Assessing Operational Efficiency of Banks via Quantitative Analysis of ATM Location Selection Criteria

Customers require various service facilities including department stores, ATMs, and gas stations the use of which has become a daily routine. Some researchers believe that location choice of such facilities should be based on maximum population coverage within the network. The current research set out to identify potential factors that may bear an impact on location selection of ATM machines through exploring the existing literature on banking and interviewing experts in the field. Moreover, it aimed to prioritize the most important factors among those already specified through mathematical modeling. The findings emerging from the literature and expert review indicated 15 factors influencing ATM location decisions that were further subcategorized into four major factor sets of economic, competitive, coverage, and investment - legal. The results of mathematical modeling weighing revealed the priority of factors with Coverage, weighing 0.43, as the first and most important one followed in significance by economic factors, weighing 0.23, competitive factors, weighing 0.19, and investment - law factors, weighing 0.13. The results of this study also indicated that each of the four factors sets could impact decision-makers differently; therefore, bank managers are suggested to vary their decisions with respect to each of the factors to achieve optimal effectiveness.