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Online banking is growing 27 percent yearly, which is faster than other retail banking channels, according to TowerGroups's "Delivery Channel Volumes in the United States, 2006-2010: From 'In Line' to Online" report.

The report looked at banking activities such as deposits, withdrawals and balance inquires at bank branches, ATMs, online banking sites and call centers.

The amount of transactions customers make at ATMs and bank branches will level off, making online banking the driver of retail banking transaction growth.

Jerry Silva of TowerGroup said, "Customer preferences are evolving from waiting in line for the teller, to going online for more and more of their needs."

"The call center is also becoming extremely popular in light of the penetration of mobile phone use in the US.

"However, unless banks improve the technological capabilities and complexity of their call centers, much of this channel's growth will not convert into business opportunity for institutions."