A fuzzy MCDM approach for evaluating banking performance based on Balanced Scorecard

  • Authors:
  • Hung-Yi Wu;Gwo-Hshiung Tzeng;Yi-Hsuan Chen

  • Affiliations:
  • Department of Business and Entrepreneurial Management, Kainan University, No. 1, Kainan Road, Luchu, Taoyuan 338, Taiwan;Department of Business and Entrepreneurial Management, Kainan University, No. 1, Kainan Road, Luchu, Taoyuan 338, Taiwan and Institute of Management of Technology, National Chiao-Tung University, ...;Division of Global Purchasing, JI-EE Industry Co., Ltd., No. 498, Sec. 2, Bentian St., An Nan Dist., Tainan 709, Taiwan

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2009

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Abstract

The paper proposed a Fuzzy Multiple Criteria Decision Making (FMCDM) approach for banking performance evaluation. Drawing on the four perspectives of a Balanced Scorecard (BSC), this research first summarized the evaluation indexes synthesized from the literature relating to banking performance. Then, for screening these indexes, 23 indexes fit for banking performance evaluation were selected through expert questionnaires. Furthermore, the relative weights of the chosen evaluation indexes were calculated by Fuzzy Analytic Hierarchy Process (FAHP). And the three MCDM analytical tools of SAW, TOPSIS, and VIKOR were respectively adopted to rank the banking performance and improve the gaps with three banks as an empirical example. The analysis results highlight the critical aspects of evaluation criteria as well as the gaps to improve banking performance for achieving aspired/desired level. It shows that the proposed FMCDM evaluation model of banking performance using the BSC framework can be a useful and effective assessment tool.