The use of data envelopment analysis in banking institutions: Evidence from the Commercial Bank of Greece

Since 1988, the Commercial Bank of Greece (CBG) has instituted performance measurement systems for bank branches using data envelopment analysis (DEA). This is the first application of DEA in Greece and among the few around the world that have resulted in continuous use of the method within a large-scale organization. The project was undertaken by a mixed team of banking experts assisted by academics specializing in developing bank branch performance measurement systems. During the project (1988–1994) the performance measurement technology was transferred and acquired by the staff of the bank. Various methodological issues arose during this study regarding the objectives of assessing branch performance, the importance of input/output sets in assessing branch efficiency, and the behavioral implications of management control systems. The CBG (Commercial Bank of Greece) has accepted data envelopment analysis as a useful tool for assessing branch performance and for obtaining insights to support decisions.