Most banks take a one-size-fits-all approach to their branching strategies rather than tailor products and services to each branch based on the needs of individual markets.

In a recent poll Fiserv (FISV) conducted during a web seminar, 64% of participants said that their banks' do not take into account such factors as income, competition and concentration of small businesses when devising their business plans. For example, a bank might opt to put wealth managers in all their branches when a better approach would be to staff up only those branches in more affluent neighborhoods, according Andy Grinstead, a senior vice president at Fiserv. Or the bank might set unrealistic goals for loan growth because certain branches might be located in markets where competition is already fierce or, conversely, there simply is not enough demand.

"At too many community banks, the same budgets and goals are given to every branch," Grinstead said in the Fiserv report released last week. "This can result in overly aggressive goals for some and too easily attainable goals for others."

Grinstead said that branches should be treated as individual businesses, with their own goals for cross-selling and customer retention, and he advises banks to conduct extensive market research to help set realistic targets.

"With the right kind of market intelligence, branches might not only have more realistic goals and smarter tactics, they could also be far more focused and better contributors to a healthy bottom line," he said.

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