A decision model for bank branch site selection: Define branch success and do not deviate

Abstract

Site selection is one of the most important decision making processes for firms since, if done correctly, it provides access to the best customers and the greatest market potential. In contrast, poor location choices are costly and difficult to reverse. This paper deals with the single branch site selection problem in the banking context. Due to the high level of complexity (several factors have to be taken into consideration in the decision making process as well as a wide range of entities' internal requirements), to date there is no single procedure that fits all needs. This paper attempts to provide a solution to this problem by proposing a unified method based on minimizing the distance from the candidate-branch to the most successful branches, taking into account each banking institution’ notion of branch success. This methodology would work well at the lowest possible cost.