LAKE JACKSON, Texas -- Texas Dow Employees Credit Union is relying on an old name in office gear for the latest tools in deciding when and where to place new branches.
The $1.2 billion CU has deployed the WinSITE solution from MapInfo Corp., a part of Pitney Bowes, a venerable company perhaps best known for its ubiquitous office postage meters.
But rather than just putting its stamp on a proposed location, WinSITE uses demographics, consumer behavior models, and GIS-mapping tools to, as the company said, "examine all the relevant market forces in developing its recommendations for changes to the branch network: customer behavior and preferences...total demand for financial products and services, barriers to commerce, competitor locations, and their effectiveness, market growth, product profitability and delivery system capital requirements and operating cost structure."
Using such tools replaces "just going on gut feeling," said Max Villaronga, vice president of retail delivery at TDECU.
"You can make an educated guess on where you think a branch would do well, but you don't necessarily have the demographic and market information to back that up, nor can you easily translate that into what your loan volume would be, your deposit balance, what kind of market penetration you can expect in the months and years to come," Villaronga said.
TDECU is using the software right now to evaluate the location of its 12 existing branches and three more coming online this year and to help plan the addition of another couple branches by 2010.
Some MapInfo clients have the Troy, N.Y.-based company run the numbers and do the analysis, and range in size from small community institutions to banks with thousands of branches.
"Our clients can license it and use it themselves or have us provide them the results on their behalf. The only difference is who's sitting at the keyboard. The end product is the same," said Bill Simmons, business practice leader for Pitney Bowes MapInfo's Financial Services Vertical.
Simmons said the solution has existed "in various forms for almost 20 years and we're always updating it," using data that include public information on new bank and credit union offices, Census data and internal demographics, and experience drawn from a database of nearly two decades of client engagements.
Villaronga said the WinSITE solution has proven useful so far in assessing both existing and potential sites, including how well the credit union's brand strength will help establish the new location and physical variables such as how many teller windows and drive-through lanes to install and where to place signage.
"It's not the primary purpose by any stretch of the imagination, but it does even play a role in our marketing now," he said.
Simmons, meanwhile, doesn't promise WinSITE's projections will always be precisely what the future holds.
"What we can tell you is that we have confidence that when you make a decision to put something somewhere based on using this, that you're looking at the best opportunities you have available to you," he said.
"No one in this business can give an exact prediction," he said. "It's modeling. But it's based on years of experience and a lot of data and we have clients who have used it for 10 or 15 years, so it must be working."
Simmons said that in the past five or six years, his company has worked with 18 credit unions and has a total of about 30 WinSITE engagements going on at any given time.
But software still doesn't completely replace gray matter.
"I think WinSITE empowers us in a lot of ways, but you're still going to have to depend on your hunches in some ways. The models don't necessarily know everything that's happening in the neighborhood, like what new roads are going to be built, for instance," Villaronga said.
"But it's definitely something to have in the toolkit. It creates a much faster decision cycle, because we can take that information and hand it off to our facilities division to locate property for us to go back out and evaluate."
And while the demographics, market analysis and mapping tools provide a basis for a decision, the credit union's execution going forward will ultimately determine the outcome, Villaronga said.
Simmons at MapInfo agrees.
"Our side of this is to use the technology to gather the information we need to tell us how strong that branch would be in the marketplace," he said. "The delivery side is up to the client.
"We can identify a major intersection as a point of real potential, but Max and his team have to go out and see what's actually there and decide what they want to do and how they want to do it. And then they have to do it. A model can only get you so far."