Branch Reconfiguration Practice Through Operations Research in Industrial and Commercial Bank of China

  • Authors:
  • Xiquan Wang;Xingdong Zhang;Xiaohu Liu;Lijie Guo;Thomas Li;Jin Dong;Wenjun Yin;Ming Xie;Bin Zhang

  • Affiliations:
  • -;-;-;-;-;-;-;-;-

  • Venue:
  • Interfaces
  • Year:
  • 2012

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Abstract

Industrial and Commercial Bank of China (ICBC), the world's largest publicly traded bank as measured by market capitalization, deposit volume, and profitability, has a network of over 16,000 branches. This network is an important core competency and is fundamental to ICBC business development. To keep its leading position in the fast-changing and competitive China market, ICBC needed to reconfigure its branch locations and service capabilities to match the regional economy and customer distribution; therefore, it had to quickly identify new high-potential market areas in which to open branches. ICBC partnered with IBM to customize an operations research-based branch network optimization system, Branch Reconfiguration (BR), which it has implemented in over 40 major cities in China. In a typical major city (e.g., Suzhou), ICBC attributes US $1.04 billion in increased deposits to BR. The BR project is an example of successfully using operations research and management sciences to transform the service channels of a large bank in a manner that will continue to improve the bank's business development and decision making.