Many banks have deployed information technology (IT) to serve customers more efficiency in diverse ways. In a competitive business environment, bank managers must simultaneously use multiple service channels to win customers and increase profit. Most prior research on IT investment in the banking industry has focused on the adoption of innovative IT-based service channels such as Internet banking, from customers’ perspective. In this research, we adopt the banks’ perspective to analyze the impact of IT on performance by simultaneously considering the traditional physical channel and alternative IT-based service channels. Our initial findings reveal contrasting strategic rationale supporting the use of ATM-based channel versus more recent Internet-based banking.