If you work at a financial institution, you’re likely to come across the term “geocoding.” But what does geocoding mean, and why is it important to banks? Keep reading to find out.
In this article, we’ll cover:
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Geocoding in Banking
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What geocoding means for banks
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How geocoding differs from mapping
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Why it’s important to geocode correctly
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Why banks geocode for CRA, HMDA, and fair lending requirements
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CRA assessment area requirements
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HMDA reporting and census tract assignment
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Fair lending and redlining analysis
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Mapping Geocoded Data
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Why it’s important to map your geocoded data
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How to properly map and geocode data
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The types of maps banks use
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Geocoding examples
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Common mapping/geocoding errors
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Geocoding Tools
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Why it’s important to use a geocoding tool
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How to choose a geocoding or mapping tool
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How Kadince makes geocoding easy
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Key geocoding terms to know
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Geocoding FAQs
Geocoding in Banking
What is geocoding for banks?
Geocoding is the process of turning a physical address into geographic identifiers (such as a census tract, county, or latitude and longitude) so the location can be mapped and analyzed.
In banking, geocoding is used to place loans, investments, branches, and service activities into the correct census tract for CRA, HMDA, and fair lending reporting. Accurate geocoding ensures regulatory compliance, prevents mapping errors, and supports assessment area analysis.
How does geocoding differ from mapping?
Geocoding tells you where a location belongs in geographic terms.
Mapping is the process of visualizing those geocoded locations on a map. It turns geographic data into a visual format so you can analyze patterns, boundaries, and activity across an area. Bankers use geocoded records to build assessment area maps, market penetration maps, branch/service area maps, and activity heatmaps.
Here’s an example of geocoded data vs mapped data:
In short:
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Geocoding = assigning the correct geographic data to an address
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Mapping = displaying that geocoded data on a map so it can be interpreted
Why it’s important to geocode correctly
For banks, geocoding is a critical step in CRA, HMDA, and fair lending analysis, and it’s equally important to geocode correctly. Accurate geocoding ensures every address is placed in the correct census tract, which directly affects how a bank’s loans, services, and investments are evaluated.
When geocoding is correct, banks can:
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Ensure regulatory compliance by aligning every record with the correct FFIEC and Census Bureau boundaries
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Prevent mapping errors that can misrepresent where loans and services occur
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Support accurate assessment area analysis, especially when evaluating community needs and exam readiness
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Reduce the risk of HMDA resubmissions caused by mis-coded applications
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Avoid redlining concerns by ensuring geographic patterns are represented accurately
Correct geocoding gives your bank a clear picture of its impact. Even small errors can lead to:
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Mismatches between your data and exam expectations
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Loans showing up outside your assessment area when they actually belong inside
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Misidentifying low- or moderate-income neighborhoods
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Incorrect mapping during CRA exams or fair lending reviews
How easy it is to geocode correctly depends on the tool you use. Some geocoding tools are manual and time-consuming, while others are intuitive and easy to use. And some banks don’t use a geocoding tool at all, opting instead to manually pin each location on a map. If your bank is looking for a geocoding tool that’s accurate and easy to use, check out Kadince software.
Why Banks Geocode for CRA, HMDA, and Fair Lending Requirements
Geocoding isn’t just something bankers do for fun. In fact, several different regulations (CRA, HMDA, and fair lending) require banks to understand where their customers live and where lending and other activities occur. Geocoding is what helps banks showcase this data for regulators and prove that they are making an impact.
CRA assessment area requirements
Geocoding is crucial to defining and evaluating a bank’s CRA assessment area. Every loan, service, and community development activity must be tied to the correct census tract so regulators can determine whether the bank is meeting the credit needs of its communities.
Banks use geocoded data to:
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Identify where their lending is concentrated
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Confirm whether activity falls inside or outside their assessment area
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Evaluate performance in low- and moderate-income (LMI) neighborhoods
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Prepare for CRA exams by mapping loans, service hours, and investments
Here’s an example of an assessment area map:
HMDA reporting and census tract assignment
HMDA requires banks to collect and report the census tract for most mortgage applications and originations. Geocoding ensures these tract assignments match official FFIEC boundaries so examiners can compare a bank’s activity to demographic patterns, peer institutions, and market benchmarks.
Geocoding supports HMDA compliance by:
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Assigning the correct state, county, MSA/MD, and census tract
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Ensuring consistency between internal data and FFIEC expectations
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Reducing the risk of data quality issues or resubmissions
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Helping banks analyze lending patterns across different geographies
Fair lending and redlining analysis
Fair lending reviews and redlining analyses examine whether a bank’s lending patterns are equitable across different neighborhoods. Geocoded data allows regulators and banks to identify geographic disparities that may indicate risk.
Geocoding helps banks:
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Map lending activity across minority and non-minority census tracts
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Identify gaps or inconsistencies in geographic distribution
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Evaluate marketing and outreach strategies
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Support documentation during exam reviews
Mapping Geocoded Data
Once an address has been geocoded, the next step is to map that geospatial data. Mapping turns census tracts, coordinates, and geographic identifiers into a visual representation of where your bank has made an impact. Accurate maps help banks prepare for exams, understand their assessment area(s), identify performance gaps, and evaluate fair lending risk.
Bank mapping essentials
Mapping turns geocoded records into a visual representation of your bank’s footprint. Banks commonly map:
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Loans and applications
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Branch and ATM locations
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Community development activities
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Service hours and event locations
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CRA assessment areas
Mapping helps banks identify patterns, understand their performance in different neighborhoods, and prepare for CRA and fair-lending reviews.
