Alfa-Bank Russia (Marketing Logic Geonet)

2020: Network Transformation

At the beginning of 2019, Alfa-Bank began a large-scale project to transform its network of branches in Russia. The updated network should take into account the changed needs of customers, other formats of banking products and services and, of course, be convenient and comfortable for everyone.

A solution in the field of geomarketing and big data analysis was proposed for the project. Using Geonet and GIS Atlas, the bank was able to form scenarios for transforming the current network into the optimal one, varying the range of variables from the load metrics on branches to the balance between investments in branches and economic returns on them. One of the most important factors in such a system is the accounting of the geoparameters of the network: in which city, district, with what number of population, traffic, transport, environment plus more than a dozen variables, including internal banking.

It took a geo data since 2015. To minimize risks, the system laid down a forecast of the attractiveness of locations for the next 5 years, highlighting the most stable zones in terms of quality. They also added the possibility of dynamically changing the targeted development program based on incoming unscheduled factors. This approach raised the overall stability of the development programme and prioritized the focus on zones with increased development potential throughout the transformation plan. In total, the formation of the optimal scenario of "network restructuring" required an analysis of the ten-year segment: both promising and retrospective data.

"Digital twin" - the trend of working with data - is a combination of many factors: office characteristics, employees, business processes, products, locations - and transformation should take into account them all. It forms a virtual environment in which simulated objects are represented with maximum validity. This implementation allows you to carry out an unlimited amount of scripted calculations, comparing them with each other and working out any hypotheses of experts. The same denominator in these calculations becomes the same digital data format for all branches and a digital model of the network with all its characteristics, parameters and financial indicators. As a technological platform for creating such a double, a box solution was used - the Geonet service based on the Atlas geoinformation system of its own development. This service allowed you to quickly aggregate all the data that the joint team of the bank and Marketing Logic wanted to combine. Together, they built Alfa-Bank's "virtual" network and looked at how each change would affect business, its prospects and financial forecasts. In other words, the system allows you to create several development options (we can say, different scenarios of the future) and choose the best based on a detailed comparison of key performance indicators. The system created development scenarios in automatic mode, marking the best and transferring them to experts.

The forecast is built from the bottom up, from the smallest components to the overall economy of the network and the bank's profitability. First, all calculations are carried out, then they are transferred to money, which makes it possible to evaluate each component and stage from a financial point of view: both investments and returns. Immediately entering the system requirements and check lists for the premises, we get a realistic address plan for the development of the network. There are all justifications for each action initially, and the system gives realistic suggestions. Given the scale of the financial organization, this saves several months of working time of bank specialists, "said Dmitry Galkin, Managing Partner of Marketing Logic.

With the help of geoservices and data analysis, they identified the voluminous and quantitative needs of each potential location for the office and were based on them. Such a system should include not only options for "opening an office/closing an office," but also many others: reformatting, adding functions or removing some of them, increasing staff, reducing it or changing its profile or motivation. A separate and important item is long-term network planning taking into account digital channels of interaction with customers. Such channels change business processes and requirements for capacity and network format. The Geonet system perceives the office as a collection of modules combined into a single financial model. From here, recommendations are not just for branches, but for individual modules, employees, areas and other parameters, with the detail that the bank wants to see.

Marketing Logic has been developing geoservices and big data analytics for 5 years, but even taking into account our experience and complex cases in the portfolio, the tasks set by Alfa-Bank are, frankly, a non-trivial experience. The concept of phygital, the vast network of offices and the bank's desire to get ahead of the market is a certain challenge for any team. Such a strategy determines the scale and complexity of the tasks facing us, the project and cooperation. Given the technological trends, the development of geo- and AI-solutions, we can confidently say that there is a future behind this approach, and not only in the financial sphere, and we are pleased to be at its origins in Russia, "added Dmitry Galkin, Managing Partner of Marketing Logic.

The system developed for the bank employs 18 forecast models, each in its own area of ​ ​ responsibility. When forming the optimal development futprint, the bank was helped to calculate more than 21 million alternative transformation scenarios.