ATM location analysis, completed with detailed ATM usage, traffic and potential estimation.

The bank wanted to better understand ATM usage patterns. On one hand the bank was looking for an answer regarding the real ATM usage potential, on the other hand about the customer traffic and ATM usage patterns. For 80% of the analysed ATMs, we proposed new location where, due to the assumed potential, the expected revenue growth would yield the cost of the ATM relocation within one year.

Answered questions and performed tasks

The client asked the following questions about the catchment area and performance of the ATMs:

• Why do some downtown ATMs perform well while others badly?
• Why do some uptown ATMs perform better than certain downtown ones?
• What is the catchment area of each ATMs?
• Where do ATM users come from?
• What are the defining characteristics of the neighbourhood that affect the number of transactions at an ATM?

In the context of customer movement and ATM usage, we examined the following issues:

• How much distance customers are willing to travel to use their own bank’s ATM?
• What is the relationship between loyalty and ATM distance?
• How big is that customer base that is not covered by the ATMs’ catchment areas, and what ATM devices do they use?
• What percentage of transactions are taken by other ATM networks due to the lack of own ATM nearby? Is this number large enough to cover the area?

In parallel with answering the above questions, the main goal of the project was to identify ATMs that might be worth relocating to a position with greater potential. We had to do this along two criteria:

a) the relocation should take place to a site where the full cost of the relocation will be recovered within one year by exploiting the expected greater potential;

b) the relocation should take place to a location that has the same catchment area as the old ATM location, thus minimizing the number of customers that can be lost.

Results

We were able to offer at least five new locations in the given catchment area for 80% of the analysed ATMs, where – based on the assumed potential – the expected revenue growth due to the increase in the number of transactions will yield the cost of relocation of the ATMs within one year.

Assuming that the relocation of an ATM costs on average HUF 1-1.5 million, this means an annual increase in revenue of at least HUF 1-1.5 million per ATM.

It is important that the proposed better locationscan already be approached with a possible contract offer (institutions, offices, shops, public buildings, workplaces, etc.)

The results were presented in the form of a map-based, interactive dashboard, which will be an excellent tool for analyzing the location of the bank’s own and thos eof the competitors’ ATM networks in the future, as well as for locating new, promising ATMs.