Professional Documents
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Proceedings of the 2009 International Symposium on Web Information Systems and Applications (WISA’09)
Nanchang, P. R. China, May 22-24, 2009, pp. 206-209
Abstract—Performance management of commercial banks is meet the banking needs of strategic development.
an important aspect of banking business management. this Specific performance:
paper makes study about how to use the Balanced • Put emphasis on the financial indicators, and
Scorecard as a tool, which is applied to commercial banks
ignore the non-financial indicators. Traditional
performance management system, and points out that it
breakthrough the defects in the traditional single performance management ignored the non-
application of financial indicators which measures financial factors, with the result that the
performance. And it raises the value of performance conclusion can not be fully reflected the overall
management appraisal system based on the introduction of operations of the bank. At the same time,
customer factors, internal business processes, employee financial indicators can only reflect the
learning and growth and financial factors. This paper also performance of banks in the past and does not
makes study about the commercial banks in the reflect the bank's future operating conditions.
performance of the Balanced Scorecard Management
• Put emphasis on internal evaluation of operating
System mechanism, the strategy of application, application
limitations, and outlook on the future of commercial
conditions, while neglecting external factors. In
banking services model based on the above points. the rapid and complicated changing of business
environment, banks are facing with challenges
Index Terms—Balanced Scorecard, commercial banks, from the external environment. If the banks did
performance management not correctly analyze the external environment
and reflect what it is during the process of
I. INTRODUCTION performance management, banks can not give an
accurate analysis of their own strengths and
The introduction of performance management of
disadvantages, it can not understand the
commercial banks have some important roles in the
opportunities and threats facing either, so it is
commercial banks. Since the Balanced Scorecard was
difficult to win in the fierce competition[3].
invented in 1990s, it was received a wide range of use
• Put emphasis on traditional assets, and neglet
and promotion in the global business community, and
intangible assets. Bank of fixed assets are
some of the major international banks have successfully
important, but the banking sector is a knowledge-
used the Balanced Scorecard, which makes its
intensive industries, and financial knowledge,
performance increase greatly. China Domestic banks
intellectual resources and other intangible assets
should learn from successful experience of international
of banks are more important.
large banks, and establish a comprehensive performance
evaluation system which meets self-demanding[1].
In recent decades, in the context of constant innovation Ⅲ. BALANCED SCORECARD AND PERFORMANCE
of global financial products, especially in the United MANAGEMENT SYSTEM OF COMMERCIAL
States in 2008 financial crisis triggered by global BANKS
financial turmoil, how to manage the banking
performance effectively? In response to this problem and A. The basic content of the Balanced Scorecard
the current problems of commercial bank performance BSC (balanced score card,)was presented in the
management, this paper makes research about how to use "balanced scorecard: a good performance evaluation
the Balanced Scorecard as a tool, which is applied to system",by Harvard Business School professor Robert S.
commercial banks performance management system[2]. Kaplan and the rejuvenation of the Global Strategy
Group's founder and president, David P. Norton Balanced
II.THE PROBLEMS IN PERFORMANCE Scorecard showed the great vitality since it appeared. It
MANAGEMENT OF COMMERCIAL BANKS can effectively help enterprises give solution on two
major problems: performance evaluation and the
In the rapid development of financial markets,
implementation of the strategy. In 1,000 companies in the
commercial banks are facing with intense competition. world which "Fortune" magazine published, 70% of
The traditional performance management appears to be
which used the Balanced Scorecard system; "Harvard
inadequate in how to measure all-round performance to Business Review" sees it as the most influential strategic
management tool in 75 years.
207
Deposit and loan business
assessment、Guest structural Improve
assessment、Assessing the quality employee
Profitability of services、the development of engagement、
assessment、Expand the electronic banking。。。 Examination
intermediate business、 retention
Raise the level of interest rate、
rates and lending quality、 Market share 、 target number of Assessment
improve cost-efficiency、 obtaining customers 、 Customer
attention、the growth rate of customer
Strengthen the capacity of
of complaint 、 Innovative
the loan proceeds, and services。。。
optimize loan
Employee
Satisfaction、Staff
violation rate、Staff
customer
violation rate、pass
rate of Status
Economic Value
Examination、The
Added Bank
operational capacity
profits、The per financial Sustainable
competitive of standard rate、
capital profit、
Professional
Non-interest
Development
income、Net
Program、Staff
interest
Business process training
income、
satisfaction。。。
Marketing cost
income ratio、
Office
expenses、Labor Assessment of new
costs、Loan products and
Product and service innovation、New
products and services revenue、The new completion of tasks、
non-performing loan rate and the rate of Control newly-issued
increase、The number of internal credit risk、Strengthen
regulations、Responsibility for the internal controls。。。
accident rate、The incidence of major
Figure 2. The four indicators of commercial banks Bank of evaluation index system
performance and operating results. Hence it can reflect Commercial banks should not only focus on
the integrated operation of organizations, so that it can quantitative analysis about the financial profitability,
balance and perfect the performance evaluation, and is liquidity and safety but also on effective qualitative
conducive to long-term development of the organization. analysis about bank risk control, internal management,
customer service levels when it takes performance
Ⅳ. THE PRACTICALITY OF THE BALANCED accessment. Qualitative analysis can not be used with
SCORECARD TO PERFORMANCE MANAGEMENT quantitative analysis, but it is exactly what the banks
SYSTEM OF COMMERCIAL BANKS need to do to safeguard the healthy operation, which
requires qualitative and quantitative analysis to be closely
In essence the commercial banks are comprehensive, integrated. Balanced Scorecard can consider such a
multi-function financial enterprises which is in terms of qualitative analysis to reveal the potential risks of
profits and operats financial assets and financial services operations.
as a target. In the current financial innovation would be Balanced Scorecard has great foresight for the future
difficult to produce differentiated, so the service development of the bank, and takes the long-term
relationship is the direction the bank want to lead to. The development into account, which makes banks have a
Balanced Scorecard can provide support in this regard: high degree of adaptability and long-term strategy when
208
Bank Management Committee Report performance
results
Key Performance Indicators Working
Group
BSC Management Group
Report
Design of key performance indicators
they are in the face of rapidly changing business To update mode of banking services can broaden the
environment. field of financial services, and improve the quality and
In addition to taking internal operational process into the efficiency of financial services. To achieve innovation
account, the external environment factors should be also model, it is necessary to improve the "Smile" services,
considered at the same time, such as the Balanced personal mechanism and incentive mechanism. We
Scorecard customer level. By considering the bank's should speed up the reform of financial supervision,
market share, customer acquisition rates, and customer improve the level of financial supervision in order to
satisfaction. It takes market competition factors into the adapt to the development of the new banking services
performance of management, to achieve a more truly model and respond to changings in financial innovation.
reflecting on the bank's operations and development. The banking industry should also accelerate the
transformation of service delivery model to accelerate the
Ⅴ. CONCLUSION pace of mixed services to enhance international
competitiveness.
The establishment of the governance mechanism for
the Balanced Scorecard is shown as Figure 3. In the REFERENCES
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