Bangko Sentral Ng Pilipinos Case Study

Chapter 1

INTRODUCTION

Background of the study

Banks are vital institutions in any society as they significantly contribute to the development of an economy through facilitation of business (Sanderson, 2013). The primary role of bank to the economy is obtaining fund from depositors and savers as the sources of funds (Greenbaum and Thakor, 2007) and lend it to those who are in need of funds (Gobat, 2012). Bangko Sentral ng Pilipinas is the central bank of all banks in Philippines (Pagoso, 2010). Its obligation is to maintain price stability (Lamberte, 2002) and providing upbeat leadership that will aid for the progress of the economy (Mariano, 2014). Some important elements in banks in order to survive and continue to operate and serve the

To Huu and Kar (2000), product services presented is essential to students because they prefer quick services and banks are being assessed according to the services rendered by the personnel. True enough because banks which have fewer employees especially tellers cause counter traffic and transactions become more time-consuming. In the study of Devlin (2002), clients who have more understanding in terms of finances are considering the inner aspect of banks like services offered, rate of profit, and low charges. In addition, interest rates, opportunity to avail loan, past connection with the bank are said to essential elements in choosing mortgage contributor. Lee and Marlowe (2003) conducted a study on the factors that contributed to the decision making of clients in selecting a bank for checking account. Their study revealed that the major factors are convenience, less charges, balance limit, and variety of services. Phuong and Har (2000) did an investigation in Singapore with the undergraduate students to know their banking choices with the use of analytical hierarch method and figured out that price, and product scopes are the primary

He asserts that this theory selects the best way to measure the consumer preferences on banks to observe the preference power of individual depending on its income and the prices of goods and services. Furthermore, it works on the assumption that the consumers have considered alternatives before having a final decision. Hence, by having possible choices the consumer can choose one option, this option must be the preferred preference.

Additionally, this theory, clearly, tries to understand the preferences of a consumer among different bank institutions. For instance, if the consumer chooses bank A over bank B, where both banks have the same quality of product and services, it is assumed that the first bank is always preferred to the second, and that the consumer chooses the second bank only if the first bank cannot provide their needs and expectations.

On the other hand, according to Coit et al (1998), analyzing studies using artificial neural network gives an accurate and fast interpretation since after the training process is completed, calculations are no longer needed unlike other traditional mathematical and statistical methods. Furthermore, the most essential advantage of artificial neural network is adaptability in which this application automatically adjusts their weights to optimize the behavior of