Map your market with GIS: as a marketing tool, the geographic information system has come of age. What is it? And how does it work? And how can you integrate GIS with your MCIF to boost the analytical power of both types of software?

• Author: Reider, Steven
• Position: Fundamentals

A geographic information system (GIS) is software that displays data in the form of geographic maps. These maps provide an easy way for bank marketers to compare the characteristics of current and proposed markets. Since banks are often aligned geographically--branches reporting to cities, cities reporting to regions--the ability to display demographic, competitive and performance data on maps enhances the way that marketers view their market areas.

GIS maps fall into two categories:

Thematic maps link a data element to an underlying geographic unit, such as a census tract or a county. The term thematic refers to the theme of the map, that is, the map illustrates (by color or pattern) a statistical value for each location. The example map on page 44 shows the median income of each census block group in the Dallas-Fort Worth, Texas, metropolitan area. This map allows a bank marketer to quickly identify higher income areas by their darker coloring, perhaps to determine which branches warrant wealth management officers. The two areas outlined in yellow boxes both appear promising.

Point maps depict the location of items, such as a bank's checking customers, or the locations of competing institutions. The next example map on page 45shows clients of two different branches and allows the viewer to evaluate whether the trade areas of these branches overlap, and if it would be feasible to close one of the offices without risking significant run-off. If we close Branch 24, will clients use Branch 63 or one of the other nearby offices, or will they leave the bank? GIS applications can conduct spatial queries on point maps, that is, make queries that answer questions such as: How many of these customers live within 2 miles of the branch to be close? Or within 2 miles of any remaining branch?

Most GIS tools contain demographic variables such as household counts, growth projections, income, age, and housing characteristics, all of which can be displayed thematically. Some products contain variables specific to our industry, such as estimates of deposits per household for each block group, census tract and county. When purchasing GIS software, always examine which data are included. Although most products contain similar variables, certain data must be purchased, and costs vary widely.

Thematic maps of demographic data typically support resource allocation decisions, such as where to deploy a new branch, an additional officer or a direct marketing...