Network Optimization Case Study

Situation

The management of a $1+billion community bank serving a ten-county region, wanted to understand the current and future value their branch network. Could branch network market growth and bank position be sustained in an intensely competitive environment? Management believed the retail customer base was older with limited growth potential and business market’s financial potential was not quantified. Should branches remain the face of the bank in the region or should branches be closed, relocated, consolidated or transformed and investment concentrated in non-branch channels?

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Analysis

To answer these questions, we conducted a detailed analysis of consumer and business markets (businesses up to $25 million in annual sales), integrated with bank’s data and customer files, and produced bank level and branch level measurement of current market position, performance, market shares, and profitability across a five-year horizon. Primary research was conducted to include the voice of the customer subjects: channel preferences, bank culture, expected product purchases, financial institution characteristics of importance, etc.

Analysis

To answer these questions, we conducted a detailed analysis of consumer and business markets (businesses up to $25 million in annual sales), integrated with bank’s data and customer files, and produced bank level and branch level measurement of current market position, performance, market shares, and profitability across a five-year horizon. Primary research was conducted to include the voice of the customer subjects: channel preferences, bank culture, expected product purchases, financial institution characteristics of importance, etc.

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Insights

Through our analysis, we:

  • Delivered detailed measurement of bank’s market position, growth, and profitability
  • Created a plan to implement per branch strategy, based upon organic growth and new customer acquisition strategy and targets
  • Identified key consumer and business segments, sub-market strategies
  • Created branch transformation (right-sizing, consolidations, etc) and channel technology(non-branch) strategies to support and attract younger, educated replacement customers.
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