Activity-Based Management and Banking Health Assessment System

The survival and growth of the banking industry, on the one hand, requires the trust and satisfaction of individuals in the community, on the other hand, requires financial health. In this research, we seek to evaluate the impact of activity-based management on indices of banking health in the banking system of IR Iran. The activity-based management tools examined in this study are activity-based budgeting and activity-based costing. The population of this study consisted of banks approved by the Central Bank of the Islamic Republic of Iran; however, as not all the banks provided the required information and due to the need to obtain reliable data, 19 banks, which had submitted financial statements for the year ending in 2017, were chosen as study samples. Structural equation modeling and correlation analysis were used to investigate and answer the research questions. The results of this study showed that activity-based management techniques have a significant impact on banking health, and more precisely, activity-based costing is the most effective. In terms of prioritizing the components of ABC and ABB techniques, ABC training and ABB training have the first and second priorities, respectively. Next to these two components, "understanding, supporting, and engaging in strategy" as well as "acceptance and implementation by units" of ABC components bear more significance.