Premium
Efficiency of service delivery systems in large commercial banks
Author(s) -
Hunter William C.
Publication year - 1995
Publication title -
psychology and marketing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.035
H-Index - 116
eISSN - 1520-6793
pISSN - 0742-6046
DOI - 10.1002/mar.4220120809
Subject(s) - service (business) , service delivery framework , business , sample (material) , economies of scale , operations management , service system , delivery system , variation (astronomy) , scale (ratio) , marketing , industrial organization , telecommunications , economics , computer science , engineering , chemistry , physics , chromatography , quantum mechanics , biomedical engineering , astrophysics
This article provides novel empirical evidence on the cross‐sectional variation of the productive efficiency of large banks relative to their service delivery systems. The analysis is conducted using data drawn from a sample of 118 large U.S. commercial banks for the years 1989 through 1991. The analysis reveals that centralized service delivery systems increase bank costs significantly. In no case was it found that centralized service delivery systems reduce costs, as is often envisioned by proponents of centralization. It is also found that centralized back‐office operations tend to reduce costs significantly and are consistent with the existence of scale economies in bank back‐office operations. © 1995 John Wiley & Sons, Inc.