According to doctoral candidate Juha Eskelinen, the best bank branches perform well no matter what the conditions. For example, the size of a branch office influences its sales performance only up to a point.
‘It is a good idea to focus on management and people skills, as these are the factors that influence efficiency the most. However, size can pose limitations for smaller branches, in which case combining of resources is sensible,’ Mr Eskelinen states.
The results of Mr Eskelinen’s dissertation have, in part, played a role in the development of Helsinki OP Bank Ltd.’s branch network, the establishment of new branches and the combining of smaller branches into larger entities. In this way, utilisation of resources has been more profitable in sales work.
Dissertation results can be utilised across the board
In his dissertation, Mr Eskelinen examined how the productive efficiency of bank branches could be evaluated, when branches were defined as sales units. As of yet, there has been little research carried out in this area. The efficiency of branches is calculated by comparing a branch's realised sales and the amount of sales that would have been a possible. Similar branches were used as points of comparison.
‘The methods used in this dissertation can be utilised more broadly in the financial sector, as well as in other business activities. In addition to size, evaluation can focus on branch performance as compared to what management values. Are sales diverse? Do the services sold meet with the customers’ varied needs?' Mr Eskelinen explains.
Tools for recognising good practices
The methods Mr Eskelinen has developed will help the bank take into account the varied operating environments and changing conditions of each branch, when they evaluate the efficiency and development of a branch’s procedures. ‘In this way, the company will be able to form a more accurate and fair image of how the team and management at each branch have performed,’ Mr Eskelinen describes.
The methods will allow the company to recognise which teams have good management and good practices. According to Mr Eskelinen, this will help those who could do better. Branches with the poorest performance can learn from those that are genuinely productive. They may recognise a possible disadvantageous, downward spiral and can put an end to it.
‘Additionally, teams will be given realistic objectives, when it is understood what they are capable of.’
Dissertation
In his dissertation, Mr Eskelinen examined Helsinki OP Bank Ltd braches. The performance of these branches was evaluated from the perspective of productive efficiency from 2007 to 2010. During this time period there were sharp fluctuations in demand for banking services.
Juha Eskelinen will defend his dissertation at the Aalto University School of Business on Friday, 2 April.
More information
- on the event
- Juha Eskelinen, juha.p.eskelinen@aalto.fi
- Dissertation as pdf (aaltodoc.aalto.fi)