Relational versus transactional banking

Would the world be different if we had more relational versus transactional banking? Transactional banking would include trading and syndication as well as high volume retail banking based on credit scoring. Relational banking would be more closely aligned with the early 20th century "House of Morgan"-type of business. On a local level, relational banking would be practiced by a smaller bank that knows customers and is less willing to syndicate loans but rather hold the loans in portfolio because it has an information advantage at understanding the quality of the client.  

There is a dark side of relational banking. At the extreme, is relational banking just crony capitalism? It could be if the relationship is based on access to government favoritism. If the relationships of banking is not based on the ability to assess the character of the customer but to have access to regulators, there will be inefficiencies.  Still, if we had a less transactional banking there may be a reduced chance of excessive risk-taking, or at least the risk-taking could be clearer. The packaging of unknown risks may had been one of the biggest problems with the financial crisis. One could argue the other side by stating that bank runs occurred more frequently in the periods when there was more relational banking.

I am conflicted on the right answer but my general view is that more character focused lending based on direct private information on the borrower and less packaging of loans would be helpful for the economy.