The retail banking industry in the United States is experiencing a period of significant change. By the late 1990s, banks expected that retail customers would eventually conduct all banking online and forsake the branch. However, given the branching boom seen in the last couple of years, and consumers' preference for visiting the bank for many financial activities, the transition to using the Internet for more complex financial activities for the most part has yet to occur.

In fact, banks have been building branches at rates never seen before in the last several years. Meanwhile, the number of banking institutions has been steadily shrinking. Throughout this consolidation, customer preferences have been loud and clear: sit down with us, listen to us, and get to know us. Many banks, like Washington Mutual and Umpqua Bank, have tried to respond by making branches more comfortable and customer service more accessible. The environment being created by banks today in their branches is more closely aligned with a retail shopping experience than a traditional banking experience.

Banks have realized that in many cases, the best way to attract the attention of consumers is by communicating to them through more specialized versions of traditional banking products. Products and services are being tailored especially to younger consumers (to capture their loyalty early) and to Baby Boomers.

This report analyzes the changes and trends in the retail banking industry in the United States, from customizing products to reach specific demographics, to the effects of the Internet on retail banking, to untapped markets, to consumers’ desire for convenience. It also discusses industry consolidation, the shrinking supply structure, and trends in advertising fight for brand awareness. The report takes an in-depth look at different channels of distribution, including standalone branches, in-store branches and the Internet.