ICBC optimized 16,000 bank branches with IBM's reconfiguration models

ICBC, the world's largest publicly traded bank by market capitalization, deposit volume, and profitability, runs a network of over 16,000 branches.

To keep its position in a fast-changing Chinese market, ICBC partnered with IBM to customize Branch Reconfiguration, an operations-research-based branch network optimization system.

BR was implemented in more than 40 major cities. In Suzhou, a typical major city, ICBC attributes US$1.04 billion in increased deposits to the system, which also guided service capabilities to match regional economies and customer distribution.

Treat branches as an optimization problem

Location and service mix are jointly optimized, not decided case by case

The model ties branches to regional economy and customer distribution

A 16,000-branch network makes small per-branch gains huge

Bank and IBM research team tailored generic OR to banking constraints

A physical network that took decades to build can be rebalanced like a portfolio: when growth shifts geography, model-based location and service-mix decisions beat branch-by-branch judgment.

ICBC's Branch Reconfiguration was a 2011 Franz Edelman Award finalist. The Interfaces paper reported the Suzhou result of US$1.04 billion in increased deposits and the rollout across more than 40 major cities.