Estimation of Effectiveness of Modern Information Systems and Technologies in Banks By Balances Scorecard (BSC) Method

Today, it is relevant for banks to use modern advancements in information technology (IT) such as blockchain, artificial intelligence, and modern specialized systems. However, before their implementation, it is necessary to assess the impact of modern technologies on the bank’s operations and the effectiveness of their use, which can be quite challenging. There are various methods, but one of the best approaches is the development and evaluation of business processes within the bank, considering the use of modern technologies. Business processes, through their modeling, allow the effectiveness of using certain tools to be assessed. The paper describes modern IT systems and technologies used in leading institutions of the banking sector. As example there are provided operations related to working with loans. The business processes have been developed using traditional bank information system, as well as a business processes with using one of the innovative specialized systems in credit activities. Business processes models, their simulation, and the simulation results are presented. Based on the results, the advantages of using specialized systems can be assessed. The approach of evaluating business processes can also be used to assess the effectiveness of other any new tools. However, this would only be an evaluation of one specific direction. The relevant issue, however, is the comprehensive evaluation of the bank's operations and of the use of modern IT achievements within it. In general, various methods are used to assess the effectiveness of the bank's operations and of its use of IT and information systems (IS), such as Return on Investment (ROI), Total Cost of Ownership, System Usability Scale, and others. However, only the Balanced Scorecard (BSC) provides the opportunity to evaluate the bank's operations comprehensively, and importantly, considering the business processes in which modern IT achievements are applied. The history of the Balanced Scorecard (BSC) – a system of balanced indicators – is connected with the formation of the Balanced Scorecard concept in 1990 when the well-known auditing and consulting company "KPMG Peat Marwick" began researching tools and possibilities for increasing management efficiency at its research center. In general, at the level of business processes, strategic activities are controlled through Key Performance Indicators (KPIs), which represent measures of goal achievement and also indicate the effectiveness of business processes and each employee’s performance. Therefore, the balanced system of indicators (BSI), which is focused on the evaluation of KPIs, serves as not only a strategic but also an operational management tool. The advantage of BSI is that an organization implementing this system obtains a coordinated system of actions that aligns with the strategy at all levels of management and integrates various functional areas, such as: personnel management, finance, IT, and others. This paper proposes an approach to evaluating the effectiveness of bank operations based on the Balanced Scorecard method. The key steps are outlined, and KPIs that could be used to evaluate the bank’s business processes and the application of modern IT in them are suggested.