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Redefining ROI Across Your Branch Network
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by GINA BLEEDORN

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Highlights from the “Get Network Smarter” keynote at Future Branches outlining strategies for optimizing opportunities in the branch banking channel

In our fifth article in the branch optimization and ROI series, we looked at branch health assessment and other central measures for pinpointing needed spending to optimize a branch network. In our final installment, we are highlighting some of the key takeaways and most resonant themes from our Future Branches keynote. This article rounds out our series by focusing on real-world measures and case studies to illuminate central concepts in the optimization journey, arming decision-makers with the industry’s most powerful tools to help champion their cause for branch transformation across their own financial institutions.

Redefining ROI Across Your Branch Network

When it comes to highlighting the promise and potential of banking’s physical channel of experience, The Network Effect is a powerful motivator for facilitating change. While banks may be tempted to think that branch volume is relatively constant across all of their branches, The Network Effect serves as a myth-buster to that notion of stasis. Realistically, when a bank strategically deploys branches in key markets, more branches equals more market share per branch. That means a network of 5 branches will see more than double the amount of revenue when it increases its branch total to 10.

Redefining ROI Across Your Branch Network

To capitalize on this momentum, financial brands want to achieve “critical mass” or a certain percentage of branches required to fully realize the benefits of The Network Effect in any given market. What happens as a branch network increases its branch volume is that it eventually hits a threshold particular to each market, and when it meets this mark, The Network Effect is triggered, ensuring a greater return per branch.  At a time when it might be tempting to close branches, critical mass helps make the case for why more branches in a concentrated area will give you more market share per branch. 

Sometimes considered as an “efficiency boundary,” The Network Effect helps banks capitalize on movement and momentum in such a manner that all boats rise within their branch network. At the point when a branch has achieved critical mass in the market, one could make the case that this is the point at which mathematically, a financial brand is achieving perceived consumer ubiquity, meaning the bank is now considered convenient enough to meet all of consumer’s needs. The branch share threshold differs by market, but is typically pegged between 8-10 percent.

Redefining ROI Across Your Branch Network

The good news for financial brands is that not all of the branches in their network need to be the same size to achieve that critical mass. In other words, an ATM vestibule or a small-scale cashless branch can count as a branch presence to profit from on The Network Effect. That’s where right-sizing branches becomes a critical part of the optimization strategy. Deploying a strategic array of formats – in both size and scale – with a hub-and-spoke formula empowers financial brands to benefit from perceived presence and meet the need for consumer convenience.

Redefining ROI Across Your Branch Network

Finally, identifying market opportunity is at the heart of branch optimization success. To assess market demand, current and potential branch trade areas are identified as submarkets. Determining how much capacity is available in that submarket will inform decisions about how much to invest in each branch. Beyond identifying overall market opportunity, submarket analysis allows for an understanding of how much share to expect in relation to the bank. Is this an up-and-coming growth market or one that’s stabilizing or on the downturn? Submarket analysis will help determine that.

Redefining ROI Across Your Branch Network

Each submarket is defined by detailing particular attributes to determine a bank’s ‘fair share’ market opportunity. This submarket analysis enables financial brands to understand what type of share they can expect with their current branch network, and importantly, what ‘fair share’ a new branch could capture. Market growth is defined by the relationship between consumer and business demographics, economic indicators, customer personas, and household growth, among other factors. These considerations enable us to create a fulsome portrait of growth for the financial brand facing the future. 

As our “Get Network Smarter” keynote highlights, decision-making is a moving target based on shifting market dynamics and changing consumer demands. However, if key stakeholders understand the principles underpinning the process and the right questions to ask, they can more confidently approach scaling for success. To see all of our thinking on branch optimization and download our most recent white paper, visit the articles on the Future Branches section of our website. To speak with one of our banking experience experts, contact us at info@adrenalineagency.com.



Adrenaline is an experience design agency that creates and implements end-to-end branded experiences through creative and environmental design. We enhance our clients’ customer experiences across digital and physical channels, from their branding and advertising to design and technology in their spaces. After transforming an organization’s brand, Adrenaline extends it across all touchpoints — from employees to the market to in-store environments. And, we focus on serving industries that sell human experiences including financial, healthcare, sports and entertainment.


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