Identifying Environmental Factors Affecting Bank Branch Performance using Data Envelopment Analysis

In today´s economy and society, the banking industry is of great importance to every one of us. We all depend on the efficiency and quality of services that the banking industry provides. With the improvement in technology, the competition in the banking industry has become increasingly intense. Therefore, performance analyses in the banking industry attract more and more attention. This paper presents an evaluation of 1097 branches of one big Canadian bank nationwide using data envelopment analysis. Findings from this study show that branches have a high level of operational efficiency. However, there is still some room for improvements. Special emphasis was placed on discussing the environmental factors that affect the branch performance. The potential management uses of the DEA results were also presented. All the findings are discussed in the context of the Canadian banking market