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- Adding value to bank branch performance evaluation using cognitive maps and MCDA: a case studyPublication . Ferreira, F. A. F.; Santos, Sérgio Pereira dos; Rodrigues, Paulo M. M.Bank branch performance evaluation is a difficult endeavour. Some of the main reasons for this difficulty are the complexity inherent in the variety of aspects considered in the evaluation, and the multiple and conflicting interests of the different stakeholders involved. In this paper, we show how cognitive mapping and measuring attractiveness by a categorical-based evaluation technique can be used to support the evaluation of bank branches through the development of multidimensional performance evaluation systems, and to deal explicitly with the trade-offs between the different dimensions of performance and interests of different stakeholders. A case study is discussed where these techniques are used in a constructive way, making the learning activity easier and introducing transparency in the decision-making process. The strengths and weaknesses of the integrated use of these two operational research techniques in this context are also discussed.
- An AHP-based approach to credit risk evaluation of mortgage loansPublication . Ferreira, F. A. F.; Santos, Sérgio Pereira dos; Dias, V. M. C.Mortgage loans for home purchase require careful analysis by all parties involved in the transaction, and credit-scoring is usually adopted to assist the decision process. From a credit institution standpoint, credit-scoring for mortgage loan risk evaluation becomes even more important in scenarios of economic turbulence and recession, primarily because of the severe restrictions imposed on credit availability that result from reduced access to both money and debt markets and subsequent decreasing liquidity. Employing an AHP – Analytic Hierarchy Process – based approach in the creditscoring system used by one of the major banks in Portugal, this study proposes a methodological framework conceived to adjust trade-offs among evaluation criteria and provide decision makers with a more transparent mortgage risk evaluation system. Practical implications of our framework are also discussed.
- Evaluating retail banking quality service and convenience with MCDA techniques: a case study at the bank branch levelPublication . Ferreira, F. A. F.; Santos, Sérgio Pereira dos; Rodrigues, Paulo M. M.; Spahr, R. W.The intangibility of banking services makes the evaluation of service quality and customer convenience difficult to measure. This paper aims to construct an integrated evaluation system for retail banking service quality and convenience at the bank branch level by combining cognitive mapping with measuring attractiveness by a categorical based evaluation technique. We strive to introduce transparency in the decision making process and add to the performance literature in retail banking. Strengths, weaknesses and practical applications of our multiple criteria evaluation system are also discussed.
- Assessing credit risk of mortgage lending using MACBETH: a methodological frameworkPublication . Ferreira, F. A. F.; Santos, Sérgio Pereira dos; Marques, C. S. E.; Ferreira, J. J. M.Purpose - Considered the largest investment for most households, buying a house requires careful and transparent analysis by all parties involved in the transaction. The aim of this paper is to propose a methodological framework allowing for the readjustment of trade-offs among risk evaluation criteria, considered of extreme importance in the lending decision process of mortgage loans. Design/methodology/approach – Multiple criteria decision analysis (MCDA) has proved over the years to be effective and versatile in handling compensations among criteria. Measuring attractiveness is applied by a categorical based evaluation technique (MACBETH) to a pre-established structure of credit-scoring criteria for mortgage lending risk evaluation. This pre-established structure is currently used by one of the largest banks in Portugal. Findings – The framework allowed the authors to provide the credit experts who participated in the study with a more informed, transparent and accurate mortgage-lending risk-evaluation system. The sensitivity and robustness analyses carried out also helped in promoting discussion and supporting the readjustments made. Research limitations/implications – The study shows the usefulness of using the MACBETH approach to assist credit analysts in making better informed decisions, and opens avenues for further research. However, due to the dependence on the participants involved, extrapolations without proper caution are discouraged. Practical implications – The credit analysts who participated in this study considered the framework more discerning in terms of Basel directives. Originality/value – The integration of MACBETH and credit-scoring mechanisms holds great potential for risk assessment and decision support. No prior work reporting the application of MACBETH in terms of mortgage-lending risk-evaluation is known.
- Avaliação de agências bancárias: importância e métodos genéricos de avaliaçãoPublication . Ferreira, F. A. F.; Santos, Sérgio Pereira dos; Rodrigues, PauloO aumento da competição a nível global, associado às rápidas inovações tecnológicas, à proliferação de produtos e serviços e à crescente necessidade de recursos humanos qualificados, tem exposto as instituições bancárias a um sistemático e diário processo de evolução com o objectivo de se destacarem e/ou, somente, sobreviverem no mercado. Sem descurar todos os esforços e efectivo empenho efectuados a nível nacional e internacional, para obter a tão almejada competitividade, certo é que em muitos quadrantes os resultados ficam aquém do esperado. A evidência empírica demostra, por exemplo, que em muitas instituições financeiras, diversas acções de melhoria resultaram numa duplicação de esforços, em investimentos desnecessários ou em resultados inexpressivos quando não mesmo negativos. Por conseguinte, torna-se fácil entender o porquê de uma das principais preocupações das instituições bancárias recair sobre a necessidade de criar, ou simplesmente utilizar, sistemas eficazes para avaliação das respectivas agências. É precisamente com base neste enquadramento que tem emergido uma vasta panóplia de diversificados métodos e técnicas de avaliação ajustáveis à realidade do Negócio Bancário. Pautando-se por esta linha conceptual, o presente artigo visa contribuir para uma reflexão que deverá incidir sobre o contributo das agências tradicionais para o desenvolvimento da actividade bancária, assim como quanto à necessidade de uma avaliação do seu desempenho.
- A multiple criteria information system for pedagogical evaluation and development of teachersPublication . Filipe, M. N. M.; Ferreira, F. A. F.; Santos, Sérgio Pereira dosInformation systems for the evaluation of pedagogical practices emerged to improve the teaching activity and encourage pedagogical development of teachers. The implementation of these systems has been interpreted in different ways, depending on each school’s administration board and/or the person responsible for the evaluation process. This ambiguity (and inherent subjectivity) is a barrier to the principles of transparency, equity and fairness in the pedagogical performance evaluation of teachers. In order to overcome this obstacle, this paper proposes a multiple criteria decision analysis (MCDA) information system to support evaluation of pedagogical practices, providing a better basis for the justification and explanation of decisions regarding the pedagogical evaluation and performance development of teachers, and leading to a more transparent and fairer evaluation system.
- A multiple criteria framework to evaluate bank branch potential attractivenessPublication . Ferreira, F. A. F.; Spahr, R. W.; Santos, Sérgio Pereira dos; Rodrigues, Paulo M. M.Remarkable progress has occurred over the years in the performance evaluation of bank branches. Even though financial measures are usually considered the most important in assessing branch viability, we posit that insufficient attention has been given to other factors that affect the branches’ potential profitability and attractiveness, such as: location features, trade area characteristics and facilities management. Based on the integrated use of cognitive maps and multiple criteria decision analysis, we propose a framework that adds value to the way that potential attractiveness criteria to assess bank branches are selected and to the way that the trade-offs among those criteria are obtained. This framework is the result of a process involving several directors from the five largest banks operating in Portugal, and follows a constructivist approach. Our findings suggest that the use of cognitive maps systematically identifies previously omitted criteria that may assess potential attractiveness. The use of multiple criteria techniques clarify and add transparency to the way trade-offs are dealt with. Advantages and disadvantages of the proposed framework are also discussed.