Mathematical Models in Banking Sector in the Context of the new Economy

Recent advances in communication technology are changing the way that traditional banking is done. Technology has added a new dimension to the competitive pressures that are already reshaping the banking industry. The resulting changes will have a great impact firstly on the reconfiguration of a bank branches network according to the dictates of the market, secondly on the design of new products and on the development and the use of alternative distribution channels and finally on the customers’ switching behavior.. In this study that presents an overview of my PhD thesis, different issues relating to the reorganization of banking industry are examined. Specifically the performance of a bank branch network, the online banking as an alternative distribution channel and the duration of the relationship among customers (individuals or enterprises) are the three interrelated parties of this thesis. Optimization techniques, generalized linear models and proportional hazard models are used in order to determine products and services which are offered to bank clients through traditional and Internet channels, forecasting customers’ attitudes (adoption or rejection) to the new products and the time horizon of their cooperation with their bank. All three sections are exploring issues that put in the fundamentals of Customer Relationship Management (CRM) initiatives. Bank’s management team could use the findings of this study, in order to determine specific attributes in designing financial services and products, which would add in customers’ satisfaction. The proposed approach could have significant implications for enlarging the duration of the relationship among customer and bank and for maximizing bank’s performance.