This month's Soundoff was prompted by a recent Coopers & Lybrand study that suggested retail staff reductions might need to approach 50% in 10 years. The study was based on interviews with 50 banks in more than a dozen countries. Executives said changing customer needs will force banks to provide electronic services "anytime, anywhere, anyhow."

* Kenneth Mathis Partner, Coopers & Lybrand Consulting, New York Based on what our clients in the United States and around the world have told us, everybody sees a dramatic change. On the one hand, it's flippant to say 50% because who knows? You can't base revenue growth just on reducing costs and reducing head count. Nobody really knows the answer, but retail banking is going to be different than it is today. We may hit upon a structure that says we need to triple our outbound telephone call volume. We may then take all our retail staff and put them in a telephone call center. I'm very uncomfortable saying 50%. It is going to be a material number - maybe 30% or 40%. It may be 70%. We're more comfortable saying we need to start with the customer and from that determine what your distribution channels are, what products you want to offer, and what market segments you want to go after.

At the end of the day, you need to drive toward that. And however many people you need, that's how many you have, as opposed to starting with an answer. Gerald H. Lipkin Chief executive, Valley National Bancorp, Wayne, N.J.

Never. Not in our bank. The number of people we have working in our bank is kind of tight.

Our people have to work harder, and they may have to work smarter. But certainly I don't see the job being done by significantly fewer people. If anything, our retail banking business has been growing. Robert J. Bennett Chief executive, Onbancorp, Syracuse Banks in big cities have to streamline, and technology and competition will force them to do that. Banks will need fewer people per customer transaction on the retail side, simply by the sheer force of competition, technology, and people's habits. In our case, we will have fewer branches per household because the branch delivery system becomes less and less necessary. Customers are very literate about technology, particularly those coming out of high schools and colleges these days. But shrinking the retail staff by 50%? It's hard for me to believe that is realistic. When you look at the spectrum of the small-business banking relationship -loans, deposits, cash management, and various other things - you still have to sit down around the table and sort out how the rate relationship is going to work and what the facets are. For small-business banking, you are not going to need fewer people. If anything, you are going to need more for a while. Gene Galloway Executive vice president, Sanwa Bank California, Los Angeles I don't know whether the operative word is "reduce" or "reallocate" to other areas. Banks are going to have more people in centralized environments, like telephone servicing. Those left out in the field are going to be more pure salespeople. Does that mean they always have to be in the branch? Probably not. You will see more and more people working beyond the four walls of the branch. They will spend more time in the community actively selling, much like a real estate broker or an insurance agent. The bottom line: Will staffing go down? Probably. But 50%? That seems like a huge number to me. Roger Goldman Former executive VP, National Westminster Bancorp, New York

Only if they continue acting the way they have over the last decade, in which case they might as well close the doors now. Many banks have effectively adopted a "will-the-last-person-out-please-turn-out-the-lights" strategy.

But we have this enormously expanding pie of retail financial services, in which the average family spends $7,000 or $8,000 on financial services. The people who aggressively use marketing skills and distribution capabilities to capture that revenue will be adding staff, not shrinking staff. The people who don't use marketing and distribution capabilities to capture that revenue will continue to reduce staff, as they have been. Wayne Weidner Chief executive, National Penn Bank, Boyertown, Pa. Some of the larger banks that haven't addressed staffing issues and using electronics will have tremendous opportunity to cut back. There are banks that will be able to achieve that because they are overstaffed and very fat. But on an industry level, not every bank will need to. We have been working aggressively on our branch delivery network for the last five years and, for the last two years, extremely aggressively. We believed in and saw the changes taking place with electronics. So today 50% of our transactions are not completed within the branch. We believe that we have blended the full-time/part-time mix very well. We run a 50% part-time mix in our branch retail delivery system. We're also not growing our brick-and-mortar branches. We have moved to supermarket banking, and that automatically has enabled us to control our human resources overhead. We have addressed that issue on the payroll side by having flat base salary and letting the employee earn commissions.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.