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The Study of Location Strategy for Bank's Branch Network through the Analysis of Inter-regional Financial Transaction Network

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3 Author(s)
Jae Weon Hong ; Sch. of Bus., Dongseo Univ., Dongseo, South Korea ; Won Eui Hong ; Yoon Sik Kwak

This study attempts to shed light on the factors that influence the locations of bank branches in establishing a bank¿s branch network from the angle of the network analysis. Whereas the previous studies analyzed the locations of bank branches on the basis of their geographical characteristics and image, the significance of this study rests upon the fact that it endeavors to explore the location factors from a new perspective of the movement path of financial customers. For this analysis, the network between administrative districts, which form the fundamental unit of a location, was analyzed based on the financial transactional data. The important findings of this study are as follows. First, in conformity with the previous studies, the income level, the spending level, the number of businesses, and the size of workforce in the pertinent region were all found to influence the size of a bank¿s market. Second, the centrality index extracted from the analysis of the network was found to have a significant effect on the locations of bank branches. In particular, the degree centrality was revealed to have a greater influence on the size of a bank¿s market than does the closeness centrality. Such results of this study clearly suggest the needs for a new approach from the perspective of network in furtherance of other factors that have been considered important in the previous studies of the branch network strategies.

Published in:

2008 Second International Conference on Future Generation Communication and Networking  (Volume:3 )

Date of Conference:

13-15 Dec. 2008