Case Study

Leading Indonesian Commercial Bank Enhances Branch Transformation Strategies with Location Analytics

The Challenge

The client is an Indonesian commercial bank with millions of customers across 62 cities in Indonesia and a pioneer in mobile cash technology. As Indonesia’s banking landscape grew more competitive and the rise of concerns over the impact of the COVID-19 pandemic, the client needed to find their competitive edge to continue growing in times of critical uncertainty.

The client turned to ADA to leverage our data analytics expertise to evaluate several key locations to determine the presence and distribution of Syariah banking competitors that caters to their Muslim target audience. Additionally, potential relocation opportunities for their Syariah bank branches was also identified by studying their existing under-performing branches.

The Strategy

ADA devised a strategy for the client to exceed the optimal outcome one can only get from conducting nationwide research for customer profiling. By utilising XACT, ADA’s proprietary data management platform, ADA was able to draw out fundamental information to assess location opportunities such as:
    1. Audience movement by:
      • Monthly
      • Weekday vs weekend
      • Peak vs non-peak hours.
    2. Area density by:
      • Customer footfall
      • Existing customer density
      • Affluence level
      • Commercial vibrancy
      • Dominant SME industry
      • Dominant persona
      • Dominant age group & gender
    3. Competitive intensity

The pain points above were used as a guideline to tackle the following problems:

  1. Identify low/non-penetrated hotspot locations for a new branch concept
    The client would be able to identify the unpenetrated “hotspots” for a particular branch format, which can further deep dive into the market environment by using the customer and Point of Interest (POI) filters to validate the branch model. In this instance, the client was trying to identify a new wealth centre branch location with minimal competition and wanted to understand the target market profile of the identified location.
  1. Determine whether to retain or relocate branches
    The client would be able to determine whether its several existing branches can be retained by being sustainable, or whether a new branch or a relocation would be necessary.
  1. Identify unserved/underserved location for customers and the right branch mix
    The client would be able to identify the underserved areas of its existing customer groups based on the local target audience and market profiles, where high concentration of its active customers and QR merchants are located. This provides the right assessment whether the location is fit for a new branch to expand upon.

The Execution

A total of three solutions were crafted to address the problem statement:

  1. Regional Location Planner: Split into 8 different regions, each with multiple filters such as home vs. footfall density, segment, age group, gender, affluence, months, days, and time intervals. This was intended to verify the customer behaviour of a particular location.
  2. Industry and Commercial PO Dashboard: Enables the client to choose multiple variables on province, type (industry or commercial), and grouping (industry/commercial category), with colour-concentration intensity. For example, red, orange, and green shades indicate high, medium, and low POI density. This is intended to verify the industrial and commercial environment of a location.
  3. Customer Zip Dashboard: Displays the density of the client’s customer in particular areas based on customer segments such as company/merchants/premier customers with activity status (dormant vs active).

The Results

The client was able to identify multiple non-performing branches that were meant to service specific target audiences. ADA identified location with the highest concentration of the desired target audience allowing the client to strategise its relocation plans.

The client was able to determine strategic locations with richer concentration of high affluent population (wealth managers, businesses, and employee personas) without any banking service presence. Furthermore, the location also has a larger Muslim population, which meets the key criteria for the client’s expansion of Syariah bank branches.

ADA’s Location Planner insights and report were integrated into the core of the client team’s 5-year branch transformation blueprint.