Efficiency, customer service and financial performance among Australian financial institutions

International Journal of Bank Marketing

Volumn 22, Issue 5, 2004, Pages 319-342

  Duncan, Elizabeth ^a   Elliott, Greg ^b  

^a AusDiagnostics Pty Ltd   (Australia)

^b MACQUARIE UNIVERSITY   (Australia)

Author keywords

Australia; Banks; Credit unions; Customer services quality; Financial performance; Process efficiency

Indexed keywords

EID: 84986091929     PISSN: 02652323     EISSN: None     Source Type: Journal    
DOI: 10.1108/02652320410549647     Document Type: Article

References (54)

1. Arbuckle, J. (1997), Amos Users' Guide Version 3.6, Smallwaters Corporation, Chicago, IL.
2. Athanassopoulos, A. and Giokas, D. (2000), “The use of data envelopment analysis in banking institutions: evidence from the Commercial Bank of Greece”, Interfaces, Vol. 30 No. 3, pp. 81-95.
3. Avkiran, N. (1995), “The shortcomings of traditional bank performance measures in assessing the performance of your branch”, The Australian Banker.
4. Banker, R., Charnes, A. and Cooper, W. (1984), “Some models for estimating technical and scale inefficiencies in data envelopment analysis”, Management Science, Vol. 30, pp. 1078-92.
5. Banker, R.D., Potter, G. and Srinivasan, D. (2000), “An empirical investigation of an incentive plan that includes nonfinancial performance measures”, The Accounting Review, Vol. 75 No. 1, pp. 65-93.
6. Banxia Software Ltd (1998), Banxia Frontier Analyst User's Guide, Professional Edition.
7. Bates, K., Bates, H. and Johnston, R. (2003), “Linking service to profit: the business case for service excellence”, International Journal of Service Industry Management, Vol. 14 No. 2, pp. 173-83.
8. Bauer, P., Berger, A., Ferrier, G. and Humphrey, D. (1998), “Consistency conditions for regulatory analysis of financial institutions”, Journal of Economics and Business, pp. 85-111.
9. Behn, B.K. and Riley, R.A. Jr (1999), “Using non-financial measures to predict financial performance: the case of the US airline industry”, Journal of Accounting, Auditing and Finance, Vol. 14 No. 1, pp. 29-57.
10. Berger, A. and Humphrey, D. (1991), “The dominance of inefficiencies over scale and product mix economies in banking”, Journal of Monetary Economics, Vol. 28, pp. 117-48.
11. Berger, A. and Humphrey, D. (1992), “Measurement and efficiency issues in commercial banking, output measurement in the service sectors, National Bureau of Economic Research”, in, Studies in Income and Wealth, Vol. 56, University of Chicago Press, Chicago, IL, pp. 245-79.
12. Berger, A. and Humphrey, D. (1997), “Efficiency of financial institutions: international survey and directions for future research”, European Journal of Operational Research, Vol. 98, pp. 175-212.
13. Berger, A., Hancock, D. and Humphrey, D. (1993a), “Bank efficiency derived from the profit function”, Journal of Banking and Finance, Vol. 17, pp. 317-47.
14. Berger, A., Hunter, W. and Timme, S. (1993b), “The efficiency of financial institutions”, Journal of Banking and Finance, Vol. 17, pp. 221-49.
15. Brockett, P., Charnes, A., Cooper, W., Huang, Z. and Sun, D. (1997), “Data transformations in DEA cone ratio envelopment approaches for monitoring bank performances”, European Journal of Operational Research, Vol. 98, pp. 250-68.
16. Carr, N.G. (1999), “The economics of customer satisfaction”, Harvard Business Review, Vol. 77 No. 2, pp. 15-16.
17. Charnes, A., Cooper, W. and Rhodes, E. (1978), “Measuring the efficiency of decision making units”, European Journal of Operational Research, Vol. 2 No. 6, pp. 668-97.
18. Clark, J. (1988), “Economies of scale and scope at depository institutions: a review of the literature”, Economic Review, Vol. 73, pp. 16-33.
19. Clark, J. (1996), “Economic cost, scale efficiency, and competitive viability in banking”, Journal of Money, Credit and Banking, Vol. 28 No. 3, pp. 342-64.
20. Coelli, T., Prasada, R.D. and Battese, G. (1998), An Introduction to Efficiency and Productivity Analysis, Kluwer Academic Publishers, Dordrecht, pp. 1-6.
21. Cronin, J. and Taylor, S. (1992), “Measuring service quality: a reexamination and extension”, Journal of Marketing, Vol. 56, pp. 55-68.
22. Cuganesan, S., Bradley, G. and Booth, P. (1997), “Service quality and organisational performance indicators”, in Lemmink, J. and Kunst, P. (Eds), Managing Service Quality, Ch. 10, Vol. 3, Paul Chapman Publishing, London.
23. DeYoung, R. (1997), “A diagnostic test for the distribution-free efficiency estimator: an example using US commercial bank data”, European Journal of Operational Research, Vol. 98, pp. 243-9.
24. English, M., Grosskopf, S., Hayes, K. and Yaisawarng (1993), “Output allocative and technical efficiency of banks”, Journal of Banking and Finance, Vol. 17, pp. 349-66.
25. Frei, F. and Harker, P. (1999), “Projections onto efficient frontiers: theoretical and computational extensions to DEA”, Journal of Productivity Analysis, Vol. 11 No. 3, pp. 275-300.
