Fifth Third employs heat mapping to determine optimal locations for branch expansion
Fifth Third Bank Expands Presence in the Southeast with Data-Driven Approach
Fifth Third Bank is set to significantly increase its footprint in the Southeast region, with plans to open approximately 200 new branches over the next four years. This ambitious expansion strategy is guided by a patent-pending geospatial heat mapping tool, which aids in identifying potential branch locations with a high success rate.
The heat map, developed by Fifth Third Bank, uses a proprietary Market Strength Index (MSI) combined with a patented geospatial heat map. This analytical tool evaluates market potential and strength at a granular level, considering diverse data inputs such as existing retailers, competitor presence, local income, and cell phone data to identify potential customer hot spots.
By the end of 2028, Fifth Third Bank expects to rank No. 5 in locational share for banks throughout the Southeast. The bank plans to continue expanding in cities like Columbia, Charleston, South Carolina, Huntsville, and Birmingham, Alabama, with the goal of increasing density in these markets.
The bank's expansion strategy is not new to the region, as Fifth Third entered the Southeast more than a decade ago. Today, it has over 200 client-facing people in Southeast markets across commercial banking and wealth management.
Other banks are also vying for a larger share of the Southeast market. PNC and Bank of America have announced plans to expand their presence in the region. Bank of America, for instance, is targeting nine new markets, with three of them - Louisville, Kentucky; Birmingham, Alabama; and Huntsville, Alabama - located in the Southeast.
Indiana-based First Financial has also deepened its presence in the Southeast market through an acquisition announced in November 2023. The significant population growth in states like Florida and South Carolina has led to increased competition among banks for market share in the region.
Fifth Third Bank's future investments in its branch network are expected to result in $15 billion to $20 billion of additional deposits over the next seven years, according to Chief Operating Officer Jamie Leonard. The bank's team uses the heat map to identify focus areas for new site locations, which they then send their brokers to explore. Within six months of deciding to enter a market, Fifth Third Bank has more than 75% of its targeted sites under contract.
The heat map divides the country into 1/8-mile hexagons to create a comprehensive grid, allowing for a precise analysis of potential branch locations. This data-driven approach ensures long-term success by selecting locations that are positioned to meet customer needs effectively and by supporting a complimentary digital and in-person banking experience. The system enhances personalized customer service by enabling bankers to offer tailored advice based on AI-powered insights related to demographic, economic, and competitive factors within the area.
In summary, Fifth Third's geospatial heat mapping tool is a sophisticated, analytic-driven method that identifies high-potential branch locations, blending geographic data with market analytics to optimize expansion and maximize success in the Southeast region.
(1) The geospatial heat map, a sophisticated analytical tool developed by Fifth Third Bank, utilizes a combination of technology such as a Market Strength Index (MSI) and patented geospatial heat mapping, to select potential branch locations with a high success rate.
(2) Fifth Third Bank's future investments in its branch network are expected to be driven by technology, as the bank employs a data-driven approach that includes the use of the heat map to identify focus areas for new site locations, enhancing personalized customer service and maximizing success in the Southeast region.
