Ongoing restructuring of retail banking

The largest U.S. commercial banks are currently in the process of restructuring their retail operations. This paper describes the innovations that are being adopted, explains the integrated strategies for restructuring, and reviews the policy issues that emerge. We find that banks are restructuring by developing complete customer-relationship profiles, switching over to remote electronic delivery channels (phone centers, home banking, and next-generation ATMs), relocating branches to large retail outlets, and redesigning selected branches as investment centers. The immediate goal of restructuring the branch network is to cut costs and stop the erosion of the customer base. The broader goal is to be well-positioned to take additional steps three to five years from now.