Geocoding examples in banking
Here are a few ways banks use geocoded and mapped data:
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Loan mapping: Visualizing home, small business, or consumer lending patterns across census tracts.
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Assessment area confirmation: Ensuring the bank’s AA matches where lending actually occurs.
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Redlining analysis: Comparing lending in minority vs. non-minority census tracts.
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Service activity mapping: Showing where employees volunteer or where financial education events take place.
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Branch distribution maps: Evaluating physical presence across communities.
These examples help banks understand where they’re performing well versus where they may need additional outreach, service, or community development efforts.
Common mapping/geocoding errors
Even small errors in geocoding can lead to major problems once the data is mapped. Common issues include:
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Incorrect census tract assignment
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Manually dropped pins in the wrong tract
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Using outdated FFIEC or Census data
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Formatting inconsistencies
These errors can cause unnecessary exam questions and misleading performance conclusions. Using an accurate, up-to-date geocoding tool helps eliminate these issues before they become exam findings.
Geocoding Tools
Why it’s important to use a geocoding tool
Geocoding is essential, but it isn’t always easy. While some very small banks can get away with manually geocoding and mapping activities themselves, most banks rely on bank geocoding tools to properly geocode and map their data.
A geocoding tool isn’t something you should plan on buying last minute. To make exam preparation easy, it’s best to geocode and map activities throughout your exam cycle, not just at the end. This will prevent large lists of data needing to be mapped, not to mention good old exam panic.
How to choose a geocoding or mapping tool
There are lots of bank mapping software and geocoding tools available, and many of them include more than just mapping/geocoding functionality.
As you explore geocoding and mapping tools for financial institutions, make sure to look at:
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How accurate the geocoding and mapping is
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How quickly it’s able to geocode and map data
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How it aligns with FFIEC requirements
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How it integrates with other CRA/HMDA solutions
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What reporting is available and how easy it is to build reports
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How activities are documented and whether support documents are retained
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What kind of audit trail is available
Kadince makes geocoding easy
Kadince’s new Geocoding & Mapping product makes geocoding and mapping your data easier than ever. A CRA mapping tool built specifically with smaller banks in mind, this product has everything you need to geocode and map your loans, services, investments, branches, ATMs, and more. In fact, you can map anything you want as long as you have addresses!
And for larger banks, Kadince’s full CRA Management product lets you track, manage, and report all your CRA data, with geocoding and mapping included. No matter which product appeals to you, Kadince includes:
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Bulk .CSV upload for instant batch geocoding
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FFIEC data
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Interactive map with tract, demographic, and assessment layers
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Filtering by income level, geography, or loan type
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Exportable maps and data
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Unlimited users
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Unlimited data storage
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Easy import/export
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Enterprise-grade security
To learn more about how Kadince makes it easy to geocode and map data, schedule a 30-minute demo.
Geocoding in Kadince
Mapping in Kadince
Key geocoding terms to know
Here are a few key geocoding terms you’ll likely encounter:
Geocode
Converting a physical address into geographic identifiers—such as a census tract, county, or latitude/longitude—so it can be mapped and analyzed.
Reverse geocode
Turning geographic coordinates (like latitude/longitude) back into a physical address or location description.
Census tract
A small, standardized geographic area defined by the U.S. Census Bureau, used for analyzing population, income, and housing data. CRA and HMDA reporting rely on census tract assignments.
MSA / MD / county
Geographic regions used by regulators:
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MSA (Metropolitan Statistical Area): A large population center and surrounding communities
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MD (Metropolitan Division): A smaller division within an MSA
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County: A local government boundary within a state
Banks use all three to define assessment areas and interpret lending patterns.
FFIEC geocoding
Manually using the FFIEC’s official tool to assign census tracts and geographic data to addresses for CRA, HMDA, and fair lending reporting. It ensures alignment with regulatory boundaries.
HMDA geocoding
Geocoding specifically used to assign loan application locations to the correct census tract for HMDA reporting and analysis.
Geospatial mapping
Visualizing geocoded data on a map to identify patterns, trends, and service areas—such as where loans are made, where customers live, or where a bank’s assessment areas lie.
Geocoding FAQs
How often does geocoding need to be updated?
Geocoding should be updated whenever an address changes, when assessment areas are revised, or when new census or FFIEC data becomes available.
How do banks without physical locations handle mapping?
Banks without traditional branches define assessment areas based on lending and deposit patterns rather than branch locations. Mapping focuses on where customers live and where activity occurs.
Who creates maps for banks?
Banks use a mix of regulatory tools, third-party vendors, and internal compliance teams to create maps. Common sources include the FFIEC Geocoding Tool (mainly for finding addresses, not building maps), census mapping resources, and specialized CRA/HMDA software like Kadince.
What is reverse geocoding?
Reverse geocoding is the process of converting geographic coordinates—such as latitude and longitude—back into a physical address or location description. Reverse geocoding can be used to validate map points, confirm census tract assignments, and verify whether geospatial data matches the expected physical address.
Is FFIEC geocoding required?
Banks are not required to use the FFIEC geocoding tool specifically, but they must geocode their data accurately using reliable, documented methods.
How often do CRA exams require mapping?
Mapping is reviewed every CRA exam cycle to verify accurate assessment areas, identify lending patterns, and evaluate service distribution. Many banks update their maps more frequently to stay aligned with changes in activity, branches, or census data.
What CRA information must branches make available?
Each bank branch must make the bank’s CRA Public File available to the public, which includes AA maps, branch lists, services offered, public comments, and the most recent CRA performance evaluation.
None of Kadince, Inc., its affiliates, or its respective employees, directors, officers, and agents (collectively, “Kadince”) are responsible or liable for any content or information incorporated herein. Read full disclosure.
