Application of GIS in banking sector.

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Presented By:-
Vishal Bhujbal (1303)
Sudarshan Kumar Patel (1320)

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Introduction
 In recent years, the banking industry has been undergoing drastic changes, refle
cting a number of underlying developments.
 Significant advancements in communication and information technology accel
erated and broadened the dissemination of financial information and financial
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

4. GIS role in various functional
areas of Banking
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 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

5. An Integrated Approach in Banking
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Expansion
Planning
System
Integrated GIS
Database
Fleet
Managem
ent
System
CRM
ATM
Cash
Distributi
on System
Market
Analysis
System
Banking
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 Focus
Customer 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 invest
ment 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

13. 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
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a) Time taking
b) Requires large amount of money
c) Still poses risk of using same plot for different bank for loan

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

17. 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
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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
different 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
extract data.

19. 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.
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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 dat
a 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

24.  Chase Manhattan Bank is the largest bank in
USA which is having more than 3 billion asset
s.
 It is most dominated leader in the consumer b
anking and performing its operation in urban
and sub-urban areas.
 With the help of ArcView GIS this bank has ev
aluated the branch performances and the opp
ortunities for extending branch network.
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25. Finding the Branch location - Process
 Divided the area according to the census tract b
oundaries and then they defined the trade area a
round the branch
 Identified their competitors in the nearby area an
d then formulated their strategy to choose a
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most feasible branch location.

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Developing a Map-Bank branch review

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Determining Trade Area-Review

28.  Use the existing customer database to locate
their existing customers in those seven censu
s tracts.
 Analysts found that 64% of their existing cust
omers live in those seven census tracts wher
eas 36% live outside that trade area but they
daily come in a daytime for their work
 Added demographic and financial data for fur
ther analysis of Chase customer base.
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Measurement of Market Potential

30.  After linking the financial data to the census tr
acts,
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following was done-
 Reviewed night time population of the trade a
rea and
found that 36,500 households are having $1.
5 billion in potential deposits
 The best census tract was 0126 which was h
aving more than $400 million in potential dep
osits. This tract was
having approx. 8000 households and Chase
Manhattan branch was already located at the
edge of this tract

31.  After reviewing daytime population, census tr
act 0116
was found significant with a population of 14,
000 workers
who where maintaining half billion dollar in th
eir potential
deposits.
 This is how, GIS played a vital role for measur
ing the
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market potential.

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Comparison of Day and Night Population
 Developed two different maps, one for the dayti
me
population and other for the nighttime populati
on.
 Identified the hospital locations on the map whi
ch were
the main cause of increased workforce in the d
aytime.
 After comparing the two different maps the anal
ysts
came to know that worker population is greatly
contributing
towards the potential deposits and then the ana

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Night time

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Day time

35.  Basically, the daytime population based on p
eople who worked at Ewing Memorial Hospital
and New York
Hospital and it was important for Chase Man
hattan bank to formulate its strategies to capt
ure that market.
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36. Identifying Potential Branch Lo
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cation

37.  The competitor branch of York Bank is at the
corner of
the most potential census tract (0116) with po
tential
deposits of more than $500 million deposits.
 In order to utilize this opportunity Chase Manh
attan had
two strategies,
1.To relocate the chase branch to the census tr
act of
Hospitals
2. To develop a new marketing plan that can i
ncrease the
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38.  This was the capability of Geographic Informa
tion
System (GIS) that highlighted this opportunity
for Chase
Manhattan Bank.
 By using the GIS applications banks can mak
e their
operations more efficient at low cost and at th
e same time
they can extend their branch networks at the m
ost feasible
locations
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39.  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 feasible si
te location for the installation of ATMs so that
they can provide cash withdrawal services at l
ow operating cost and within less time.
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40. THANK YOU
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