Inter dependency between ATM locations and customer preferences
INTERDEPENDENCY BETWEEN ATM LOCATIONS AND CUSTOMER PREFERENCES
IS 705 – Collaborative Research Project Final Report
Group D
1. INTRODUCTION
Nowadays, with the increasing number of banks cropping up everywhere, each bank has to come up with strategies that fulfil their customer’s satisfaction to compete with their rival banks. This leads the banks to come up with many innovative services and solutions to the existing problems. Some of them include lowering the interest rates, giving special discounts, etc. One of the most important issues is to take care of the distribution of their ATMs such that the number of transactions is increased.
In this project, we have studied the same aspect which can lead a bank to retain a customer for a long time. We have tried to analyse the pattern of transactions from a sample dataset of Citybank, Singapore and try to observe the factors that contribute to the interdependency between ATM locations and customer preferences for transaction. We try to analyze how the distance of an ATM effects the choice of customer transaction (similar to the approach of Forman et. al. 2009). For accomplishing this, we got data from the Living Analytics Research Centre (LARC). This dataset consists of the transaction records of a number of Citibank customers all around Singapore. We rectify the dataset based on certain criteria which have been elaborated in further sections and produce the result with this sample only.
2. HYPOTHESES
Awareness vs. Utilization Factor
H1a: As the distance of an ATM from a MRT increases, the number of transactions decreases.
H1b: The utilization of an ATM5 is less than that of a Citibank ATM located at an approximately same distance from the MRT station
Equal likelihood of transaction
H2: customers are equally likely to conduct transactions at ATMs near their homes as compared to the ATMs near their office
3. DATA
For the simplification and unavailability of proper data we have made certain assumptions and
IS 705 – Collaborative Research Project Final Report
Group D
1. INTRODUCTION
Nowadays, with the increasing number of banks cropping up everywhere, each bank has to come up with strategies that fulfil their customer’s satisfaction to compete with their rival banks. This leads the banks to come up with many innovative services and solutions to the existing problems. Some of them include lowering the interest rates, giving special discounts, etc. One of the most important issues is to take care of the distribution of their ATMs such that the number of transactions is increased.
In this project, we have studied the same aspect which can lead a bank to retain a customer for a long time. We have tried to analyse the pattern of transactions from a sample dataset of Citybank, Singapore and try to observe the factors that contribute to the interdependency between ATM locations and customer preferences for transaction. We try to analyze how the distance of an ATM effects the choice of customer transaction (similar to the approach of Forman et. al. 2009). For accomplishing this, we got data from the Living Analytics Research Centre (LARC). This dataset consists of the transaction records of a number of Citibank customers all around Singapore. We rectify the dataset based on certain criteria which have been elaborated in further sections and produce the result with this sample only.
2. HYPOTHESES
Awareness vs. Utilization Factor
H1a: As the distance of an ATM from a MRT increases, the number of transactions decreases.
H1b: The utilization of an ATM5 is less than that of a Citibank ATM located at an approximately same distance from the MRT station
Equal likelihood of transaction
H2: customers are equally likely to conduct transactions at ATMs near their homes as compared to the ATMs near their office
3. DATA
For the simplification and unavailability of proper data we have made certain assumptions and
References: Huff, D. L. 1963. “A probabilistic analysis of shopping center trade areas”. Land economics, (39:1), pp. 81-90. Wagner, W. B. 1974. “An empirical test of Reilly 's law of retail gravitation”. Growth and Change, (5:3), pp. 30-35. Forman, C., Ghose, A., & Goldfarb, A. 2009. “Competition between local and electronic markets: How the benefit of buying online depends on where you live”. Management Science, (55:1), pp.47-57.