The Data Aspect: How Location Intelligence Pays Dividends for Banks

MapInfo Pro™ Monthly Journal
The Data Aspect: How Location Intelligence Pays Dividends for Banks
User-added imageDr. Nishant Sinha, Senior Project Manager, Data Development, Pitney Bowes Software, Noida

The power of Location Intelligence (LI) for Banks

Banks are increasingly turning to technology to differentiate themselves from competitors as well as to expand their branch networks or rationalize inefficient networks. Geospatial data and its application play a major role in planning the growth and expansion of banks in this competitive environment. Early forays used GIS software to visualize branch locations in a given locale. The software helped streamline a fundamental planning process-that is, the location of branch sites. GIS software acted as a transformational gateway that broke the doors open for the adoption of Location Intelligence. 

New Dimension to Banking Data Analytics 

Utilizing MapInfo Professional with StreetPro data and geocoding (all offerings from the Pitney Bowes software portfolio) a wide variety of data analytics can be performed. These tools offer financial institutions the ability to transform previously non-spatially linked data for use in a geospatial environment for critical decision making. MapInfo Professional provides powerful query capabilities which can be used with bank customer data. To use the data in MapInfo Professional data with a location dimension is transformed to geospatial data with the aid of geocoding technology. 

In the natural course of a growing industry, the organizations in the banking sector have acquired a huge wealth of customer data, for example, Name, Age, Gender, Marital Status and other personal details. In addition geographic attributes are also gathered including Street Name, Postal Code, Locality, etc. and also financial details such as savings, monthly/daily transactions and so on. All these datasets contribute to describing the landscape that the bank is operating in. This data has become an extensive and valuable resource and knowingly or unknowingly this data can be an asset for decisions for such financial institutions.

Market and competitive analysis are obvious examples for how this data can be used to benefit the operations of a bank. Examples include competitive analysis, opening and closing of a branch or ATM, distance from competition, catchment influence of a branch with respect to competition, visualization of the bank network, transactions history, branch relocation, merger and acquisition evaluation and performance management of bank branches. Various data analytics along with thematic and heat maps generation can be carried out. MapInfo Professional together with geospatial data enables better decision making, highlights potential gaps, and assists stakeholders and decision makers with a simple platform to perform intelligence analytics.User-added image

To showcase examples of analysis the Delhi Area in India has been selected to present various scenarios related to the banking industry. All the banks and ATMs were geocoded using StreetPro Data. These scenarios were analyzed at postal code resolution. Examples considered include - 1) Within a particular postal code how many banks are available and how are ATMs distributed. 2) For a particular branch what is the estimated catchment area based upon drive time to that branch, this factor plays an important role in any decision making. 3) How is the customer data distributed in the area, this is achieved with help of Street Level geocoding to understand the aggregation of customers. 4) A correlation analysis which was carried out exploring the relationships to Points of Interest (POI) such as restaurants, cafes and shopping centers where the ATMs are placed, what are the areas where debit card transactions have occurred the most and with what POIs these are highly correlated. 5) Profiling streets based upon transactions to try and target likely customer prospects with same profile in these areas. 6) Profiling the consumer preferences by area such as the usage of credit cards, debit cards, ATM withdrawals, loans, etc.

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The maps above use StreetPro India and StreetPro Drivetime India ©TomTom BV. 

Thus the customer data becomes an important business tool supporting various analysis and decision making tasks in the organization. This data can help in evaluating the performance of the bank in various ways and can also help to compete effectively by better targeting products and services to customers based on their location. Business or marketing initiatives can be based upon the usage and requirements of the customers or potential customers in an area. The possibilities are not limited to the ideas discussed in this article and there may be many further dimensions depending on the available data and business requirements of the organization. 

Article by Dr. Nishant Sinha, Senior Project Manager, Data Dev, Noida

When not writing articles for the MapInfo Professional journal, Nishant enjoys finding new ways for solving geocoding issues and understanding the challenges of our customers to better apply geospatial techniques and to find solutions. He also writes poetry and loves cooking.

UPDATED:  July 12, 2017