrate into new information based activities.

Banks as the ultimate billing machine could also focus on charging for the important, negotiating the tractable and providing instant access on the screen. This could be the primary point of contact, but it is interesting to contemplate the future of high street banks as they may remain a required point of human interaction for things information technology cannot do. For some time yet detailed negotiation will require human contact.

In 20 years we are likely to look back with wry humour at the arguments of long gone politicians and a large proportion of the population with their insistence for regional currencies bearing the profile of the head of state. Such concepts are likely to have been assigned to museums as the obvious alternative, bits in databases, take over. By 2015 our world and economy will have been transformed by IT and machines with intelligence approaching our own. They may well be smart enough to question and by-pass the old human ideas that necessitated banks, and if not in 20 years, then in 30. In 2015 some coinage and paper money might remain, and perhaps even a few cheques, but I wouldn't bank on it.