Quarterly Studies in Banking Management and Islamic Banking

Desining a Dynamic Model on Cost Analysis in the Banking Industry

Document Type : Original Article

Authors

Malihe Rostami 1
Adel Azar 2
Mahmoud Dehghan Nayeri 3

1 Ph.D, Faculty of Management, University of Tehran, Tehran, Iran

2 Professor, Management and Economics Faculty, Tarbiat Modares University, Tehran, Iran

3 Assistant Professor, Management and Economics Faculty, Tarbiat Modares University, Tehran, Iran

https://doi.org/10.22034/jifb.2021.265005.1226
Abstract
In recent years, the banking industry has undergone drastic changes. Banks are trying to be more cost-effective and profitable to stay competitive.  Achieving profit requires banking services to be produced and provided at a minimum cost, and revenues to be maximized.  The purpose of this study is to simulate the bank cost model to improve, control, and adjust costs and increase profitability Dynamic simulation of research using Vensim software has been performed in a period of twenty years, from 2011 to 2031 in an Iranian commercial bank. To do that, first, the main indices influencing the cost model based on the real operation were extracted; then the indices were applied to the final research model. The model simulated based on bank performance can be used as a decision tool for bank managers to reduce costs and examine the impact of relevant variables in this area.

Keywords

On-account Payments to Depositors
Doubtful Debts Expense
Administrative and General Expenses
Vensim Software
Dynamic Systems

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