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Artificial Neural Network and Analytical Hierarchy Process Integration: A Tool to Estimate Business Strategy of Bank

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  • Mochammad Ridwan Ristyawan

    (Department of Management, Faculty of Economics and Business, Universitas Tanjungpura, 78124, Pontianak, Indonesia Author-2-Name: Author-2-Workplace-Name: Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective - The disruption has been occurring in financial services. Thus, rethinking a new strategy for banking is needed to make a sustainable innovation in organizations. Studies mentioned that formulating strategy is a very costly, time-consuming, and comprehensive analysis. The purpose of this study is to present an integrated intelligence algorithm for estimating the bank's strategy in Indonesia. Methodology � This study used the integration model between two modules. The algorithm has two basic modules, called Artificial Neural Network (ANN) and Analytical Hierarchy Process (AHP). AHP is capable of handling a multi-level decision-making structure with the use of five expert judgments in the pairwise comparison process. Meanwhile, ANN is utilized as an inductive algorithm in discovering the predictive strategy of the bank and used to explain the strategic factors which improved in forward. Findings and Novelty � The empirical results indicate that ANN and AHP integration was proved to predict the business strategy of the bank in five scenarios. Strategy 5 was the best choice for the bank and Innovate Like Fintechs (ILF) is the most factor consideration. The strategy choice was appropriate for the condition of the bank's factors. This framework can be implemented to help bankers to decide on bank operations. Type of Paper - Empirical

Suggested Citation

  • Mochammad Ridwan Ristyawan, 2021. "Artificial Neural Network and Analytical Hierarchy Process Integration: A Tool to Estimate Business Strategy of Bank," GATR Journals jfbr179, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr179
    DOI: https://doi.org/10.35609/jfbr.2021.5.4(1)
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    References listed on IDEAS

    as
    1. Laeven, Luc & Levine, Ross & Michalopoulos, Stelios, 2015. "Financial innovation and endogenous growth," Journal of Financial Intermediation, Elsevier, vol. 24(1), pages 1-24.
    2. Norzitah Abdul Karim & Syed Musa Syed Jaafar Al-Habshi & Muhamad Abduh, 2016. "Macroeconomics Indicators And Bank Stability: A Case Of Banking In Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 18(4), pages 1-18, April.
    3. repec:idn:journl:v:18:y:2016:i:4:p:1-18 is not listed on IDEAS
    4. E. Nur Ozkan-Gunay & Mehmed Ozkan, 2007. "Prediction of bank failures in emerging financial markets: an ANN approach," Journal of Risk Finance, Emerald Group Publishing, vol. 8(5), pages 465-480, November.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Bank's strategy; ANN; AHP; BSC; Indonesia.;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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