Boost Branch Performance? Make It Opportunity-Based.

The impact of changing customer preferences, accelerated by the pandemic, continues to be felt in branch networks across the U.S.  New-to-bank account sales per branch were down 17% in 2022 compared with 2019, and sales of additional accounts to existing customers were off 14%. This is on top of branch-count declines in the last three years of between 5% and 15% among most institutions. 

To be sure, boosting branch account sales across the board will be challenging. But there’s one area of focus where banks can get the most bang for the buck: high-opportunity branches that are underperforming across key product dimensions. 

A framework Curinos uses to analyze performance categorizes branches by market opportunity (by decile) and compares their performance with other branches with the same opportunity (measured as a percentile). The framework does this for each individual product, as a branch may have different opportunity levels for different products. For example, the opportunity for checking may be based on churn while the opportunity for home equity may be driven by housing values. 

Strong market performance can mask potential that may exist even in low-performing branches within those markets. (See Figure 1.) Diagnosing and addressing the reasons for low performance in high-opportunity branches can raise the ceiling for opportunity in these branches to a much higher level and thereby provide greater upside for the bank.