Selecting a new branch location is one of the most important decisions a financial institution can possibly take. Hiring a site selection expert is paramount as a first step, as companies such as our partner Accubranch bring a wealth of experience and industry know-how to the table. Branch network optimization is a major undertaking, and should be entrusted to those who do it for a living.
Most banks and credit unions are aware of the “hub and spoke” concept of branch networks, but many aren’t familiar enough with the nature of the hub-spoke relationship to begin to implement it. Accubranch and Solidus work as an integrated team in this regard, with Accubranch performing the important research that pinpoints the most productive locations for new branches, and Solidus designing and building the branches to highly customized specifications.
Site selection research entails much more than simply applying geographic software to specific locales. Analyzing data is certainly part of it, but siting a new branch requires an eclectic skill-set. Everything from population density, market size, demographics, and branch type must be factored into a site assessment. These parameters can change over time, which is another reason why seasoned professionals should be consulted before any concrete decision is made. As the branch role changes, market demands change with it, so what may have been good practice once may not be today. Population density and market size determine the optimal number of nodes in a hub and spoke network. Demographics such as average age and income can influence branch type (i.e. younger, better-educated markets will adopt the use of ITM’s or video teller machines, while older demographics will prefer face-to-face interaction with people even for basic transactions).
We decided to create an infographic showing the fundamentals of the branch location process. As you will see, research is only one third of the total. Transactions and permitting are themselves a huge part of the work involved. A fully integrated branch location selection professional will be experienced in all these areas, and can do the type of heavy lifting that financial institutions lack the skills to do. If you have questions about Accubranch’s approach or would like a consultation, please contact Accubranch President Mike Goman at 860-841-3271 or email him here for more information. Please share our infographic, as the science of branch location is not well known in financial circles.