Do you have the information and technical tools you need
to evaluate your business options?
The managing partners of Market ID have over three decades
of experience working for banks, thrifts and credit unions ranging in size from
new charters to major regional providers. This experience includes years of
work in financial analysis, systems, information management, branch and acquisitions
planning, marketing and market research. These skills may be used to identify
market opportunities or to evaluate and prioritize alternative proposals. In
most instances these opportunities require a thorough analysis of markets and
member or customer households.
Following are typical opportunities identified or evaluated
for Market ID clients
Evaluation of new markets requires not only a thorough
understanding of each prospective market, but an understanding of the client's
strategies and capabilities as well. Articulation of a strategy will rule out
certain markets while our internal analysis will indicate an institution's ability
to compete. For these reasons, our evaluation of new markets begins with an
analysis of our client.
The market evaluation involves data collection and analysis
regarding characteristics such as market size, demographics, growth, competition,
employers, employment and retail support.
Uncovering under served markets is appropriate for financial
institutions that want to be a dominant competitor in their region. For these
firms, we analyze their current market coverage including the local market penetration
of each branch. These patterns are mapped to identify areas of strength and
weakness. Areas of weakness are further analyzed to determine possible service
areas. The potential of each market is further evaluated to determine projected
deposit and loan balances.
Segment strengths & weaknesses
We use a proprietary segmentation system that categorizes
every customer or member household into mutually exclusive segments based on
their product use and balances. These segments initially are evaluated based
on their composition and contribution to balances compared to peers.
If files are available for two dates, the households are
evaluated based on retention, new customer/member development and movement among
segments.
Surveys of delivery systems preferences are used to capture
information about the anticipated use of services by your customer/member households.
Households are asked about recent changes in the way they use services and their
anticipated changes over the coming year. These services may include drive-up
windows, ATMs, debit cards, home banking, online bill paying, audio response
systems and other options.
These choices are quantified and potential users are described
by their demographics, segments, product use, balances and other characteristics.
Current share of product balances
Preference surveys also are used to identify aggregate
product use by households using your institution. The survey provides an understanding
of the share of deposits and loans held in various balance ranges at your institution
and your competitors'. In addition, the survey identifies the share of households
that maintain their balances at your institution versus your competitor's. Since
the survey identifies primary financial institutions, you can determine your
main competitors for these balances.
The most useful projections are for households, housing
type and employment. The forecasts used by Market ID are from local and regional
planners rather than national data vendors. Local sources are most familiar
with recent trends, land availability and demand.
Forecasts provide an indication of the amount and direction
of anticipated growth and these projections can be used to model the potential
impact on branches.
Household forecasts are particularly valuable for
projecting the balance impact of population growth. Accounts per household,
average account balances and household penetration levels for each local neighborhood
are combined with current and projected household estimates to model potential
deposit and loan balances. The model can be adjusted to reflect alternative
scenarios. These projections combined with an analysis of performance at other
locations, also are used to estimate the potential business opportunity at new
locations.