The third measurement myth is the so called “efficiency pitfall” which places the equal sign between the branches which are the most efficient and those which are highly profitable. Adrian Kulczycki asks what should be done in the case of large branches which generate a considerable part of the overall profits but whose operations are inefficient. According to the CET expert,  the optimization of such units may be achieved through 'evolutionary' restructuring; such a branch may also be intentionally excluded from efficiency measurement procedures. The "efficiency pitfall" also concerns the branches with a very high operational efficiency and low customer service satisfaction. Adrian Kulczycki emphasizes that it is important to spot such problems, however, the solution – i.e. the issue of increasing the costs for improving the quality of customer service – is dependent upon the strategy adopted by a given bank.

The fourth myth refers to a common opinion based on the assumption that efficiency may be improved solely through the reduction of a bank's resources. Meanwhile, as says the CET expert, a precise method of efficiency measurement allows for identifying the changes occurring within the profiles of a bank’s resources thanks to which a branch’s efficiency may improve. The change of posts from customer service advisor to cashier may be an example here – and being aware of the fact in which branches such changes make the most sense is very important. A comprehensive efficiency measurement procedure provides such information.

To end the series of articles on the myths connected with the efficiency measurement of bank branches, Adrian Kulczycki proposes conducting a simple test to see whether the measurement method applied by a given bank is appropriate.

Read full article here (Polish version only)