EVOLUTION OR EXTINCTION: WHERE ARE BANKS HEADED?

The banking industry represents an interesting and important case study of how changes in technology and regulation influence business strategy and organizational design. A narrow focus on traditional bank products and performance measures would lead one to conclude that banking is a declining industry. Such a focus, however, would miss most of the innovations in banking-most notably, the move to "off-balance-sheet" activities-that have been taking place in recent years. A broader perspective shows banks evolving in ways that are enabling them to provide the same basic functions as before, but in new, more efficient ways. 1996 Morgan Stanley.