The Role of Retail Banking in the U.S. Banking Industry: Risk, Return, and Industry Structure

[...]This article documents the “return in retail” in the U.S.banking industry and offers some insight into why this shift hasoccurred. Trends in retail loan shares, retail deposit shares, thebalance sheets of U.S. consumers, and the number of bankbranches all indicate an increased focus on retail activities. We discuss the effect of this focus on individual banks and askwhether the related investment in infrastructure—principally,branch networks—is justified and sustainable for the industryas a whole. We examine a range of external sources: reportsby equity analysts, rating agencies, and consulting firms;discussions and data provided by banking companies in annualreports, investor presentations, and other public outlets; andacademic research examining various aspects of retail banking.[...]