Results of US Banks’ Branch Network Analytics; Telling Tales of Missing Logic

In this age of digitization and mobility, banks are facing a challenge in deciding the level to which they maintain a physical footprint (a.k.a. bank branches). In the US, as more people are depositing checks online, paying bills electronically, accessing cash through ATMs, and generally bypassing traditional teller-serviced experiences, there is a decreasing need for physical branches. But there are certain nuanced yet necessary considerations when it comes to deciding which branches to close and the mathematics behind it.

The LTP Data Analytics team analyzed the bank branch network footprint against several parameters. Bank branches in the U.S. were studied against two major factors viz. population and GDP, to understand the correlation. LTP is thankful to Factual, a location data company, for providing us bank branch data from their Global Places database in order to complete this analysis.. Although Factual data is typically available for commercial consideration, they graciously shared it with us (under NDA) for performing this analysis. It’s really great to collaborate with such companies, who believe in the ‘open innovation’ model just as we do, and conduct analyses that help our readers to stay informed and innovate.

This analysis was done from two different perspectives: firstly at an overall state level (using G ...

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