Distribution of Bank Services and Branch Location

Because of the intangible and inseparable characteristics of the bank services, every bank needs to locate these services and branches at locations which provide accessibility to the greatest numbers of both major categories of potential customers—private individuals and firms (i.e. corporate customers). This article presents the major channels of distribution for banking services and the four main types of quantitative techniques available for bank branch location decisions—economic, spatial, bivariate and multiple regression methods. The article indicates the leading bank distribution strategies—defensive, offensive and rationalisation strategies—and attempts to assess the impact of new technology developments—particularly of Electronic Fund Transfer Systems (EFTS) and Automatic Teller Machines (ATMs)—on the future of distribution of bank services and branch location.