Keys to community bank success: Utilizing management information to make informed decisions--The...

THE "PROFITABILITY EMPHASIS"

Financial industry pundits made numerous predictions in the early 1980s about the future state of the industry. They concluded that by 1990 the following would occur:

1. We would have a check-less society.

2. There would be only 50 banks nationwide.

3. The branch as we know it would be dead.

4. The majority of bank revenue would come from fee-- based products.

As with any set of predictions, these examples never came close to being true. In fact, the annual number of checks floating through the payment system was still increasing at double-digit rates until only a few years ago. While the industry has significantly consolidated, there are still over 9,000 financial institutions doing business in the United States. In addition, while branch banking has been in a constant state of change, there are more "brick and mortar" branches today than there were ten years ago. In fact, with the convergence of the brokerage, insurance and banking industries, many bankers believe there may be a resurgence of the branch network because of the potential advantage of this distribution channel in selling a multitude of products.