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ARTICLES
BANKING IN A SPATIAL WORLD - The GIS Approach to
Banking
(By: Sibe Robinson Tombari, MIEEE, MSSPI)
Looking at the Post Consolidation landscape, the
distinguishing factor amongst banks will be basically the quality of
service they offer. With the intense competition and the ever
growing customer sophistication, banks will have no choice but to
improve the quality of services rendered. In recent years,
significant advancement in communication and information technology
has accelerated and broadened the dissemination of financial
information and services and also increased complexity. Banks have
also continued in their aggressive marketing, although with a large
portion of the market terrain yet uncovered. Indeed, the challenge
is enormous.
Banking globally is data driven. However, in Nigeria,
Geographical Information has not been properly integrated into our
Banking software. This is where Geographical Information System
becomes very useful. GIS customized to corporate requirements, holds
immense potential for the productivity of any organization. The GIS
technology has evolved into a formidable tool by which corporate
world can use spatial information to manage their businesses. GIS
also allow the users to spatially visualize data thus revealing
hidden relationships, patterns and trends.
It offers a platform for developing a
customer-centric business model and an integrated environment to
help banks in decision making, strategic planning, effective
resource management and operations management. This will obviously
boost customer satisfaction, stimulate business growth and engender
customer base expansion.
WHAT IS GIS?
GIS can be defined as an organized collection of
computer hardware, software, geographic data, and personnel designed
to efficiently capture, store, update, manipulate, analyze and
display all forms of geographically referenced information. It
combines relational database with spatial integration and outputs
often in form of maps.
With a good knowledge of what GIS is, lets then
explore the applications in banking.
GIS APPLICATIONS
(1) Customer Analysis:
(a) Location Analysis:
In Nigeria, one thing that is constant with customer addresses is
that it keeps changing. This makes it quite difficult to manage
customer addresses. Using an integrated GIS model, this problem can
be tackled quite easily. Customers location will be geocoded so that
it can be spatially referenced and dynamically updated, thus
locating a customer even after series of address change will be
easy. This will obviously be an invaluable tool for our account
officers and it will also help the bank implement the KYC-rule.
(b) Customer Profiling:
Several parameters can be integrated into GIS that can do customer
profiling. For example, customer information can be integrated with
demographic information and spatial and geographic components, thus
making it possible to map and extract patterns. Queries can be
generated that will extract customers profile based on the desired
pattern.
(c) Analysis of Loan Defaulters:
In a country like ours where loan default is a very common thing, a
great deal of analysis needs to be done before creating risk assets.
An integrated GIS model can be a great tool in carrying out such
analysis. For example, the Geographic and socio-economic
characteristics of loan defaulters in a particular spatially
referenced location in comparison with other non defaulters can be
used to evolve a model that will aid the risk asset management team
in making decisions. Queries can be generated that will extract
salient geographical attributes of loan defaulters. Such information
can help you decide whether or not to grant such loan.
(2) Marketing
The role of GIS in modern marketing cannot be
overemphasized. Marketing is just a question of demand (customers)
and supply (financial products and services). Demand and supply can
be quite easily tied to geographical location, thus making GIS a
very important tool in market analysis. GIS can provide focused
marketing since it uses a feedback mechanism that will help you
analyze customer response and acceptance pattern. This can help you
decide on which product best suits a particular area.
While conventional database can only answer
statistical questions like how many potential customers is in a
particular area and which area has the highest growth, GIS
application can relate all these information geographically for
visualization.
(3) New Branch/ ATM/Cash Centre Siting
Branch expansion planning needs modeling spatially
relevant data and offering fast and cost effective site analysis to
effectively select a new site. With GIS, you can choose suitable
site for new branch/ATM/Cash Centre by using a combination of
population density, land/building availability, costs availability
of infrastructure, crime rate and many more factors. With GIS, these
parameters can readily be integrated. Also, its ability to display
these features pictorially on the map can aid analysts in deciding
if a site meets the specified criteria. The demographic content of
GIS can also aid in making decisions such as the maximum number of
branch a region can support.
(4) Decision Support for Strategic Planning
A lot of parameters are involved while making
strategic planning decisions in banks. An integrated GIS solution
can be used to evaluate ＾what if￣ scenarios by using
interrelationships between land use factors, infrastructure
capacities and economic growth etc. This will no doubt be very
useful to management as it offers a good platform for major
decisions to be thoroughly evaluated before it is executed.
(5) Competitor Analysis
GIS can be very useful in competitor analysis. It can
be used to generate queries that answer questions such as competitor
location, growth rate and performance. The results of these queries
can be displayed pictorially and can be used to analyze critical
success factors of our competitors and also identify areas where
they have failed.
(6) Online Tracking of Cash Status
While installing an ATM could be a great challenge,
monitoring and replenishing cash level according to demand could be
more challenging. GIS can be used to solve this problem. GIS based
real time applications for replenishment and management of ATMs
offers an effective approach to cash management cycle. A GIS based
ATM Management Solution can be used to display ATMs on the map along
with the cash status. It can be used to reliably extrapolate future
cash requirements based on interpolations of historical Cash
requirements.
(7) Bullion Van Fleet Management
Managing bullion vans can be very tasking and
challenging, especially in big cities. GPS and GIS based fleet
management applications offers the possibility of monitoring cash
movement. GIS can also be used in making critical path analysis for
the vans. This could be very useful in traffic infested territories
like ours.
Conclusion
With the ever increasing customer sophistication,
banks have no choice but to evolve customer-centric products and
services. GIS happens to be one such products. As we have seen
earlier, GIS can be of immense contribution to customer base
expansion, increase in profitability, consistent business growth and
improvement in quality of services. No
doubt, GIS holds a lot for the banking industry.
#4 Nzimiro Street, Amadi Flats, Old G.R.A. Port Harcourt,
Nigeria.
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