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Ongoing restructuring of retail banking

Author

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  • Daniel Orlow
  • Lawrence J. Radecki
  • John Wenninger

Abstract

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.

Suggested Citation

  • Daniel Orlow & Lawrence J. Radecki & John Wenninger, 1996. "Ongoing restructuring of retail banking," Research Paper 9634, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednrp:9634
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    Cited by:

    1. Beverly Hirtle & Christopher Metli, 2004. "The evolution of U.S. bank branch networks: growth, consolidation, and strategy," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 10(Jul).
    2. Lawrence J. Radecki, 1997. "Potential employment effects of the restructuring of retail banking," Economic Policy Review, Federal Reserve Bank of New York, vol. 3(Feb), pages 75-78.
    3. Gangopadhyay, Partha & Nilakantan, Rahul, 2021. "Peer effects and social learning in banks’ investments in information technology," International Review of Economics & Finance, Elsevier, vol. 75(C), pages 456-463.

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    Keywords

    Branch banks; Bank management;

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