The United States is not the only country facing revolutionary changes in retail banking markets over the next 10 years, but the U.S. experience could point the way for banks in other countries, a Coopers & Lybrand study has concluded.

The report, released last week by the Economist Intelligence Unit of London and New York, was based on interviews with more than 50 high-ranking retail bankers. It predicted retail markets worldwide will be affected by rapid changes in demographics, employment patterns, and computer technology.

It ranked Chase Manhattan Corp., Citicorp, and First Chicago NBD Corp. among those that have gone furthest in building the necessary customer data bases, adopting a sales orientation, and implementing electronic delivery systems.

But the report also said the industry's adjustments and preparations have generally been uneven worldwide.

"Canadian banks are keeping pace and in some areas even holding a lead," but only a handful elsewhere are well positioned to survive a shakeout, the report said. These include Germany's Deutsche Bank and ING Group of the Netherlands.

"To achieve success - in many cases, to survive - banks will need to begin managing a rapid transition," the report warned.

It said improved data bases, combining market segmentation approaches with the ability to provide customized financial advisory services electronically, would be keys to succeeding in the next century.

With an aging population bringing increases in retirement-investment portfolios, plus the rise in small businesses and dual-income, working families with little time to visit branches, versatile banking strategies built around sophisticated electronic services are needed.

"As home-based offices, telecommuting, and flexible hours increase, customers are shrugging off the 'right time, right place' constraints in favor of the 'anytime, anywhere, anyhow' philosophy," the Coopers & Lybrand report said.

Banks that do not adapt to the changing needs of their customers risk being overtaken by new competititon.

"Other, nonbank competitors represent a growing threat and include the likes of technology companies such as Microsoft," the report said. "These have emerged as highly innovative organizations capable of conceiving new opportunities and possible banking channels."

"Providers of new interactive channels," it went on, "are becoming competitors, not just conduits, though some banks contend that their access to a wealth of customer data still gives them an edge."

The report also warned that change will be chaotic and will entail reductions in retail banking staffs of up to 50%. But there is no single blueprint for all banks.

"Each bank will need to perform its own analysis of the most critical issues and move accordingly," the report stated. "But move they must."

The report's sense of urgency and emphasis on retooling distribution systems echo previously published consulting studies. Among them were First Manhattan Consulting Group's "Retail Delivery Systems" report of 1994 with the Bank Administration Institute in the U.S., and a Deloitte Touche Tohmatsu global study last year that similarly estimated a 50% decline in retail bank employment.

Reacting to the latest conclusions, analysts and bankers acknowledged the need for change but questioned how fast customers will demand electronic services.

"Electronic payments, such as smart cards, will certainly displace cash, but cash is still competitive with electronic payments for small purchases and will be around for a long time to come," said Andre Cappon, president of the CMB Group, a New York-based banking consultant.

"It will probably be more of an evolution than a revolution," said Ted Francavilla, managing director for strategic planning and financial management at Chase Manhattan Corp.

Chase was praised in the report for reducing reliance on brick-and- mortar branches and stressing high-level financial planning. It tries to "offer user-friendly and convenient choices to a broad range of customers and avoid making one huge bet on any one type of customer," Mr. Francavilla said.

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