26. Grifell-Tatje, E. and Lovell, K. (1997), “The sources of productivity change in Spanish banking”, European Journal of Operational Research, Vol. 98, pp. 364-80.
27. Hair, J., Anderson, R., Tatham, R. and Black, W. (1998), Multivariate Analysis, 5th ed., Prentice-Hall, Englewood Cliffs, NJ.
28. Hempel, G., Coleman, A. and Simonson, D. (1986), Bank Management Text and Cases, Wiley, New York, NY.
29. Heskett, J., Jones, T., Loveman, G., Sasser, W. and Schlesinger, L. (1994), “Putting the service profit chain to work”, Harvard Business Review, Vol. 72 No. 2, pp. 164-75.
30. Ittner, C.D. and Larcker, D.F. (1998a), “Are nonfinancial measures leading indicators of financial performance? An analysis of customer satisfaction”, Journal of Accounting Research, Vol. 36, pp. 1-36.
31. Ittner, C.D. and Larcker, D.F. (1998b), “Consumer satisfaction and future financial performance discussion of are nonfinancial measures leading indicators of financial performance? An analysis of customer satisfaction”, Journal of Accounting Research, Vol. 36, pp. 37-46.
32. Ittner, C.D. and Larcker, D.F. (1998c), “Innovations in performance measurement: trends and research implications”, Journal of Management Accounting Research, Vol. 10, pp. 205-39.
33. Jones, T.O. and Sasser, W.E. Jr (1995), “Why satisfied customers defect”, Harvard Business Review, pp. 88-99.
34. Kaplan, R. and Norton, D. (1996), The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston, MA.
35. Kwan, S. and Eisenbeis, R. (1992), “An analysis of inefficiencies in banking: a stochastic cost frontier approach”, FRBSF Economic Review.
36. Lehtinen, U. and Lehtinen, J. (1991), “Two approaches to service quality dimensions”, The Service Industries Journal, Vol. 11 No. 3, pp. 287-303.
37. McAllister, P. and McManus, D. (1993), “Resolving the scale efficiency puzzle in banking”, Journal of Banking and Finance, Vol. 17 No. 2, pp. 389-405.
38. Norreklit, H. (2000), “The balance on the balanced scorecard – a critical analysis of some of its assumptions”, Management Accounting Research, Vol. 11 No. 1, p. 65.
39. Parasuraman, A. (2002), “Service quality and productivity: a synergistic perspective”, Managing Service Quality, Vol. 12 No. 1, pp. 6-9.
40. Parasuraman, A., Berry, L. and Zeithaml, V. (1991), “Perceived service quality as a customer-based performance measure: an empirical examination of organizational barriers using an extended service quality model”, Human Resource Management, Vol. 30 No. 3, pp. 335-64.
41. Parasuraman, A., Zeithaml, V. and Berry, L. (1988), “SERVQUAL: a multiple item scale for measuring perceptions of service quality”, Journal of Retailing, Vol. 64 No. 1, pp. 12-40.
42. Reichheld, F. and Sasser, E. (1990), “Zero defections: quality comes to service”, Harvard Business Review, Vol. 68, pp. 105-11.
43. Rosier, M. (1999), “Development and estimation of quantitative models in social research”, working paper.
44. Rust, R., Zahorik, A. and Keiningham, R. (1995), “Return on quality (ROQ): making service quality financially accountable”, Journal of Marketing, Vol. 59, pp. 58-70.
45. Schumacker, R. and Lomax, R. (1996), A Beginner's Guide to SEM, Lawrence Erlbaum Associates, Mahwah, NJ.
46. Silvestro, R. and Cross, S. (2000), “Applying the service profit chain in a retail environment”, International Journal of Service Industry Management, Vol. 11 No. 3, pp. 244-68.
47. Soteriou, A. and Stavrinides, Y. (2000), “An internal customer service quality data envelopment analysis model for bank branches”, International Journal of Bank Marketing, Vol. 18 No. 5, p. 246.
48. Soteriou, A. and Zenious, S. (1998), “Operations, quality, and profitability in the provision of banking services”, Management Science, Vol. 45 No. 9.
49. Taylor, W., Thompson, R., Thrall, R. and Dharmapala, P. (1997), “DEA/AR efficiency and profitability of Mexican banks: a total income model”, European Journal of Operational Research, Vol. 98, pp. 346-63.
50. Wothke, W. (2000), E-mail from Small Waters Corporation, SPSS Technical and Statistical Support, June.
51. Zahorik, A. and Rust, R. (1992), “Modeling the impact of service quality on profitability: a review”, in Swartz, T. (Ed.), Advances in Service Marketing and Management, JAI Press, Greenwich, CT, pp. 247-76.
52. Bitner, M. (1990), “Evaluating service encounters: the effects of physical surroundings and employee responses”, Journal of Marketing, Vol. 54, No. 2, pp. 69-82.
53. Charnes, A., Cooper, W., Huang, Z. and Sun, D. (1990), “Polyhedral cone-ratio DEA models with an illustrative application to large commercial banks”, Journal of Econometrics, Vol. 46, No. 1/2, pp. 73-91.
54. Thompson, R., Dharmapala, P., Humphrey, D., Taylor, W. and Thrall, R. (1996), “Computing DEA/AR efficiency and profit ratio measures with an illustrative bank application”, The Annals of Operations Research, Vol. 68, pp. 303-27.