Performance-based budgeting dynamic model with the BSC approach in the Banking industry

Performance-based budgeting is a planning and measurement system that emphasizes the relationship between objectives and performance results. Through this budgeting, different sectors have been responsible for strategic objectives based on performance indicators, and resources are allocated based on priorities and measurable and results. Given the growing role of this type of budgeting in the economy, banks, as economic and financial institutions, like other organizations, need to budget resources, evaluate performance and measure the achievement of their strategic goals. Therefore, the present study aims to develop a dynamic model of performance-based budgeting with a balanced scorecard approach to the comprehensive and balanced evaluation of the environmental and budgetary effects of a commercial bank. This research is descriptive research with a dynamic simulation approach based on the two main steps of implementing a balanced scorecard and dynamic simulation on a 20-year time horizon from 2011 to 2031. The results provide a dynamic model as a financial model of bank budgeting with the ability to apply any changes in deposit rates and facilities, revenues and expenses, and other external parameters on the bank along with simulating its consequences in the time horizon and Predicting possible performance. Based on this, the bank can formulate its performance-based budget according to strategic objectives and adjust it's budget and performance management by applying possible changes and controlling its consequences.