Branch Network Expansion: Rural India

 

The Client

The Bank is a prominent nationalized Bank, founded in 1906 and having today 4500+ branches in India and abroad. The Bank intended to reach the next level of sustainable, profitable growth through applying substantial micro-market Data and identify its opportunities, formulating the right branch opening strategy for optimal overall growth vis-à-vis the competition – especially in Rural India.

 

 

Challenge

Rural India is today yet a very challenging territory in terms of assessing local market potentials and forecasting viability of new branch locations. Set against mandatory RBI guidelines of quotas of new branches in Rural India to fulfil (especially under Financial Inclusion aspects in un-banked Rural territory), many Banks find it very challenging to estimate local market potentials on district-, taluka-, down to individual village – level.

 

The need is for scientific reliable market data, supporting to identify the various different potentials across villages in the total sub-continent for (a) supporting the selection of new branch locations and (b) verification of proposed branch locations through respective Zonal Managements.

 

 

Solution

Opportunities for entering and expanding into markets often do not come around twice. For the expansion of a Bank Branch Network, it is vital to pay attention to regional factors down to micro-market profiles. Customers, prospects, new target group segments, competitor locations and their impact, purchasing power and consumer confidence are never distributed equally throughout a given market.

 

The MMS.IND Market Intelligence Platform India is built for Rural India down to the individual village level, providing information on population figures, income levels, amount of savings, expenditures against various categories, lifestyle affinities etc. Further ‘mapped’ to each village the total India Bank branch locations – for all banks.

 

Together with the MMS.IND Branch catchment area analytics tool, any village can be selected and a catchment area of any size processed to retrieve an overview on respective population / households in the selected catchment area by income- and lifestyle affinity grouping (screens 4, 5 and 6).

 

From this market data platform, easy to use in a mapping system, the Bank identified high potential villages as per income & lifestyle levels of residing population, paired with low competitor pressure based on high distances to other Bank branches.

 

The mapping system together with the MMS.IND market data allows querying the data and retrieving pre-selections, for example “Display in particular sub-district ‘x’, villages having only a RRB Bank branch + being below 10.000 total population + with minimum Rs 15,000 average monthly household income + no other Bank branch in distance of 5km”

 

 

Results

The Bank utilized the MMS.IND data and systems tool in its headquarter for verification purposes of the Zonal Management proposals for new branches as well as Zonal Managements received access to the mapping system and could use it them selves for pre-selecting and suggesting new branch locations. Certain branches, which were placed for example in under-banked villages in the district Bilaspur, State Chhattisgarh, have turned viable only after 11 months.