Title: Sophisticating business performance management for banks: using data envelopment analysis on business process level

Authors: Anne Schaefer; Andreas Burger; Jürgen Moormann

Addresses: ProcessLab, Frankfurt School of Finance & Management, Sonnemannstr. 9-11, 60314 Frankfurt am Main, Germany. ' Commerzbank AG, 60261 Frankfurt am Main, Germany. ' ProcessLab, Frankfurt School of Finance & Management, Sonnemannstr. 9-11, 60314 Frankfurt am Main, Germany

Abstract: Crucial bank inefficiencies are rooted in the bank's production processes. From an operations perspective, the assessment of inefficiencies, especially in highly standardised processes, should lead to better directed action for improvement and hence efficiency enhancement. This paper presents a new application of DEA for the measurement of business process efficiency. In our case study, the efficiency of the securities settlement and clearing process of a large European bank is analysed. It is a unique, large-scale dataset containing actual production data of this bank. Two different input-output models are used, representing most important objectives of operations managers in process performance analysis. The results show a high variance in process performance among different perspectives of analysis, indicating production inefficiencies in the process execution.

Keywords: banking; business processes; Malmquist DEA; data envelopment analysis; process management; securities settlement; securities clearing; banks; bank inefficiencies; standardised processes; directed action; improvements; efficiency enhancement; efficiency measurement; large-scale datasets; sophistication methods; production data; input-output models; operations managers; process performance analysis; production inefficiencies; process execution; Europe; business performance; performance management; efficiency management; service sector organisations.

DOI: 10.1504/IJBPM.2012.047293

International Journal of Business Performance Management, 2012 Vol.13 No.3/4, pp.227 - 243

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 15 Jun 2012 *

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