Case study: Bank Account Forecast

A well-known commercial bank in Australia is interested in estimating the number of new bank account opened by customers in each year. The number of new accounts opened in this bank has increased slowly over years even during the global financial crisis (2008–2009). Top management strongly believes that they need a long-term strategic plan for the bank which is a 5-year forecast for the number of new accounts opened. To achieve this aim, the bank operations manager examined past account data and also extracted the employment rate over 30 years (1991-2020). The resulting data are shown in below table:

Year	No of new account(000)	Employment Rate (%)		Year	No of new account(000)	Employment Rate (%)
1991	3.136	90.42		2006	6.007	95.22
1992	3.309	89.27		2007	5.826	95.62
1993	3.803	89.13		2008	8.266	95.77
1994	6.807	90.28		2009	7.128	94.44
1995	2.386	91.53		2010	9.670	94.79
1996	4.643	91.49		2011	11.419	94.92
1997	2.911	91.64		2012	11.335	94.78
1998	2.553	92.32		2013	9.358	94.34
1999	4.422	93.13		2014	10.418	93.92
2000	3.613	93.72		2015	10.459	93.95
2001	3.948	93.26		2016	7.328	94.29
2002	3.347	93.63		2017	9.004	94.41
2003	3.907	94.07		2018	8.559	94.70
2004	4.071	94.60		2019	8.476	94.84
2005	6.666	94.97		2020	8.635	93.39

Using the following forecast methods discuss which method fits best for the bank’s strategic plan. You need to justify the selection of one method over another.

• Moving average (you need to find the best value for n)
• Linear trend (trend projection)
• Linear regression

Can you exclude a portion of the data for the analysis? If yes, why?

The bank operations manager also collected the data on Australia’s GDP Per Capita (Gross Domestic Product) and believes that GDP Per Capita can also affect the number of a bank accounts. Below table shows the data for the same period:

Year	GDP Per Capita (000A$)		Year	GDP Per Capita (000A$)
1991	18.8218		2006	36.04492
1992	18.57012		2007	40.96005
1993	17.63453		2008	49.60166
1994	18.04614		2009	42.77236
1995	20.31963		2010	52.02213
1996	21.86133		2011	62.51783
1997	23.4686		2012	68.01215
1998	21.31896		2013	68.15011
1999	20.53304		2014	62.51079
2000	21.67925		2015	56.75572
2001	19.49086		2016	49.97113
2002	20.08248		2017	54.02797
2003	23.44703		2018	57.35496
2004	30.43068		2019	55.0572
2005	33.99924		2020	51.81215

Between GDP Per Capita and employment rate which one do you think can better estimate the number of new bank accounts?