Conventional wisdom on the future of bank branches has see-sawed so many times in the past decade that you need a score card to keep track. The ATM and telephone boom of the 1980s appeared to herald the end of the branch. In the United States, usage of ATMs has grown to almost 700 million transactions per year, and over 40 percent of households use telephone banking.

Paradoxically, however, the geographic acquisition strategies of Norwest, BancOne, NationsBank, and others seem to be celebrating the importance of physical distribution. According to Payment Systems, Inc., 69 percent of households still visit branches at least once a month. Moreover, small businesses, which account for one-third of retail bank profitability, continue to be heavy branch users.

Then again, today’s multimedia boom appears to be sounding another death-knell for branches. Forty percent of US households own personal computers, and 54 percent of those have modems. These households have access to full online banking through Microsoft Money, Quicken, and other services. Big branch closures at Chemical and PNC, among others, seem to confirm that branches are, in the words of Bill Gates, "going the way of the dinosaurs."

If everyone in America were to step...