Whether led by the financial institution’s management team or board of directors, understanding the catalyst for expansion and successfully navigating a branch expansion effort can be challenging. The first step is to evaluate your current business model according to the potential market needs.
What is a Catalyst for Expansion?
Strategic Growth
Financial Institutions who have seek to grow their footprint in a smart and effective manner look for emerging populations pockets or underserved market service areas. Credit Unions may seek a charter expansion or reclassification to expand their field of membership and create a reach beyond their original population segment.
The key to a successful strategic growth strategy lies in the data. Location Intelligence (LI) data incorporates geographic information, spatial data, and business data to uncover patterns and potential to drive better decision making. Carefully studying and understanding the data often supports or refutes the decision to expand. It can also identify other potential opportunities for expansion and market presence initiatives.
Added Convenience
Traffic counts in physical brick and mortar branches which are on the decline is another catalyst for expansion. Clients no longer find it convenient to make an extra stop to handle their banking needs. They do, however, utilize physical branches when it is in their already traveled path of transport or in high-traffic areas such as strip malls, supermarkets, or large businesses like university campuses, shopping centers, hospitals, and military bases. Utilizing an in-store branch model elevates the ‘one-stop’ shopping convenience for clients and wins their loyalty.
Competitive Advantage
Another catalyst for expansion is when the financial institutions has a large share of the market. They may opt to expand simply to retain their share while preventing another financial institution from gaining a foothold. This competitive move is highly strategic and may not always be the best move financially in the short term.
In conclusion, careful market research and a well thought out plan is essential regardless of the impotence to expand. If you are looking for a strategic partner to help your financial institution with its expansion or transformation needs, click here.
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