But the use of even these defensive investments has often yielded benefits for banks from greater fees and from lower costs resulting from reduced check processing. I would be remiss not to note the more-direct contributions of technology to increased productivity in banking, the same kind of improvements that have occurred throughout our economy.
Such gains are notoriously hard to measure in banking, but have visibly contributed to the improved profitability of banking. Not all such gains have been cost reducing: Some have increased cost, but have raised revenue even more by improving the variety and quality of banking services in ways for which customers are willing to pay.