Fuzzy performance evaluation in Turkish Banking Sector using Analytic Hierarchy Process and TOPSIS

  • Authors:

  • Neşe Yalçın Seçme;Ali Bayrakdaroğlu;Cengiz Kahraman

  • Affiliations:

  • Department of Business Administration, Nevşehir University, 50300 Nevşehir, Turkey;Department of Business Administration, Nevşehir University, 50300 Nevşehir, Turkey;Department of Industrial Engineering, Istanbul Technical University, 34367 Macka, Istanbul, Turkey

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

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Abstract

The performance evaluation of banks has important results for creditors, investors and stakeholders since it determines banks' capabilities to compete in the sector and has a critical importance for the development of the sector. The aim of this study is to propose a fuzzy multi-criteria decision model to evaluate the performances of banks.The largest five commercial banks of Turkish Banking Sector are examined and these banks are evaluated in terms of several financial and non-financial indicators. Fuzzy Analytic Hierarchy Process (FAHP) and Technique for Order Performance by Similarity to Ideal Solution (TOPSIS) methods are integrated in the proposed model. After the weights for a number of criteria are determined based on the opinions of experts using the FAHP method, these weights are input to the TOPSIS method to rank the banks. The results show that not only financial performance but also non-financial performance should be taken into account in a competitive environment.