The Banking sector has been undergone drastic changes, reflecting a huge development in financial information and services due to the advancements in communication and information technology and has also increased it complexity. A bank’s primary function is to deliver financial services and products to the customers and the success of such an institution depends on its approach to data management and customer relation management. Aside from this, banking is a competitive business, market share and brad recognition alone aren’t enough to attract and retain customers credit. To be more effective, many banks, credit card companies, credit unions and other financial services organizations are turning to GIS to help them understand their data better than ever.
Everything in financial services is hyperlocal. Knowing where in banking is the key to understanding why and what. One of the most valuable and quickly-growing tools for decision making in modern industries is GIS technology. GIS provides banks with the necessary tools to achieve sustainable growth in its operations. GIS plays an important role in the banking industry by improving decision making and providing strategic planning support for alternative payment systems, mobile banking, and new services such as deposits with mobile phones or ATM’s.
Geographic information systems are technology systems simply programs that are designed to gather, store, analyze, and manage geographic data. This data can then be used for a variety of purposes within banking industries.
Market Share/Market Profiling
The portion of a market controlled by a bank’s services or products can be determine using GIS Platform by examining branch locations, competitor locations and demographic characteristics. This helps managers evaluate both primary and selective demand in the market, identify areas worthy of expansion, etc.
Branch Closure Evaluation
Assessing the attractiveness of the markets in which branches operate with the help of GIS can help a bank decide whether or not to reduce its presence in that market and assess the risks in doing so? GIS-based analysis of closure opportunities is especially helpful when it comes to predicting customer loss (churn) result should a given branch be closed. GIS gives bank opportunities to retain customers through transfer of business to nearby branches which are close to the customer’s address. Examining the spatial distribution/structure of branch closure is crucial to our understanding of financial inclusion and the potential impact of a branch closure.
The question where ATMs should be located is a prime issue to both customers and banks, GIS assist in answering this question about location by providing a means of determining optimal locations for the machines. GIS provides address system, database management system, network analysis and query tools to understand location of costumers, facilities, and competitors used for filling in the market and service gap. For replenishment and management of ATMs, GIS-based real-time solution displays the ATMs on the map along with the cash status to help in better visualization and better optimization in the cash distribution cycle.
Cash requirement for each day for a Bank/ATM can be predicted with the help of the history of cash transactions over a certain period during previous years and also with the help of Demographic data such as population density, Socio economic information, etc.
Property Evaluation and Real Estate Banking
One of the most important functions the banking sector provides to its clients is loan services. Because there is a lot of competition within the banking sector for loans, bank and individual companies need to be able to analyze important pieces of data such as property location, plot size, location, land/ property valuation and more. Currently, many companies collect this data manually but all of this data can be gathered more efficiently and accurately using GIS software. Rather than taking 30 days to evaluate a loan application, the bank could use GIS technology to gather and analyze the data and then make a decision in a much faster, more streamlined process. By reducing the evaluation time, the bank can increase its profits and put their man power to better use.
World Bank economic statistics
Slicing and dicing raw financial data from the World Bank. With location data attached to a financial records, GIS provides a strong and effective database management system to store and analysis(query) global data to examine it from different points of view, especially location to better understand the data.
Merger and Acquisitions Evaluation
As M&A is one of the major aspects of the corporate finance world, this is defined as the consolidation of companies. Mergers are the combination of two companies to form one. While acquisition is one company taken over by the other. Using GIS, banks can easily engage in profiling and finding opportunities to gain and build where customers are with market profiling. By analyzing the location pattern of branches of a bank, it can determine the overall geographic fit in relation to its own banking network. GIS helps to quantify the degree at which a bank branch is nearly immediately adjacent to its own or sufficiently removed from them yet serving markets that are similar or otherwise sufficiently attractive. Also, all merger review processes have a key geographic element in it, banks can use GIS to perform self-assessment to allow them to know the merger potentials.
Resource Allocation/ Site Selection
GIS help in identifying resource under-served areas by analyzing markets correctly, the bank can better anticipate expected business volumes and the need for more staff before the branch becomes too busy. It is known that finding a site that’s likely to be profitable can take more than simple local intelligence. GIS provides a powerful geo -statistical analysis and location management tool, for analysis of comprehensive data such as the interaction between demographic census and household purchasing behavior and spatial criteria for site decision making. GIS techniques with census data will help banks understand what characteristic of people buy their products and service and how to better approach these consumers
Focused Marketing and Campaigns
GIS-based solutions can provide specific information on products/campaigns and the areas they are well received. Therefore, allowing specific advertising or rendering of service to take place thus reducing large advertising bills and scoring of campaigns. Banks can now advertise in region media-specific products, rather than major national media campaigns. Schemes introduction and advertising those schemes can be targeted to be more appropriate. GIS can help in identifying those target groups’ spatial distribution.
Community Investment Act
Fulfilling the obligations to loan in areas with particular attention to low- and moderate-income households – using GIS to understand spatial demographic
GIS can be used for Capturing locations where existing mobile transaction occurs and assisting in mobile security infrastructure