Measuring bank branch efficiency using data envelopment analysis: managerial and implementation issues

Data Envelopment Analysis (DEA) is used to assess the efficiency of branches of a major Canadian bank (‘Canbank’). First, a DEA model of American branch bank efficiency is utilized to build a model with Canbank data, then model outcomes are compared to the outcomes of the US study and the differences explained. Subsequently, the model is revised to represent the particular circumstances of Canbank's western, urban branches. Differences in outcomes between the revised model and the initial model are identified, then analysis with the revised model is conducted. Observations on implementing DEA in a work environment are also provided.