Does the Internet compete with or complement bricks‐and‐mortar bank branches?

What does the Internet imply for the business of banking and how will it affect it? Are branch offices “doomed” and obsolete? Explores the major Swedish banks’ adoption of the Internet with a view to highlighting the ensuing changes in the way banks conduct their business and deliver their services. Although the number of branches is shrinking in rhythm with increased Internet use, their role is increasingly changing as banks move from a view of the Internet as a means for improving efficiency, to one of seeing it as a strategic device for transforming the business. Since more and more of the transaction processing load is taken over by technology, banks are concentrating on strengthening their marketing approach and re‐inventing their business model. In this context, traditional bank branches, with an infrastructure supporting transaction processing, are being transformed into an open‐space interface within which bank experts engage intimately with their customers, delivering specialised, advisory services.