Comparative efficiency analysis of Portuguese bank branches

Silva Portela, Maria C.A. and Thanassoulis, Emmanuel (2007). Comparative efficiency analysis of Portuguese bank branches. European Journal of Operational Research, 177 (2), pp. 1275-1288.

Abstract

The advent of Internet banking and phone banking is changing the role of bank branches from a predominantly transaction-based one to a sales-oriented role. This paper reports on an assessment of the branches of a Portuguese bank in terms of their performance in their new roles in three different areas: Their efficiency in fostering the use of new transaction channels, their efficiency in increasing sales and their customer base, and their efficiency in generating profits. Service quality is also a major issue in service organisations like bank branches, and therefore we analyse the way this dimension of performance has been accounted for in the literature and take it into account in our empirical application. We have used data envelopment analysis (DEA) for the different performance assessments, but we depart from traditional DEA models in some cases. Performance comparisons on each dimension allowed us to identify benchmark bank branches and also problematic bank branches. In addition, we found positive links between operational and profit efficiency and also between transactional and operational efficiency. Service quality is positively related with operational and profit efficiency. © 2006 Elsevier B.V. All rights reserved.

Publication DOI: https://doi.org/10.1016/j.ejor.2006.01.007
Divisions: Aston Business School > Operations & information management
Aston Business School > Operations & information management research group
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Additional Information: NOTICE: this is the author’s version of a work that was accepted for publication in European Journal of Operational Research. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Portela, Maria C.A.S. and Thanassoulis, Emmanuel (2007). Comparative efficiency analysis of Portuguese bank branches. European Journal of Operational Research, 177 (2), pp. 1275-1288. DOI 10.1016/j.ejor.2006.01.007
Uncontrolled Keywords: banking,efficiency,profitability,service quality,Information Systems and Management,Management Science and Operations Research,Statistics, Probability and Uncertainty,Applied Mathematics,Modelling and Simulation,Transportation
Published Date: 2007-03-01

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