A Multi-Criteria Decision Analysis Framework for Prioritizing Investments Evaluation in Banking Sector: An Application on Asean Market

The purpose of the present study is the development of classification model taking into account a set of different criteria that could be used in the evaluation of strategic investment alternatives in the banking sector. The model takes into account the main criteria required to enrich the quality of a company's information system. The global financial crisis has exacerbated the problem of seeking new markets for financial intermediaries as well as competition between them. The same crisis has also highlighted the problem of limiting errors in the strategic decisions for the development of each banking institution new business. The planning and appraisal of a new business projects involve rather complex tasks. Multi-criteria methods provide a flexible tool that is able to handle and bring together a wide range of variables appraised in different ways and thus offer valid assistance in supporting financial economic decision processes. Unfortunately a great number of determinants can create problems with the evaluation. Thus it is necessary to select a limited number of important indicators. In this paper we build a synthetic index, starting from a selection of a set of indicators, and weighting them via linear and non linear multivariate analysis. We use a sample of 42 criteria, extracted from World Bank database, that includes indicators of the macroeconomic, institutional and regulatory environment, for all Asean countries, during 1995-2011, as well as basic characteristics of the banking and financial sector. The resulting ABA (Attractiveness of Banking activity) Index could be an useful tool in financial business opportunities evaluations.