Gis in banking (1) final

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Presented By:-

Vishal Bhujbal (1303)

Sudarshan Kumar Patel (1320)

GIS in Rural Banking

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Introduction

In recent years, the banking industry has been undergoing drastic changes, re-

flecting a number of underlying developments.

Significant advancements in communication and information technology ac-

celerated and broadened the dissemination of financial information and finan-

cial services and also increased the complexity.

Another key impetus for change has been the increasing competition among a

broad range of domestic and foreign institutions in providing banking and

related financial services.

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How GIS can benefit banks

GIS plays an important role in various functional areas of banking in

achieving the various business objectives of banks such as:

Expansion of Customer base

Improvement in Quality of the Services

Increased Customer Satisfaction

Consistent Business Growth

Increase in Profitability

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GIS role in various functional areas of Banking

Market analysis

Customer management, identification

Competitor analysis

Focused marketing

Site selection for new branches / ATMs etc

Strategic planning

Asset management

Retail banking

Web based solutions

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An Integrated Approach in Banking

Integrated GIS Database

Expansion Planning System

Fleet Managem

ent System

CRM

ATM Cash

Distribution System

Banking System

Market Analysis System

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Data Required

Census Data

Age

Sex

Income

Non Census Data

Expending Pattern

Expenditure Information

Credit History

Digitization of Map

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Banking Industry FocusCustomer Analysis Sales & Marketing

GIS analysis shows customer proximity to branches

and which branch they visit, indicating a difference

in perceived and actual distance. 

Geographic analysis of ATM usage creates the

visualization showing high and low areas of usage

based on foot traffic and densities. 

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Cont’d.

Mitigation & Governance Commercial Lending

Visualizing a population makes it easier to identify

areas of risk and assess the impact on your business.

Demographic data of the potential for auto loans per

household clearly shows where to target a marketing

campaign.

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Cont’d.

Business Country Planning Service Location & Site Evaluation

Maps of buildings and facilities help you plan for the

unexpected.

Optimize your next site location using GIS tools and

current data for the most accurate analysis

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Cont…

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Cont……

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Banking GIS- A New Approach in Bangladesh

This is a big factor for any banks to reduce their in-vestment time. If they can save 30 days they can have a profit of 30-40 lacs (US$42857.14-US$57142.85) per year.

Article Source: http://EzineArticles.com/332573

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1. Decision regarding sanction of loan- spatial analysis of the plot:

Manual analysis of the property or plot for parameters (distance from main

road, size of plot actual owner verification etc )by going to the site or

contact with third party. Its

a) Time taking

b) Requires large amount of money

c) Still poses risk of using same plot for different bank for loan

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But if they have a GIS database, they could do the followings easily:

Do the spatial analysis easily with just one click on the computer.

Calculate the area or distance from main road without going to the site/plot.

Calculate the land value of the area by analysing the surrounding area.

Creating a central database system to prevent the double loan takers utilize

same plots.

Can reduce the investment time by 30 days.

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2. Decision regarding establishment of ATM booth:

To provide an ATM machine to an area, Bank has to think different spatial

issues like concentration of commercial land use, concentration of

debit /credit card holders of an area, route for taking money to the ATM

booth etc. These all can be done easily with a GIS tool.

Decision derived from the map regarding ATM booth:

Area an ATM serves.

Factors to establish an ATM.

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3. Location of the loan takers:

Bank is now spending a lot of money to locate the account holders or loan

takers. They are communicating with their client at regular interval to

locate them. This job can be made very easy with GIS as here a loan taker

or client can be easily identified in the map. But for this, the database has

to be regular updated as this is presently done.

Present address of the loan takers.

Change address.

Distance from the branch and route to the address.

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4. Best route of the van to deliver money to the ATM booth/branches.

A bank has to analyse thoroughly to select the delivery route of the van to

take money to the ATM booths.

They have to think about the security. In GIS, they can do this with creating

simple network topology of the existing road and select the best routes to

take money.

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5. Decision regarding establishment of new branches:

As banking sector is a fast growing field in Bangladesh, many new banks and

branches of existing banks are establishing now. They have to take into account dif-

ferent spatial issues to establish a new bank or branch.

For example, they have to do the followings things:

Have a general idea of the area like land value, socio-economic condition etc.

Locate the commercial land use of the area.

