How to Optimize Your Branch Network for Maximum Performance in Three Steps

If you're responsible for optimizing the branch network at a bank or other financial institution, you will benefit from the right tools to help you interpret your data. So why do you need to optimize your branch network in the first place? In a nutshell, so you don't get left behind.

Not only are customer perceptions of the usefulness of brick-and-mortar branches very different from what they once were, but the financial services sector is currently undergoing a period of unprecedented change, especially when it comes to retail banking. Analyzing data within the banking industry is crucial to optimize branch locations and understand customer preferences.

No surprise then that according to a report by Efma and Synechron, only 8% of banks and credit unions said they were happy with their current branch network and had no plans to change their branch/design model.

As a branch network strategist working in an omnichannel environment, you want to be part of the progressive 92%. You need to make sure your branches are reflecting the ever-changing needs of your customers. You probably know all too well that there's a growing tendency for customers to opt for internet/mobile banking and cashless transactions, but that there's also a frequently neglected segment of loyal customers who still prefer person-to-person banking in-branch.

However, having access to these customer preference trends is not enough. It would help if you had a tool that visually locates all of your branches and associated data. This is where a location software solution can help you draw better conclusions and refine your strategies. CleverMaps is here to help you do just that. 

For three helpful tips on how to optimize your branch network development goals, read on:

First: Prepare and Plan

Whether you'’re a bank, credit union, co-op, or building society, you'’ll need to lay the groundwork if you have a branch network. You must evaluate your current branch network based on the branch locations of both your branches and types, as well as the locations of your customers.

It makes sense to define what parameters should be taken into consideration. Examples might be the number of customers within a given radius of a branch, the home addresses of customers on file, or the frequency of branch visits. Banks need to adopt data-driven strategies for analyzing branch locations and customer behaviors to optimize their branch networks.

The data you have on each branch is usually obtained from internal (loyalty programs, CRM databases) and external (population statistics and demographics) sources. You'’ll also want to be aware of where your rivals are located. You can manage that by pinpointing the branches of your competitors in a geo-spatial context.

These preparatory foundations can be laid by taking advantage of location intelligence software. Mapping your branch/customer data makes it easier for you to assess the potential improvements that are required for each branch in greater detail.

Second: Maximize Your Data Analytics

Now you’ve prepared, you need to mine your data to uncover hidden insights. Financial institutions can leverage this data to enhance branch performance by understanding the potential catchment areas of individual branches and examining whether individual branches are really meeting their KPI customer targets.

For instance, an underperforming branch that is located within a catchment zone where many of your customers reside is probably due for an overhaul. It’s also a good idea to determine if your branches can improve their penetration of the market by comparing different ATMs/branches within your network to make sure you’re not overloading services in a particular area and succumbing to inner cannibalization.

Any potential overlaps between branches can also be plotted out by comparing different catchment areas, allowing you to view the values for each zone in transition.

Understanding customer demographics and travel patterns is crucial for financial institutions to strategically position branches and services, ultimately aiming to increase their market share amid growing competition.

The potential for cross-/up-selling of products and services across different locations can also be analyzed based on metrics such as propensity-to-purchase data, which can in turn boost customer lifetime value.

You can also map out the demographic data you have on those customers who have chosen to discontinue using your services (churn rates), which most likely means you need to increase the efficiency of your retention initiatives or revamp your marketing analysis efforts in those areas.

Third: Make an Informed Decision Using Location Intelligence

• Only with the right tools can you make the right decisions. The good news is that after preparing and evaluating all of your branch data with the help of mapping software, you’ll be equipped with key actionable insights.

  
  

• Having brought your branch network data to life using location intelligence, you can now create better strategies with regard to which branches to close or merge, which branches to restructure or redesign, and which locations offer the best potential for your prospective branches.

  
  

• Plus, you can also track the performance and progression of your branch network over time to make sure your goals are being reached so that you continue to make smart growth-driven decisions.

  
  

Get inspired by the success story of our customer, Generali Česká pojišťovna, and discover how they managed to reduce their branch network by 35% without sacrificing client access or profitability.

Ready to optimize your branch network for maximum performance? Let's schedule a call!