Banks Shouldn't Try to Herd Customers to Web Channels.

If you have been to any Internet seminar or have read books or magazines on electronic commerce, you probably have seen "The Cost Chart." This simple bar chart illustrates a powerful message: "Use e-commerce to move a customer from a higher- to a lower-cost channel and save a bundle of money."

Some of us working in the banking industry have a feeling of deja vu as we look at the Web as a cost-reduction strategy. Is moving expensive branch transactions to the Internet the same as what banks expected from automated teller machines and call centers? Absolutely.

History has shown us that customers are not cattle that can be "corralled" into a more cost-effective …