When banks, particularly in emerging markets, decide to reorganize their branch network, it can be a titanic challenge. Here are 5 key questions banks should be asking themselves, along with how GIS can help.
1. What is the market coverage of our branch and ATM network relative to our key competitors?
Happiness is relative and bigger is not always better. Using GIS, banks can overlay spatial coverage with competitor coverage to determine the optimal network size for any given city. This can mean maximizing deposit and customer acquisition with just the right investment into physical channels. Most banks will use GIS along with an integrated mapping tool to accomplish this. Read our article on “5 mapping tools” to learn more about what’s available.
2. Are our sales staff targeting the right areas with the right products?
Using both in-house and out-sourced data, GIS can be integrated with customized market potential grids. This allows HR and operations to overlay resource allocation and visualize misalignment as well as pilot test products in the right regions.
3. Is competition the reason this branch is performing poorly?
GIS can help answer this question with an assessment of competition density around branches with good performance, which can help reveal if the surrounding competition is a probable factor behind bad performance.
4. What is the level of Cannibalization in my branch network?
Not between humans, but between your own branches – multiple branches in a small region eating away at the same pool of deposits can mean big problems for banks. In cities like Taipei with over-saturated branch networks it’s not uncommon to see over 15 branches in a 1 km2 grid with one bank having branches across the street, making determining a probable cause tricky. A GIS system can help assess the level of cannibalization and help make some decisions on what to do about it.
5. What are the micro-location characteristics of a site?
GIS can help banks combine a city scale analysis with a site assessment using surveys and weighted scorecards to determine site characteristics that correlate to good performance of branches and ATMs. It also becomes part of a process for banks to quickly expand and prioritize between sites once there’s a quantitative score that can be ranked for comparison.
These are just 5 questions that GIS can help banks answer, but in reality a good GIS system can help banks answer a slew of tough questions they face each and every year of business. If you’re looking to familiarize yourself with GIS and related topics, our GIS article archive is a good place to start.
You might also want to read our article on the “Top 5 ways to use GIS in retail and Banking” to learn more about how banks are using GIS systems in their business processes.