Optimal Deployment of Distribution Resources

Despite online and telephone banking being available to consumers for more than 25 years, consumers still favour financial services providers that offer a full array of channels importantly including branches and mobile sales forces.  Since distribution is the most expensive way to distribute financial services, it is essential that resources be deployed optimally. Key issues include:

  • The number and role of physical branches
  • The deployment of specialist personal sales forces – mobile mortgage specialists and financial planners.
  • Local market operating strategies including branch location, on site resources, hours of service, language services, service area marketing, community engagement and more.
  • Renovations, relocations, consolidations and closures.

We can help banks and credit unions work through these issues:

  • What are the most attractive markets for financial services?  We have profiled each of the 330 Federal Elections districts across the country for financial services potential.  For example, consider the Aurora – Oak Ridges – Richmond Hill market near Toronto, Ontario:
  • Residents in this district have 25% more investment income (wealth management resources) and 80% more real estate value (mobile mortgage specialists) than the national average.  Average income per taxpayer is 35% higher than the national average.
    • There is a younger bias to the population (suggesting a full array of borrowing and savings needs)
    • Those with a mother tongue other than English is 133% higher than the national average suggesting Chinese and India local strategies.
    • And the personal financial services market is almost $20B.
  • How well are your branches performing in their local markets?  We are able to calculate market share down to the branch level with rollups to the District, Area, Federal Election Districts.  This is useful for performance management, business planning and distribution planning purposes.  For Example:
  • This is a sample using actual market size and sample sum of branches data.
    • The financial institution has a 3.94% share of the local market.  This is much lower than their share of the Ontario market (6.6%) suggesting room for additional distribution.
    • Deposit share is higher than loan share suggesting more mobile mortgage specialists may be warranted.
    • Mutual fund share is much lower suggesting more wealth management growth resources.
    • Share growth is very strong suggesting existing locations are well placed and management is performing well.
  • How to bias resources to optimize growth potential? Once you know your branch share and growth dynamics, you are able to make proactive decisions about deploying your resources.  For example:
    • High Market Share, High Market Share Growth branches:
      • Strategy:  Protect and Grow
        • Highest physical premises standards
        • Highest customer service standards
        • Highest quality sales and service personnel
        • Specialist sales force with both internal (servicing) and external (acquisition) focus.
        • Local advertising, promotion, public relations and community engagement.
    • High Market Share, Low Share Growth branches:
      • Strategy:  Protect
        • Highest physical premises standards
        • Highest customer service standards
        • High quality service personnel
        • Specialist sales forces with internal servicing / share of wallet focus.
        • Public relations and community engagement initiatives
    • Lower Market Share, High Share Growth branches.
      • Strategy:  Grow
        • Consider branch consolidation to improve branch share
        • Differentiated operating strategies – eg:  hours of service
        • External acquisition sales forces
        • Local advertising, promotion and public relations.
    • Low Market Share, Low Growth branches.
      • Strategy:  Maintain or close.
        • Look for closure / consolidation / relocation (if market is attractive) opportunities.

Proactive management of resources can pay huge dividends for market share growth and profitability.  We would be delighted to work with your teams to implement your market-customized distribution strategies.