Introduction

In the 1990s, amidst the hype generated by the computer industry, the future of retail banking seemed paved with technology, only to find an abrupt reversal in attitude towards spending on technology in the aftermath of the dot-com meltdown. By the year 2000, retail banking began to experience aftershocks from their technological enthusiasm as banks realized that many customer segments depended on the services found in branches. A larger than expected percentage of customers, including those who were already using the Internet, valued branches as complementary to the more sophisticated Internet offerings. The industry has realized that the potential cost savings of closing branches based solely on projected Internet growth rates may have been overstated. Banks soon noticed that, surprisingly, customers valued the branches, which launched many institutions into a process of chasing the needs of customers rather than leading customers to value.