Location Convenience Is An Important Factor When Customers Select A Financial Institution

2500 Words Sep 16th, 2016 10 Pages
Location convenience is an important factor when customers select a financial institution
(see Mylonakis et al. 1998; Driscoll 1999). A customer may find a bank convenient if it has a branch or an Automated Teller Machine (ATM) near his / her residence or workplace, say within 2 Km1. To stay competitive, banks usually attempt to increase convenience (be as close as possible to customers) by expanding their bank and / or ATM networks. Basically, such expansions could be done in at least two ways (see Birkin et al
2002a): by building branches / installing ATMs in new locations (so called organic growth); or by acquiring an existing (e.g. competitor, partner, etc.) network. The former option is likely to be expensive and time consuming, so many banks resort to acquiring or partnering with already established ATM and / or branch networks.
Although the second option is a relatively quick way to increase network coverage, an acquired branch / ATM network is unlikely to be a ‘perfect’ complement to an existing
1 ATMs are common in the USA (and much of the world). Customers can use ATMs to access their bank accounts to obtain cash money or check available funds, etc. ATMs are available in banks and in facilities such as malls, shopping centers, gas stations, parking facilities, etc.
network, due to possible coverage overlap and / or lack of coverage. Therefore, such acquisition / partnership opportunities should be evaluated carefully so that opportunities
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