A Modern Playbook: Leveraging Big Data for Decision Making in Financial Institution Growth and Branch Design and Construction
- Banks
- Consulting
- Credit Union
- Data
- Services
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With LEVEL5’s 20 years of experience, we have developed a modern growth playbook that relies on big data rather than old-school intuition, providing quantifiable insights that have consistently achieved business success.
In this article, we will explore the significance of data in expanding financial institutions long-term, the limitations of intuition, and how LEVEL5’s data-driven approach can help your institution make strategic decisions with unparalleled precision.
The Power of Data
Data vs. Information
Data is the foundation, but it is the interpretation of that data that turns it into actionable information. Think of an alarm clock displaying the time—it’s data. The actionable information is that it’s time to wake up. Similarly, financial institutions need actionable information—what to do and when to do it—derived from data in order to make informed decisions.
Using Data for Strategic Branch Network Decisions
LEVEL5’s Strategic Consulting Group has a finely honed analytical process, utilizing both private and public data points. We have developed custom algorithms that provide fool-proof, data-driven facts to guide strategic decision-making. This approach ensures that expansion market decisions are not based solely on intuition, but rooted in concrete data.
Market Analysis for Credit Union & Bank Growth
When assessing new expansion markets, relying on intuition is no longer sufficient.
For example, when considering a new branch location, perhaps a specific idyllic area in the community first comes to your mind.
You might “feel” this is a prime spot for growth, but how far does this “feeling” really get you?
Sure, it may be a well-trafficked area, perhaps near a hub of retailers, but what if there are even more optimal locations in your town unbeknownst to you, spaces with even more traffic, even more of your member demographics, and with even more potential for future growth?
It pays to know!
That’s why each market decision must be backed up with careful, in-depth analysis that helps you minimize unknowns and maximize potential.
LEVEL5 has been assisting clients with market analysis for two decades. Our comprehensive approach examines state, county, metro, and trade areas to determine growth trajectories that make sense both in the present and for the next 5-10 years. The resulting reports provide clients with a 10-year branch pro forma, offering accurate visibility into how a branch will perform on a specific street corner.
By analyzing data at various levels, including state, county, metro, and trade areas, we provide actionable insights that enable informed decision-making.
De-risking Growth Decisions with Unbiased Data
The Role of Data in De-risking Decisions
Data provides clarity and reduces uncertainty when making growth decisions. It allows financial institutions to understand their “elbow room” in a given market and forecast performance accurately.
By running multiple pro formas that consider branch types, personnel, and technology fit, LEVEL5 ensures decisions are based on reliable data rather than subjective intuition.
Data Points the Way
The Power of Data-Driven Decision Making: Insight Beats Intuition
Data-driven decision making is not new. Industries such as e-commerce and sports have long embraced the power of data to enhance their strategies. Financial institutions can also harness this power to inform their branch playbook and make well-informed decisions.
By basing your decision-making on quantifiable insights rather than intuition, you set your financial institution—whether a community-owned bank or credit union—on a path toward sustainable, long-term growth.
LEVEL5’s Holistic Approach
LEVEL5’s approach to strategy and market analysis goes beyond traditional consulting engagements. We combine market analysis with site selection, ensuring that the quantifiable insights provided are actionable. Our comprehensive process involves two main components: critical inputs and outputs.
Critical Inputs:
The critical inputs for LEVEL5’s market analysis are derived from a range of data sources. These include proprietary data points exclusive to LEVEL5, as well as data points specific to the financial institution itself.
Staffing interviews provide qualitative and quantitative insights, while market segmentation analysis and trade area analysis contribute to a comprehensive understanding of the market.
Outputs:
The outputs of LEVEL5’s market analysis process provide clients with actionable information.
A 10-year pro forma offers visibility into a branch’s performance, including key factors such as loans, deposits, and return on investment.
Branch type models allow for flexibility in considering different branch types, while the staffing model helps evaluate the impact of personnel on performance.
Additionally, technology-needs assessment ensures that capital costs related to technology are considered in growth decisions.
Grow Your Financial Institution with Confidence Through a Data-Driven Strategy
In the dynamic world of financial institutions, and especially in a tough business environment like the one we’re facing today, relying solely on old-school intuition is no longer enough to stay competitive. By embracing big data and adopting a data-driven approach, financial institutions can make informed decisions and build with confidence.
LEVEL5’s expertise in utilizing data and providing actionable insights has made us a trusted partner for financial institutions looking to design and build successful branches.
By leveraging the power of data, LEVEL5 helps financial institutions navigate the evolving landscape with assurance, backed by accurate insights and strategic decision-making.
Contact LEVEL5 today to learn more about our proprietary data-driven approach and unlock the growth potential of your financial institution.