James wrote something here that nicely summarizes the opportunity at a high level that exists for banks to evolve their current delivery distribution to better reflect the evolving consumer. He refers to the increasing sophistication that consumers exhibit, and I thought I would take a crack at helping out with that.
Benjamin Ensor at Forrester came out with this piece in January 2006. The premise is that Internet is driving changes in consumers behaviour, and it goes on to back this up with their Technographic quantitative research.
EXECUTIVE SUMMARY Length: 27 pages
Consumers’ financial behavior is changing fast as a result of new channels like the Internet. As consumers’ choices have widened, their behavior has become more diverse, increasing complexity for financial services firms.
Financial firms need an attitude-based segmentation to understand the resulting changes in consumers’ needs, preferences, channel behavior, and choices of provider.
Source: Forrester: Interactive Marketing All Forrester Research
The article makes the points that consumers media consumption is fragmenting, and that consumers are using more varied sources of information when researching financial decisions.
These changes are facilitated by internet, and I would argue that advice of friends and family, could be added to the web advice noted in this chart.
Key research points are:
- Many consumers don’t just research financial products online, they apply for them online, too
- Consumers use multiple channels for their banking
- stream of new service technologies — including IVR, VoIP, chat, co-browsing, online account access, natural-language search, secure messaging, email, and SMS messaging — have opened up ….
The next point that supports these shifts is trust. Consumers trust in financial services firms is dropping. This reduced trust is preyed on by new entrants, such as ETRADE, and ELOAN. I would add Prosper, Zopa, Paypal, and Google (checkout) to that list. Refer my posts, James, and Brian.
The research then goes on in detail to describe consumer segments, and their behaviours.
Bankwatch 
Colin
One of the things that has been on my mind ever since the Open Source thing is, as social networks start to get stronger, and people within these groups start trusting each other, will we start seeing them invest and loan out money to people within these groups? These could be imprompu networks that start small and perhaps grow by word of mouth and mouse?
Do you see these things coming? And how soon?
Could we get a bunch of people together and start out an intitative like this our of Bankwatch?
The currency amongst our little group right now comprises ideas, and information. The motivation to invest and make money is interesting, but it might require a different motivation.