Locate the bazaar or market area.

Locate the residential area and business area.

Locate the existing road network.

All these things can be easily done with a GIS tool by analysing and querying to ex-

tract data.

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6. Decision regarding selection of new investment sites for Banks or clients:

Banks can also take decisions to locate or identify new potential sites for new

investments through GIS. They can analyse an area with potentiality for

economic growth, existing pattern of development and come to a decision

whether they invest in that area.

With the GIS database, a bank can do the following:

Regional analysis to identify profitable location to invest.

Identify different attraction points of the area.

Identify the present land use and industry of an area.

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Advantages the Bank can get:

Improve the customer services dynamically.

Considerable Reduction of the maintenance and processing cost of the Bank.

Select the best location to establish a new bank or branches.

Choose the best route for money delivery van.

Secure the loan process by maintaining the data in central database and share

it by online data management process.

Reduce the head count.

Database maintenance is very easy and cost is very low.

Banks can save their investment related inquiry by one months.

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Conclusion

In conclusion, it can be said that banks can have lot of advantages by

introducing GIS in their daily activities.

It can save money, time and manpower which are the target of any business

organizations.

It is very important to manage the data as there will be a vast amount of

data they have to handle.

But by establishing a cell or by giving third party the duties to manage and

share data, the procedure can be a very profitable for banks or other

business organizations.

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THANK YOU

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Case Study: Chase Manhattan Bank

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Chase Manhattan Bank is the largest bank in USA which is having more than 3 billion assets.

It is most dominated leader in the con-sumer banking and performing its opera-tion in urban and sub-urban areas.

With the help of ArcView GIS this bank has evaluated the branch performances and the opportunities for extending branch network.

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Finding the Branch location - Process

Divided the area according to the census tract boundaries and then they defined the trade area around the branch

Identified their competitors in the nearby area and then formulated their strategy to choose a

most feasible branch location.

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Developing a Map-Bank branch review

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Determining Trade Area-Review

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Use the existing customer database to lo-cate their existing customers in those seven census tracts.

Analysts found that 64% of their existing customers live in those seven census tracts whereas 36% live outside that trade area but they daily come in a daytime for their work

Added demographic and financial data for further analysis of Chase customer base.

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Measurement of Market Potential

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After linking the financial data to the cen-sus tracts,

following was done- Reviewed night time population of the

trade area and found that 36,500 households are having

$1.5 billion in potential deposits The best census tract was 0126 which was

having more than $400 million in potential deposits. This tract was

having approx. 8000 households and Chase Manhattan branch was already lo-cated at the edge of this tract

(0126).

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After reviewing daytime population, cen-sus tract 0116

was found significant with a population of 14,000 workers

who where maintaining half billion dollar in their potential

deposits.

This is how, GIS played a vital role for measuring the

market potential.

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Comparison of Day and Night Population

Developed two different maps, one for the daytime

population and other for the nighttime popu-lation.

Identified the hospital locations on the map which were

the main cause of increased workforce in the daytime.

After comparing the two different maps the analysts

came to know that worker population is greatly contributing

towards the potential deposits and then the analysts

reviewed the locations of their competitors targeting those

hospitals.

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Night time

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Day time

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Basically, the daytime population based on people who worked at Ewing Memorial Hospital and New York

Hospital and it was important for Chase Manhattan bank to formulate its strategies to capture that market.

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Identifying Potential Branch Location

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The competitor branch of York Bank is at the corner of

the most potential census tract (0116) with potential

deposits of more than $500 million de-posits.

In order to utilize this opportunity Chase Manhattan had

two strategies, 1.To relocate the chase branch to the census

tract of Hospitals 2. To develop a new marketing plan that

can increase the Chase relationship with the Hospitals.

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This was the capability of Geographic In-formation

System (GIS) that highlighted this oppor-tunity for Chase

Manhattan Bank.

By using the GIS applications banks can make their

operations more efficient at low cost and at the same time

they can extend their branch networks at the most feasible

locations

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Reduce bad debts by properly identifying the locations

where most of the default cases are found.

Banks can also use GIS to locate the areas of high

competition which helps them in making their own

strategies to compete in those areas. Use GIS applications to identify the feasi-

ble site location for the installation of ATMs so that they can provide cash withdrawal services at low operating cost and within less time.

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THANK YOU