Significance of Balanced Scorecard in Banking Sector: A Performance Measurement Tool
Keywords:
Balanced Scorecard, Financial Ratios, Intangible Assets, Performance EvaluationAbstract
Performance management tool plays a pivotal task in evaluating strategic performance of banks. Financial ratios have long been used as a tool to evaluate the overall financial performance of a bank. But recently BSC has become increasingly important strategic management tool that translates visions into profitable actions, particularly focusing on intangible assets such innovation, employee skills and knowledge levels, customer relationships etc. Due to intensity of characteristics comprised in today’s markets whereby banking sector face fierce competition not only on a domestic scale but also on a global scale which compel them to drive strategy to achieve performance objectives such as long-term profitability and customer loyalty. In this paper, a relation between the significance of measurement of intangible assets and integration of contingencies in performance evaluation is shown which establishes the need to design a comprehensive performance evaluation system for Indian banks.
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