Performance evaluation and risk analysis of online banking service

Performance evaluation and risk analysis of online banking service Purpose – Online banking has attracted a great deal of attention from various bank stakeholders such as bankers, financial service participants, and regulators. The purpose of this paper is to analyze the online banking service performance of giant US and UK banks. Risk analysis is also conducted. Design/methodology/approach – This paper connects the principal component analysis (PCA) method with the data envelopment analysis (DEA) method to estimate the online banking performance. Data are collected from 2007 annual reports of giant banks in the USA and the UK including both financial and non‐financial variables. Findings – Most giant banks are performing well based on DEA analysis. Employees turn out to be a key variable that contribute most to banks' revenue. Different DEA models can be classified into cost‐ and online‐oriented models, which is consistent with existing work based on data from other nations. Originality/value – This paper presents a unique demonstration of using PCA and DEA for evaluation of giant banks with online banking service. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Kybernetes Emerald Publishing

Performance evaluation and risk analysis of online banking service

Kybernetes, Volume 39 (5): 12 – Jun 15, 2010

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
0368-492X
DOI
10.1108/03684921011043215
Publisher site
See Article on Publisher Site

Abstract

Purpose – Online banking has attracted a great deal of attention from various bank stakeholders such as bankers, financial service participants, and regulators. The purpose of this paper is to analyze the online banking service performance of giant US and UK banks. Risk analysis is also conducted. Design/methodology/approach – This paper connects the principal component analysis (PCA) method with the data envelopment analysis (DEA) method to estimate the online banking performance. Data are collected from 2007 annual reports of giant banks in the USA and the UK including both financial and non‐financial variables. Findings – Most giant banks are performing well based on DEA analysis. Employees turn out to be a key variable that contribute most to banks' revenue. Different DEA models can be classified into cost‐ and online‐oriented models, which is consistent with existing work based on data from other nations. Originality/value – This paper presents a unique demonstration of using PCA and DEA for evaluation of giant banks with online banking service.

Journal

KybernetesEmerald Publishing

Published: Jun 15, 2010

Keywords: Cybernetics; Performance appraisal; Risk analysis; Mathematical analysis; Virtual banking; Customer services quality

References

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